Tuesday, January 05, 2016

India Inflation History 1958 - 2014

India's had some terrible inflation lately, I took some time to figure out the cumulative 2-year, 3-year, 5-year and 10-year cumulative price index (CPI) based inflation figures in the cumulative price index (CPI) over the past 56 years. These numbers are based on a dataset from inflation.eu.
Here are the numbers:


annual inflation (dec vs. dec) inflation 2-year trailing inflation 3-year trailing inflation 5-year trailing inflation 10-year trailing inflation
CPI India 2014 5.86% 15.53% 28.43% 49.72% 124.06%
CPI India 2013 9.13% 21.32% 29.19% 62.60% 119.66%
CPI India 2012 11.17% 18.38% 29.60% 63.45% 108.77%
CPI India 2011 6.49% 16.57% 34.03% 55.13% 93.80%
CPI India 2010 9.47% 25.86% 38.07% 55.19% 91.38%
CPI India 2009 14.97% 26.12% 33.07% 49.66% 80.91%
CPI India 2008 9.70% 15.74% 23.30% 35.09% 58.09%
CPI India 2007 5.51% 12.40% 18.66% 27.73% 66.19%
CPI India 2006 6.53% 12.46% 16.71% 24.93% 67.42%
CPI India 2005 5.57% 9.56% 13.64% 23.32% 73.52%
CPI India 2004 3.78% 7.64% 11.09% 20.88% 80.29%
CPI India 2003 3.72% 7.04% 12.56% 17.03% 90.17%
CPI India 2002 3.20% 8.53% 12.30% 30.12% 99.20%
CPI India 2001 5.16% 8.82% 9.33% 34.01% 108.46%
CPI India 2000 3.48% 3.97% 19.89% 40.70% 124.14%
CPI India 1999 0.47% 15.86% 23.15% 49.15% 146.30%
CPI India 1998 15.32% 22.57% 35.33% 62.51% 158.43%
CPI India 1997 6.29% 17.35% 28.73% 53.09% 143.80%
CPI India 1996 10.41% 21.11% 32.58% 55.56% 150.73%
CPI India 1995 9.69% 20.08% 30.45% 59.30% 148.00%
CPI India 1994 9.47% 18.93% 28.44% 65.14% 142.24%
CPI India 1993 8.64% 17.33% 32.67% 59.03% 132.77%
CPI India 1992 8.00% 22.12% 38.86% 59.25% 140.95%
CPI India 1991 13.07% 28.57% 35.54% 61.18% 141.06%
CPI India 1990 13.71% 19.87% 30.41% 55.68% 140.34%
CPI India 1989 5.42% 14.69% 25.36% 46.69% 130.57%
CPI India 1988 8.79% 18.92% 29.87% 46.37% 144.31%
CPI India 1987 9.31% 19.38% 27.90% 51.30% 127.96%
CPI India 1986 9.21% 17.01% 23.08% 49.56% 124.94%
CPI India 1985 7.14% 12.70% 26.74% 54.38% 105.97%
CPI India 1984 5.19% 18.30% 27.82% 57.19% 80.36%
CPI India 1983 12.46% 21.51% 36.98% 66.92% 115.01%
CPI India 1982 8.05% 21.80% 32.88% 50.66% 136.71%
CPI India 1981 12.73% 22.98% 37.37% 50.40% 135.86%
CPI India 1980 9.09% 21.85% 23.69% 33.42% 119.45%
CPI India 1979 11.70% 13.39% 22.30% 14.74% 111.25%
CPI India 1978 1.51% 9.49% 9.49% 28.81% 95.81%
CPI India 1977 7.86% 7.86% 1.19% 57.11% 88.60%
CPI India 1976 0.00% -6.18% 17.65% 56.82% 89.89%
CPI India 1975 -6.18% 17.65% 45.66% 64.49% 116.37%
CPI India 1974 25.40% 55.26% 67.15% 84.11% 143.28%
CPI India 1973 23.81% 33.29% 39.81% 52.01% 127.00%
CPI India 1972 7.66% 12.92% 18.58% 20.04% 95.94%
CPI India 1971 4.89% 10.14% 14.04% 21.09% 86.51%
CPI India 1970 5.01% 8.73% 6.30% 31.54% 83.53%
CPI India 1969 3.54% 1.23% 9.94% 32.14% 74.77%
CPI India 1968 -2.23% 6.18% 20.98% 49.33% 75.94%
CPI India 1967 8.60% 23.74% 30.53% 63.23% 89.22%
CPI India 1966 13.94% 20.20% 40.64% 54.03%
CPI India 1965 5.49% 23.43% 31.91% 39.52%
CPI India 1964 17.01% 25.05% 28.15% 32.26%
CPI India 1963 6.87% 9.52% 13.04% 17.82%
CPI India 1962 2.48% 5.77% 5.77% 15.92%
CPI India 1961 3.21% 3.21% 7.58%

CPI India 1960 0.00% 4.23% 9.60%

CPI India 1959 4.23% 9.60%


CPI India 1958 5.15%









MAX Inflation 25.40% 55.26% 67.15% 84.11% 158.43%
AVERAGE Inflation 7.65% 16.03% 25.06% 45.50% 111.04%
MEDIAN Inflation 7.14% 16.79% 27.82% 49.72% 113.13%

The numbers denote percentage growth in prices. For example, a 111% 10-year trailing inflation means that goods that cost Rs. 1000 at the beginning of the interval will cost Rs. 2110 at the end of the interval. The numbers have been adjusted for compounding. From the analysis above, it seems that prices become 2.1x every decade on average and from eyeballing the data, it seems that we're on the verge of another big inflation run... Inflation kills the purchasing power of the poor and contributes to income inequality because those with money (eg. businesses) see their revenues grow faster than their expenses (even with the same % increase due to the base effect) whereas the salaried workforce sees a decrease in purchasing power due to salary increases lagging the increase in prices by having a longer compounding period (eg. 12% raises every year don't compensate for 1% monthly inflation; and many cases rise in salaries are not in line with inflation).

Anyway, peruse the data and form your own conclusions. Happy to hear your thoughts in the comments.