Purchasing Power

Purchasing Power is the quantity of goods and services that you can buy with a single Rupee at different time periods. Inflation and Purchasing Power are linked to each other. Inflation is an increase in the general level of prices, and, over time, it decreases the value of money. As a result, a given amount of money will purchase a smaller basket of goods in the future. That's because over time, inflation erodes a currency's purchasing power. Purchasing power loss/gain is a decrease or increase in how much consumers can buy with a given amount of money. Consumers lose purchasing power when prices increase, and gain purchasing power when prices decrease. 

(Also read- Why understanding Time Value of Money and Purchasing Power important in planning your Retirement?)