How is inflation calculated?

Percent inflation rate = (Final CPI Index Value/Initial CPI Value)*100 is the formula used for calculating inflation. You can read about Inflation in Economy- Types of Inflation, Inflation Remedies, Effect of Inflation in the given link.

Further readings:

1. Indian Economy Notes for UPSC Civil Service Exam
2. Monetary Policy – Objectives, Monetary Policy Committee, Instruments of Monetary Policy