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India’s gross domestic product (GDP) in 2018-19 is estimated at $2.75 trillion (the International Monetary Fund’s figure is $2.71 trillion) at market exchange rates. Prime Minister Narendra Modi has set an ambitious target of a $5 trillion economy by 2024-25. This is meant to be a challenging aspirational target rather than a projection.
But is it a feasible and virtuous target?
According to the Economic Survey 2018-19, assuming an inflation rate of 4 per cent, a rupee depreciation rate of 1.4 per cent ($1 = Rs 75 by 2024-25) India needs to grow at a real annual rate of 8 per cent (12 per cent nominal) to get there.