A few days ago, when talking to an the assembled chief ministers of India’s states, Prime Minister Narendra Modi declared that he wanted India to be a “$5 trillion economy” by 2024, when he once again faces reelection. This would, he said, be “challenging, but achievable.”Modi could never be accused of lacking ambition, but the fact is that getting India’s GDP to $5 trillion in five years will be far more challenging than achievable. India is, currently, a $2.8 trillion economy; to reach the $5 trillion mark by 2024, the economy would require nominal growth in dollar terms of over 12% a year. To put this in context, in the last quarter for which data is available, India grew at slower than 6% in real terms — and, if you believe the Modi government’s own former top economist, that data is flawed and India may well be growing a few percentage points less than that.
If India does very little — a “business-as-usual” scenario — it will, indeed, continue to grow. Growth, if the skeptics are right, will be moderate by Indian standards. If it grows closer to 6% a year in dollar terms, then the Indian economy will only hit $5 trillion in output a decade from now, far longer than Modi wants.