GDP is always stated in current prices. When the Prime Minister declared a goal of $ 5 trillion GDP in 2024, it means $ 5 trillion in 2024 prices - not in 2019 prices. So a part of this growth/increase will be price increase. That is - the growth rate needed to go from $ 3 trillion to $ 5 trillion in 5 years will include inflation (the rate of price increase). In this case, the (nominal) growth rate needed is 11% (because 3 × 1.11^5 = 5). The GDP growth rate announced every quarter and every year is the real growth rate - which is the nominal growth rate minus inflation. Our inflation is currently 3%. If we continue with this inflation, we have to grow at a real rate of 11 - 3 = 8%. If we allow inflation to increase to 5%, we have to grow at a real rate of 11 - 5 = 6%. So the target of $ 5 trillion is easily achievable.
CORRECTION:
My friend Amitesh Singh has pointed out a fundamental error in the above analysis. If India's inflation is x% and America's inflation is y%, then the Rupee will go down against the Dollar by (x - y)%. And the GDP target (5 trillion) is in Dollars. This means two things:
1. We won't get any benefit from a higher inflation in reaching the GDP target.
2. The only 'discount' we get in the required growth rate of 11% is America's inflation rate (currently 2%). So we have to grow at 11 - 2 = 9%.
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