Asia's third-largest economy, which grew at a rapid pace of 8.8 percent a year from 2004 to 2008, is expected to grow 6.7 percent this financial year, said Junaid Ahmad, country director of the World Bank while releasing a report.
The Central Statistics Office predicted GDP growth to be 6.6% in the current financial year.
"It would be hard to find another country with such a growth promise", Poonam Gupta, Lead Economist with the World Bank and main author of the report said while presenting the report said. It's a steady growth, volatility has decreased, the growth is driven by one factor unlike China by exports. "Despite shocks such as the implementation of the Goods and Services Tax, and demonetisation, the growth path is back on trend".
The report said that "maintaining hard-won macroeconomic stability, providing a definite and durable solution to the cleaning up of banks' balancesheets, realising GST's growth and fiscal dividend, and regaining momentum on the unfinished structural reform agenda" would be key to India achieving growth rates over 8% after 2019-'20.
"While services will continue to remain the main driver of economic growth; industrial activity is poised to grow, with manufacturing expected to accelerate following the implementation of the GST, and agriculture will likely grow at its long-term average growth rate".
According to the World Bank, India's growth in recent years has been supported by "prudent macroeconomic policy" including a new inflation targeting framework, energy subsidy reforms, fiscal consolidation, higher quality of public expenditure and a stable balance of payment situation.
On growth issue Mr Ahmad said, "India's long-term growth has become more steady, stable, diversified and resilient".
"In the long-run, for higher growth to be sustainable and inclusive, India needs to use land and water, which are increasingly becoming scarce resources, more productively, make growth more inclusive, and strengthen its public sector to meet the challenges of a fast growing, globalizing and increasingly middle-class economy", he added. Today we are putting in approximately Dollars 3.5 billion per year in various projects (in India).
On the flip side, it said oil prices pose less of a risk for the Indian economy, the expected normalisation of monetary policy by the U.S. and the other advanced economies are likely to tighten financing conditions.