"The collapse in global oil prices is a large windfall gain for India," Paul Cashin, head of the International Monetary Fund (IMF) team for India, said yesterday.

Crude prices have plunged around 70 percent over the past 18 months to around USD 35 a barrel.

In its latest report, the IMF projected India's GDP growth from 7.3 percent this fiscal year to 7.5 percent next year even as the economic recovery has been uneven.

The pick-up in the investment cycle is yet to gain strength, the banking system is weighed down by bad loans, and the weaker global economy has hit India's exports, it said.

IMF said as private investment continues to show only a few signs of revival, the challenge for India is to sustain its growth momentum.

An increase in public infrastructure investment and government initiatives to unclog stalled investment projects are helping bolster investor sentiment and having a positive impact on private investment, it said.

According to IMF, with global growth weaker, India will have to continue to rely mainly on domestic demand as a key source of growth.

Latest News  from Business News Desk