In its annual assessment report for the country, the International Monetary Fund (IMF) also said India has emerged as one of the fastest-growing big emerging market economies and the growth rate would further accelerate to 7.5 percent in the next fiscal, 2015-16.
The new forecasts have taken into account a revised methodology adopted by India earlier this year for calculating the GDP figures, about which IMF said that the country has "improved the way it measures economic output".
The new methodology, however, has been termed as 'puzzling' initially by some including Chief Economic Advisor Arvind Subramanian and RBI Governor Raghuram Rajan. Incidentally, both Subramanian and Rajan have been with IMF in the past.
Last year, IMF had forecasted a growth rate of 5.6 percent for the current fiscal, and 6.4 percent for the next.
The Indian economy is reviving, helped by positive policy actions that have improved confidence and lower global oil prices, the IMF said, while anticipating stronger growth in the next fiscal on the back of stronger investment flows following improvements to the business climate.
To continue on this trend, India needs to revitalise the investment cycle and accelerate structural reforms, it said in its annual assessment report for the country.
"Indian economy is the bright spot in global landscape, becoming one of the fastest-growing big emerging market economies in the world," IMF said in a report after its recently concluded annual consultations with India.
"Growth numbers are now much higher and the current account deficit is comfortable, in part due to the fall in gold imports and lower oil prices," IMF Mission Chief for India Paul Cashin said.
"New investment project announcements have started to pick up, particularly in the power and transport sectors," he said, while adding that bolstering financial sector health and further financial inclusion would support growth going ahead.
IMF said that the country is well placed to cope with external shocks, although there are possible risks on the horizon, both external and domestic.

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