Continued reforms required

The report, however, observed that a growth of over 8 percent will require "continued reform and a widening of their scope" aimed at resolving issues related to credit and investment and enhancing the competitiveness of exports.

Demonetization and GST

"The Indian economy is likely to recover from the impact of demonetization and the GST, and growth should revert slowly to a level consistent with its proximate factors; that is, to about 7.5 percent a year," the report said.

In November 2016, the government had scrapped high-value currency notes of Rs 500 and Rs 1,000 in a bid to check black money, among others. Later, India implemented its biggest indirect tax reform Goods and Services Tax (GST).

Both of these initiatives had impacted the economic activities in the country in short run.

India's economic growth had slipped to a three year low of 5.7 percent in April-June quarter of the current fiscal, though it recovered in the subsequent quarters.

Projections

The economy is expected to grow at 6.6 percent in the current fiscal ending March 31, as per the second advanced estimates of the Central Statistics Office (CSO), compared to 7.1 percent in 2016-17. The earlier estimate was 6.5 percent.

The Economic Survey tabled in Parliament has projected a growth rate of 7 to 7.5 percent in the 2018-19 financial year.

The World Bank report further said that accelerating the growth rate will also require continued integration into global economy. It pitches for making growth more inclusive and enhancing the effectiveness of the Indian public sector.