IMF projects India's growth rate for this fiscal at 7.3 per cent

The growth rate might pick up to 7.5 percent in FY2016/17.

"Growth is projected at 7.3 percent for fiscal year FY2015/16, picking up to 7.5 percent in FY2016/17 (at market prices), supported by stronger domestic demand. With the revival of sentiment and picking up of industrial activity, an incipient upturn in private investment is expected to help broaden the recovery," the IMF said in a statement.

"Higher public infrastructure investment and government initiatives to tackle supply-side bottlenecks and repair corporate and public bank balance sheets should also help crowd-in private investment. The Reserve Bank has achieved its inflation target to bring inflation below 6 percent by January 2016. Going forward, near-term headline consumer price inflation dynamics will continue to be underpinned by supply-side factors which, despite the subpar crop outlook, should help achieve the Reserve Bank of India’s inflation goal of around 5 percent for March 2017," the IMF said.

"Notwithstanding the 125 basis points nominal policy rate cut in 2015, monetary conditions remain consistent with achieving the inflation target of 5 percent by March 2017. Despite the recent export slowdown, continued low global oil prices should help contain the current account deficit at around 1.5 percent of GDP in FY2016/17. The FY2015/16 Union budget deficit target of 3.9 percent of GDP (equivalent to about 4.25 percent of GDP in IMF terms) will likely be achieved," it said.

The IMF said the Indian economy is on a recovery path, helped by a large terms of trade gain , positive policy actions, and reduced external vulnerabilities.