The Reserve Bank expects India's economic growth rate to strengthen to 7.4 per cent in the current fiscal, from 6.6 per cent in 2017-18, on account of revival in investment activity.
The growth will accelerate from 7.3-7.4 per cent in first half of 2018-19 to 7.3-7.6 per cent in the second of half of the current fiscal, said the first bi-monthly monetary policy statement for 2018-19.
"On the whole, GDP growth is projected to strengthen from 6.6 per cent in 2017-18 to 7.4 per cent in 2018-19 in the range of 7.3-7.4 per cent in H1 and 7.3-7.6 per cent in H2 with risks evenly balanced," it said.
Several factors, RBI said, are expected to accelerate the pace of economic activities in the year.
"There are now clearer signs of revival in investment activity as reflected in the sustained expansion in capital goods production and still rising imports, albeit at a slower pace than in January," it said.
Secondly, global demand has been improving, which should encourage exports and boost fresh investment, it added.
The Economic Survey tabled in Parliament on January 29, had estimated that India would re-establish itself as the world's fastest growing major economy with GDP expanding by 7-7.5 per cent in 2018-19.
RBI noted that "it is especially important that domestic macroeconomic fundamentals are strengthened, deleveraging of distressed corporates and rebuilding of bank balance sheets persisted with, and the risk-sharing markets deepened".