With the anticipated momentum created by the new government, the Indian economy could record a higher rate of growth, according to the World Bank and the Organisation for Economic Cooperation and Development (OECD).
With the government initiating economic reforms and bringing transparency in governance, the World Bank feels that the world's third-largest economy could achieve a growth rate of 5.3 per cent this year compared with 4.7 per cent last year.
Firm global growth and a modest pick-up in industrial activity should help lift South Asia's growth to 5.3 per cent in 2014, rising to 5.9 per cent in 2015 and 6.3 per cent in 2016, according to the World Bank.
''I think there is, overall a sense that recognition of the need for domestic solutions to policies is increasingly evident in India, as well,'' World Bank economist Andrew Burns said during a conference call yesterday.
''The situation in India has obviously gone through a difficult period for the last couple of years, with growth below 5 per cent after several years after it was eight and even higher,'' Burns, lead author of the World Bank global economic outlook and the head of the team in the Macro Group, said.
''Much of that has been a reflection of this process of being overheated and over-inflated, and a natural slowing of the economy. But there has also been a concern that the domestic reform process had lost momentum,'' Burns said.
India's economy had grown at an average rate of around 7.3 per cent between the calendar years 2004 and 2012, the report said, adding that the decline in growth rate to an estimated 4.7 per cent in market price terms in calendar year 2013 mainly reflected subdued manufacturing activity and a sharp slowing of investment growth in India.
While growth momentum is weakening in major developing economies, OECD said, India remains an exception while the economic outlook is stable for most developed countries.
The Paris-based OECD said its leading indicator covering 33 member countries was unchanged in April for the sixth month in a row at 100.6, above its long-term average of 100.
The indicator, designed to flag turning points in the economic cycle, suggested there was "stable growth momentum" in the bloc of mostly wealthy developed nations, the OECD said.
However growth was below trend in Brazil, China and Russia while India's reading was steady at 97.9, which the OECD described as a tentative positive turning point in the country's economic cycle.
The outlook was stable in the United States, with a 100.5 reading unchanged for months. The OECD said the euro area saw a positive change in momentum with a reading of 101.1, which was steady from March but up from previous months.
However, Japan saw its reading continue to ease, slipping to 100.6 from 100.7 as consumers adjust to the first increase in value added sales tax since 1997.