India has projected its economy to rise 7 to 7.5 percent this year and reclaim its position as the world's fastest-growing major economy and underestimate the impact of currency bans and tax reforms.
However, the government has warned that rising international oil prices had a negative impact on a country that relied heavily on energy imports.
"The economy is growing quite rapidly," said the country's chief economic adviser, Arvind Subramanian while delivering the country's annual economic survey.
Activity indicators show growth in manufacturing, investment, export and credit, all starting to rise. The direction is very good. "
Projections for Asia's third largest economy are in line with recent estimates by the World Bank and International Monetary Fund. The rise of growth is good news for India.
Last year its growth slowed to a low level for three years in a row. Whereas India once boasted to defeat China as the fastest growing economy in the world by 2015.
The slowing of the Indian economy is different from many countries where growth is increasing. Suspected cause is two major policy reforms that appear only six months later
Businesses were disrupted for several months last year while the government attempted to replace cash following a currency ban that sucked 86 percent of cash. Long-delayed tax reforms, Goods and Services Tax (GST) runs in July, but its application is poorly maturing, causing chaos for the business sector
"The temporary impact of demonization and GST has gone. Improvement measures have been taken, "Subramanian said of his optimism about the new growth projections.
The government says both efforts have helped boost the number of people paying taxes. Restoring important growth momentum for India that calls the country an attractive destination for international investors.
Indian Prime Minister Narendra Modi last week seduced investors at the World Economic Forum in Davos. He says that protectionism is getting stronger and globalization is losing its appeal, but India is open to business.
The rise of the economy is also good news for the modi-led Hindu nationalist government preparing for next year's elections.
economists say the government is expected to focus on rural development programs and SMEs in future budgets that will be described on Thursday as the government looks for ways to create jobs for a large young population.
"The world is very optimistic about India. The 2018 budget will add freshness to India's development and fulfill people's aspirations, "Prime Minister said via Twitter when the parliament opened on Tuesday.
The survey also confirms the challenges facing the large Indian villagers. The survey said unlicensed farms were badly affected by climate change, extreme temperatures and less rain. Alleviating the suffering of farmers is a big challenge for the government. [vm/ii]