Also, going forward the consumption growth is expected to pick up further.
According to global brokerage firm, in India, recovery in growth is becoming more broad-based with the pick up in public sector capex and rise in foreign direct investment inflows spreading to discretionary consumption (both urban and rural).
According to the report, growth in the emerging market economies including India are stabilising at low levels.
"Macro stability is returning in EM (emerging market) economies ex-China as inflation is moderating, current account balances are improving and the growth trajectory has stabilised somewhat," Morgan Stanley said in a research note.
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On Reserve Bank's monetary policy stance, Morgan Stanley said emerging market policy makers are expected to go for further easing.
"We continue to expect further easing from EM monetary policymakers, in particular, we expect the People's Bank of China (PBOC) to cut rates by 25 bps in both third quarter of 2016 and first quarter of 2017, RBI to cut by 50 bps more, and Russia to cut rates by 100 bps by end-2016," the report said.
However, the industry still expects further rate cuts from RBI to boost investment.