According to official data, India's growth rate slipped to 6.1 per cent in the January-March quarter and 7.1 per cent, during 2016-17.
Global financial services major UBS said the gradual pace of recovery will help improve productivity dynamics and lay the foundation for sustainable growth.
The report lauded the ongoing reform push of the government, like GST, inflation targeting, a new bankruptcy code, financial inclusion, liberalisation of FDI, measures to curb black money and encouraging digitalisation, among others.
"We expect India's GDP growth to recover to 7.2 per cent and 7.7 per cent in 2017-18 and 2018-19, respectively," she added.
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According to UBS, India's growth outlook depends on the ability of the policymakers to undertake structural reform in labour, land, capital and business.
The most critical reform include resolution of stressed assets in banking system, GST and easing of supply- side bottlenecks. Also, policy efforts towards stepping up infrastructure investment, labour market reform and measures to boost manufacturing growth will all help improve India's medium-term growth outlook, it added.
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