Multilateral agency ADB said India will have to resolve complex policy and regulatory issues like land acquisition and environmental clearances in order to return to higher growth trajectory.
"Return to a high growth trajectory is possible, but this will require persisting with reforms and resolving some complex policy and regulatory issues, including those relating to land acquisition for industrial activity, environmental clearances, and allocation of licenses for natural resources," the Manila-based agency said in a report.
Resolution of these issues, the Asian Development Bank (ADB) said, would invigorate the private sector that has been vital to economic growth, employment generation, and capital formation.
India, which grew by over 9 per cent for three years before the 2008 global financial crisis, is facing slowdown. The growth rate fell to a decade low of 5 per cent in 2012-13.
Recently, various external agencies had lowered their India growth projections for this financial year. The World Bank had slashed its India growth projection to 4.7 per cent, while IMF lowered its India growth estimate to 3.75 per cent for 2013-14.
ADB further said that to sustain high and inclusive growth, India needs to expand and consolidate structural reforms, remove its infrastructure deficit, and improve the quality and coverage of basic social services.
"Environmental sustainability is also a priority because population growth, rapid urbanization, and economic expansion have placed unprecedented pressures on the country's natural resources," it said.
ADB today said it would provide $10 billion over the five years till 2017 to India to create jobs, enhance investment reforms, and improve infrastructure.