The International Monetary Fund (IMF) also sees inflation, driven by food prices, remaining near double digits in 2014-15. Though it said tight monetary policy is likely to slow growth recovery.
"Growth is projected at 4.6 per cent for fiscal year 2013-14, and should pick up to 5.4 per cent in 2014-15 (at factor cost)," the multilateral agency said in its report after concluding annual discussions with India.
As per India's official estimates, the economy is likely to expand at 4.9 per cent in 2013-14 as against 4.5 per cent in the previous fiscal. The government expects to growth to pick up in the 2014-15 fiscal.
Meanwhile, in a note prepared for the G20 leaders' meet that will start on February 22 in Sydney, the IMF asked high inflation countries, like India to strengthen their fiscal and monetary policy frame work to tackle price rise.
"On the monetary front, economies where inflation is still relatively high, or where policy credibility has come into question, need to continue tightening monetary policy in the context of strengthened policy frameworks (India and Turkey)," IMF said in a note prepared for the G20 leaders' meet starting on February 22 in Sydney.
Inflation has been a major concern for India for the past few years. However, in the past few months, it has starting showing sings of moderation.
India's central bank RBI has adopted a hawkish monetary stance to tame inflation.
The Washington-headquartered agency also stressed that countries like India needs to better its supply infrastructure by doing away bottlenecks to achieve faster growth, job creation and poverty reduction.
IMF in its staff report at the conclusion of its annual consultations with India said: "Addressing supply bottlenecks and structural challenges—particularly in the agriculture and power sectors, and in the pricing and allocation of natural resources (including coal, natural gas, and fertilisers)—will be essential to achieve faster growth, job creation and poverty reduction."
Supply bottlenecks, like poor roads, is a major cause for high inflation and considered impediments for faster growth.
The IMF also said that against the background of parliamentary elections (due by May) and prospective global liquidity tightening, policy discussions centred on mitigating risks associated with the challenging domestic and external economic environment.
In another development, a group of businessmen from G20 nations has decided to explore funding opportunities in infrastructure in different countries, including India, that require a whopping USD 57 trillion through 2030.
In a statement, infrastructure and investment task force of B20 - a grouping of business leaders of G20 nations - said its focus in 2014 will be on making recommendations to the G20 to help direct flow of capital and capability to infrastructure projects across the globe.
G20 nations comprise rich and developing countries, including India.
"It is estimated that at least USD 57 trillion will be needed to finance infrastructure projects worldwide through 2030," the B20 said.
The B20 engages with G20 governments on behalf of the international business community. In 2014, the B20 would focus on developing actionable recommendations that would drive global economic growth and create jobs.
The annual global infrastructure investment deficit has been estimated at US 1 trillion which could result in lost economic growth of USD 3 trillion each year.