"Growth in emerging Asia, and especially India, continues to be resilient. India's gross domestic product is projected to expand 7.6 per cent this year and next, the fastest pace among the world's major economies," IMF said in its latest "Global Economic Outlook" report released on Tuesday.
The Fund had predicted 7.4 per cent growth in its July report.
"India's economy continued to recover strongly, benefiting from a large improvement in the terms of trade, effective policy actions, and stronger external buffers, which have helped boost sentiment," it said.
Stating that important policy actions towards the implementation of the goods and services tax (GST) have been taken, it pointed out that this will augur well for investment and growth.
"More broadly, while several positive measures have been undertaken over the past two years, additional measures to enhance efficiency in the mining sector and increase electricity generation are required to boost productive capacity," it added.
However, IMF predicted India to reach 8.1 per cent only by 2021-22.
The IMF asked India to continue the reform of its tax system and eliminate subsidies to provide more resources for investments in infrastructure, education and healthcare.
The report also cautioned India to continue efforts by the Reserve Bank of India (RBI) to strengthen bank balance-sheets through full recognition of losses and increasing bank capital buffers, which remain critical for improving the quality of domestic financial intermediation.
At the same time, it projected a slower global growth at 3.1 per cent in 2016 and 3.4 per cent in 2017 on account of weaker growth of advanced economies like the US and Britain's exit from the European Union.
IMF predicted a 6.6 per cent growth for China in 2016, which it projected to slow down to 6.2 per cent in 2017 for lack of stimulus to the economy.
