The World Bank on Monday said that despite a series of hurdles, the Indian economy grew at a fast pace in the last financial year and predicted that it will gain more strength in the coming fiscal. Although there have been two consecutive drought years that affected rural household consumption, the demand from urban households and public investments kept the economy going, it said in its India Development Update.

“India’s financial sector has performed well on many dimensions and can be a reliable pillar of future economic growth. However, accelerating structural reforms and addressing the non-performing asset challenge remain urgent tasks,” argued Frederico Gil Sander, the main author of the report.

The update, which is released twice every year, predicted India will grow at 7.6% in 2016-2017, followed by a modest rise to 7.7% in 2017-2018 and 7.8% in 2018-2019. However, it also said that to achieve and sustain this growth rate, India needs to revive dormant areas such as agriculture, rural demand and trade while also ensuring that the demand from urban households and public investments do not die down.

The report added that once global trade stabilises, Indian exports will also get a boost. It also highlighted the crucial role of a favourable monsoon. It also stressed on the benefits a uniform Goods and Service Tax could bring.

“There are good reasons for confidence in India’s near-term prospects. However, a pickup in investments is crucial to sustain economic growth in the longer term. The recently approved Bankruptcy Code is helpful in this regard, and once it is implemented it will help unleash the productivity that Indian firms need in order to create jobs and become globally competitive,” said Onno Ruhl, World Bank Country Director, India.