India's GDP growth to improve modestly to 5.4% in FY15 from 4.7% in FY14, said Shubhada Rao, chief economist at Yes Bank. While recovery in growth on the sectoral side is expected to be led by industry, she added.

She further said, on the expenditure, growth is expected to be supported by gradual recovery in investments. While continued recovery in exports as global growth/trade improves.

"For a sustainable growth revival, investments need to be in lead," Rao added.

"A faster pace of consumption revival unaccompanied by addition to investments will lead to a revival in inflationary pressures. As such, an increase in government investment through budgetary capex is needed to help crowd-in private investments."

Over next two years, a structural reforms move forward, investment growth expected to pickup robust momentum, she opined.

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