The Organisation for Economic Co-operation and Development (OECD) said in its Economic Outlook on Tuesday that India's economic growth will regain strength and approach 7.5 per cent by 2020 buoyed by rural consumption and subdued inflation.

The report stated that, "The new income scheme for farmers will support rural consumption. Investment growth will accelerate as capacity utilisation rises, interest rates decline, and geopolitical tensions and political uncertainty are assumed to wane. Lower oil prices and the recent appreciation of the rupee will reduce pressures on inflation and the current account."

The projected growth will come from higher domestic demand due to improved financial conditions, fiscal and quasi-fiscal stimulus, including new income support measures for rural farmers, and recent structural reforms, the report said.