The economy contracted by a historic 23.9% in the first quarter of 2020-21 on account of the impact of the coronavirus pandemic. The contraction, however, narrowed to 7.5% in the second quarter.
Stronger car sales, rising production of finished steel and diesel consumption, and higher goods and services tax revenue collections indicate that the economy has bounced back strongly since 'the unlock', backed by pent-up and festive season demand, the report said.
Sustaining this rebound could be a challenge next year, if coronavirus infection cases continue to be high, it added.
However, it said, "We expect India's GDP (gross domestic product) to rebound to double digits in FY2022 after contracting in FY2021."
According to the report, three drivers -- inclusive job growth, a robust services sector rebound and a sustained recovery in private demand -- will ensure a sustained economic revival and rehabilitation.
The government's effective policy measures together with prudent business strategies should help the economy grow strongly from the next financial year, it added.