Other measures likely to stimulate investments include the restructuring of state electricity boards, revision of power tariffs, approvals for ports and airports and the development of industrial corridors, RBS said.

The foreign brokerage expects underperforming sectors to play catch-up in the coming year -- boosted by rock-bottom earnings expectations, attractive valuations and growth revival in domestic as well as export markets.

RBS pointed out that valuations for the utility and industrial sectors are at respective 26 per cent and 24 per cent discounts to their historical averages. Attractive valuations, combined with signs of a pick-up in earnings, reinforce our view that investment-led sectors are bottoming.

On outlook of the rupee, RBS said the Indian unit will remain more buoyant in 2014 amid hopes that the global liquidity taps will stay open.

The Indian rupee fell more than 12 per cent against dollar in 2013, after losing more than 30 per cent by August. But the rupee has gained some stability recently following measures announced by RBI to attract global capital.

"As we enter 2014, improving trade and stable global liquidity conditions are supporting the rupee. Upcoming polls add political uncertainty, but we see potential upside for the rupee later in the year, given hopes for fiscal

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