India Probably World's 3rd Largest Economy: OECD

"GDP growth is projected to rise gradually over the next two years... Significantly more growth would be forthcoming if structural bottlenecks were swept away by fundamental structural reforms," the report said.

Looking ahead, it said India is likely to improve growth to 6.7 percent next year, after having logged a decade's low of 3.8 percent in 2012.

OECD said the world real GDP is projected to increase by 3.1 percent this year and by 4 percent in 2014. Across OECD countries, GDP is projected to rise by 1.2 percent this year improve to 2.3 percent in 2014. Growth in non-OECD countries will rise by 5.5 percent this year and 6.2 percent in 2014.

In the U.S., activity is projected to rise by 1.9 percent this year and by a further 2.8 percent in 2014, OECD said.

GDP in the euro area is expected to decline by 0.6 percent this year and then rebound by 1.1 percent in 2014. Japan's GDP is expected to grow by 1.6 percent in 2013 and 1.4 percent in 2014, it added.

Talking about India's neighbour China, OECD forecast that its economy would grow 7.8 percent this year, down from a previous estimate of 8.5 per cent.

Referring to India, it also said the fiscal tightening and the new fiscal consolidation roadmap are "welcome and should allow monetary policy to be eased further".

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