S&P Global Ratings on Tuesday kept India's economic growth forecast in the fiscal year to March 2022 unchanged at 9.5 per cent but raised its predictions for the subsequent year on broadening out of the recovery.

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The Indian economy had shrunk by 7.3 per cent in 2020-21 fiscal (April 2020 to March 2021) as pandemic induced restrictions battered business activity.

The gradual lifting of the restrictions has helped the economy to rebound from pandemic lows.

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"India is learning to live with the virus. Following the peak in COVID-19 cases around mid-year, the stringency index has declined, mobility has recovered, and consumer and business confidence has improved," S&P Global Ratings said in a report.

Rising inflation is a pressure point, unlike elsewhere in emerging Asia. But external demand continues to support growth.

Recent high-frequency indicators such as the October services purchasing managers' index reading of 58.4 suggest a strong recovery is underway.

"We leave our growth forecast unchanged at 9.5 per cent for the fiscal year ending March 2022 and 7.8 per cent for the year ending March 2023.

"The ongoing broadening out of the recovery suggests that permanent costs are likely to be lower, and as a result, we revise higher our growth forecast for the fiscal year ending March 2024 to 6.0 per cent from 5.7 per cent earlier," it added.