Inclusive growth and tax reforms remain key challenges to India's growth, Organisation for Economic Co-operation and Development (OECD) said on Tuesday, emphasising that revenue from income taxes needs to be increased.

"Firstly, India needs to finance access to quality public services for all, to reduce poverty and promote inclusive growth. Increasing tax revenues will help expand access to services. India raises only about 15 per cent of GDP in tax revenue, roughly a third of the levels in advanced European countries," OECD Secretary General Angel Gurria said here.

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She was speaking after jointly launching the OECD Economic Survey of India with Economic Affairs Secretary Shaktikanta Das.

"More revenue could be raised from property and personal income taxes, which are paid by too few people. Less than 6 per cent of the population pay personal income tax," Gurria said.

"These taxes could also be fairer, with fewer exemptions and more progressive rates. Statutory rates are relatively low and kick in at high income levels. Employing more skilled tax officers will be vital to strengthen tax administration and make the system fairer and more effective.

"But it's not just about raising revenues, it's about spending," she added.

"Spending needs on physical and social infrastructure are not being fully met, which is holding back private investment, contributing to sluggish job creation in the organised sector and undermining well-being," Gurria said. 

Das, who was also present at the event, said that the government is working to address the challenges. 

"Within the government there is lot of pressure for higher and better quality of delivery. There is no complacency in the government. The report talks about challenges of rural infrastructure, balance sheet of banks. Most of these challenges are noted and are very much on the table," he added.

OECD estimated India's GDP growth at 7 per cent for 2016-17 calling India a star performer in times of a slowdown in world economy.

"We all recognise that India has been a star performer in gloomy times for the world economy. We launch about 25 OECD Economic Surveys every year, and it is not often that I get to announce growth figures of 7 per cent. This is more than double the current global growth figure," Gurria said.

"The acceleration of structural reforms, the move towards a rule-based policy framework and low commodity prices have provided a strong growth impetus. At the same time, inflation, the current account deficit, and the central government deficit have all been brought down in the past few years," she added.

The Paris-based OECD, which has 35 member nations, promotes policies to improve the economic and social well-being. India is not a member nation but one of its five key partners with Brazil, China, Indonesia and South Africa.