.gif)
India's economy could grow by close to eight percent this year, the finance minister said Wednesday, but fiscal stimulus which spurred the expansion will only be wound down slowly.
India's growth for the year to March 2010 is expected to be around 7.75 percent, Finance Minister Pranab Mukherjee said in a speech in New Delhi.
"The growth outlook for the next two quarters and for the whole year is expected to be in the upper bound range of most predictions for the Indian economy," Mukherjee said.
Annual growth of 7.9 percent posted in the fiscal second quarter from July to September had fuelled hopes of a strong economic performance for the current year, he said.
Mukherjee's projection was higher than the 7.2 percent forecast announced earlier in the week in documents prepared for the budget that he is set to unveil in late February, but such estimates are frequently revised upward.
Asia's third-largest economy posted 6.7 percent growth in the previous financial year when India was hit by a downturn in export markets.
Government officials say India could log at least 8.0 percent growth in the year starting April 1 as it heads back to the boom levels of 9.0 percent it enjoyed before the global slump.
Despite the strong growth, policymakers said authorities would only gradually roll back stimulus measures which have helped India retain its slot as the second-fastest growing major economy after China.
"What one is talking about is a gradual transition towards a more normal situation," the Prime Minister's Economic Advisory Council Chairman Chakravarthy Rangarajan told reporters.
To help India weather the financial crisis, the central bank cut benchmark borrowing costs to record lows while the government pitched in with tax and duty cuts, higher spending and other measures.
Industry leaders have warned against any fast withdrawal of stimulus steps, saying recovery is still at a nascent stage.
"Rollback is too strong an expression... the stimulus exit has to be a gradual process," Rangarajan said.
