India’s economic growth may surpass 8 percent in the coming financial year, Finance Ministry projections showed, allowing scope for a reduction in stimulus measures that would help the nation restrain its debt burden according to a recent report by Business Week.

“The Indian economy has posted a remarkable recovery from the global recession,” according to the annual Economic Survey prepared by officials advising Finance Minister Pranab Mukherjee, released in New Delhi today. “The recovery creates scope for a gradual rollback, in due course, of some of the measures undertaken over the last 15 to 18 months.”

The challenge for Mukherjee is to unwind 7.5 trillion rupees ($162 billion) of fiscal stimulus and curb consumer-price inflation that’s the highest in the Asia-Pacific region, according to data compiled by Bloomberg. The payoff may be cheaper debt-financing costs and averting investor concerns at the sustainability of faster economic growth such as in China.

“India wants to avoid a China-like overheating problem,” said Shashanka Bhide, chief economist at the National Council, a corporate-funded analysis group. “Mukherjee has a tough balancing act — to support growth and cut the budget deficit to control inflation.”

Prime Minister Manmohan Singh’s administration, which won reelection last year, will also aim to avoid hampering an economic rebound that’s yet to produce earnings gains for DLF Ltd., the lagest Indian real estate developer, and has left out an agriculture industry hammered by a poor monsoon.

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Tags: Indian Economy, Indian Real Estate, India’s economic growth

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