The Indian economy will accelerate despite partial rollback of stimulus measures on the back

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of a bounce in demand, Crisil Principal Economist Dharmakirti Joshi said.

"India's GDP growth will likely accelerate to 7.5 per cent to 8 per cent this year (calendar year 2010) despite the expected withdrawal of the government's stimulus measures and tightening monetary policy,"Joshi said in an article published by Crisil, the Indian subsidiary of Standard & Poor's.

Titled 'India Growth To Climb In 2010 Even As Government Withdraws Stimulus To Curtail Inflation', it said that going forward the economy could grow by 8-8.5 per cent in 2011 from 6.1 per cent in mid-2009 as the global outlook continues to improve.

However, it pointed out that policymakers face challenge of reining in inflation and curbing elevated government borrowings while sustaining recovery.

"We expect an increase in private consumption and an improvement in exports to boost India's growth in 2010. But amid our optimism about India's growth potential, inflation is an acute concern-- despite the Reserve Bank of India's monetary-tightening measures," said Joshi.

The time and manner of withdrawal of stimulus measures will be critical to sustained economic recovery, he said. He expects a gradual withdrawal of stimulus programs and an increase in key interest rates.