MUMBAI (Bloomberg) — India's economic growth may accelerate this year for the first time since 2007, giving Finance Minister Pranab Mukherjee room to withdraw fiscal stimulus.

Asia's third-largest economy will probably expand 7.2 percent in the year ending March 31 from a year earlier after growing 6.7 percent in the previous 12 months, the Central Statistical Organisation said in a statement in New Delhi yesterday.

Mukherjee is under pressure from the central bank to raise taxes in the budget on February 26 to check inflation in the world's fastest-growing major economy after China. Companies including Hero Honda Motors Ltd., India's biggest motorcycle maker, and Videocon Industries Ltd., a refrigerator maker, resist removal of tax support, saying demand hasn't strengthened sufficiently.

"Stimulus measures should continue," said Ravi Sud, chief financial officer at Hero Honda. "My sense is that the finance minister may partially withdraw stimulus as inflation and fiscal deficit become prime concerns."

Manufacturing output may rise 8.9 percent in the year through March after a 3.2 percent gain in the previous year, according to yesterday's report. Banking and insurance services may grow 9.9 percent, mining may gain 8.7 percent while electricity production will probably rise 8.2 percent, the report showed. Farm output may decline 0.2 percent.