Mr Ahluwalia's comments came as the government said it expected India's economy to accelerate at 7.2% in the year ending in March 31, up 50 basis points from the previous fiscal year.
Indications that Asia's third-largest economy was recovering quickly from the global economic slowdown strengthened expectations that the government may rein in its fiscal stimulus, analysts said.
"We should expect a partial roll back of the stimulus introduced by the government during the crisis at some point soon ... possibly during the budget," said a senior economist who did not want to be named.
India's budget is due later this month.
However, Anjan Roy, an economist at the Federation of Indian Chambers of Commerce and Industry, said it was too early to withdraw the stimulus as the economy was still at an early stage of recovery.
Source: Moneycontrol.com India growth set to near 2007 boom levels
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By ugesh sarkar, Section Indian Economy
Posted on Tue Feb 09, 2010 at 11:32:12 PM EST
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Rising inflation has been the main concern for policymakers in India who fear it could hit the poorer segments of the country's 1.2billion population. HSBC recently raised its forecast for India's wholesale price inflation for this fiscal year from 8% to 10%.
C. Rangarajan, chairman of the prime minister's economic advisory council, said earlier this month that India would attempt to unwind the stimulus measures to boost the economy, but he did not specify a timetable for action.
The Central Statistical Organisation said on Monday that the economy would accelerate this fiscal year on the back of strong growth in the manufacturing sector, forecast to rise at 8.9% from 3.2%, and the mining sector, which may grow at 8.7% compared with 1.6 per cent.
However, the financial services and real estate sectors are expected to slow slightly to 9.9% growth against 10.1% in the previous fiscal year.
The latest government data is in line with most economists' expectations and with the growth forecast of the Reserve Bank of India, the country's central bank, which lifted its gross domestic product growth estimates to 7.5% for this year.
Analysts remained bullish on India's capacity to maintain growth despite fears that rising inflation could hit consumer spending.
"The underlying trend in industrial production continues to accelerate, supported by increased activity in the durables and capital goods sectors," said Barclays in an analyst's note.
"We expect this momentum to spill over to the non-durables sector in the coming months, thereby increasing the durability and quality of the current industrial expansion."
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