Indian color schemes are typically vibrant and robust. A traditional color combo is orange and pink. For paint colors, look at Copper Harbor 6634 and Grenadine 6592 by Sherwin Williams. You can temper these colors by adding gray or a soft turquoise to the mix.

On your paint problem I can't be much help. This usually happens because of damp -- please get a damp expert to make sure that there isn't any damp lurking in your walls. I had this once when I had pipes leaking inside the walls. I didn't know that. The other alternative is something like painting before the plaster is dry or some kind of chemical mismatch. I do know you will have to scrape all the mucky powdery stuff away and start again, at least on those areas. Don't try to seal and prime and repaint until you know exactly what the problem is and how to fix it.

So sorry.....I see the dimensions on your floor plan now....oops. It was middle of night here. You have a great place with lots of options. I will try to find a picture for you, but here is what I would try. TV on left wall. Put it on a console table 20" to 30" high, or wall mounted with a wall mounted console below. TV should not be too high or too low for viewing pleasure. The main walkway to the balcony will be on left side in front of TV. To see how the arrangement feels, Try your sofa on the right wall facing the TV. Then put one of the chairs in front of the sofa with its back to the glass and the other opposite of it with the back to your entry. If you feel this arrangement is too far from the TV, a sofa table can be used behind the sofa to move the whole seating arrangement forward. Then if this feels good, you can add a rug. The rug should be at least big enough that the front feet of the furniture can rest on it. You will then need tables on the sides of your sofa. You have the choice of a coffee table or what is called "cocktail ottoman" which you can put a tray for drinks and food on, but still put your feet up. That is always nice when watching TV. If you like this arrangement and go to buy new furniture pieces,get the chairs on each side of the sofa that swivel so the person can watch TV easily. You need to think a lot about what colors you will use in this houses if any rooms are done, take some cues there. It's a big decision that will influence every purchase. Find a 3 color combo that appeals to you. Again look on Houzz at the living room pictures. Post some here that you like.

Choosing any light color combination will give an illusion of a bigger room. My suggestion will be using shades of white light cream pie from asian paints and bringing in the colors in the room though, furniture, fabrics and art pieces. Connect with me for further details.