Can one start developing apps in Android with Intermediate proficiency in Java or should a mastery of Java is pretty much prerequisite for Android development ?
You don't need to be a master at java to start programming Android. The Android developer page provides a good resource for programming apps using the android sdk and is a good resource to use as a reference and for learning the common ways to implement features using the Android APIs. Understanding core java concepts for programming in general is a good start. But everyone has to start somewhere.
Yes, you can start developing apps for Android without mastery in Java.
I'm not a master in Java and my problems with Android were never because of my lack of knowledge about Java (only because lack of knowledge in Android API).
As far as you have strong basics of JAVA, what really matters is knowing the OS itself, perfect understanding of the life cycle of the different components is key, learn to navigate the documentation and start doing your own apps would be extremely helpful, Java will help you just to make use of the framework developed to control and manage the components, the way i see it what really matters is knowing the OS, and learn the best practices...