I went ahead and just rescaled it in the editor itself rather than importing a new png. The new PNG would have added 4 mb to my project, but scaling it in the editor only added 1.5 mb.
Though I could see the appearance of the sprite has been enlarged by scaling on the layout, too bad the collision boarders did not scale with it. Could have saved a bit more size on the project.
Someone let me know if this collision boundary not scaling with layout scaling of sprite is as intended.