India's economic growth rate will remain subdued at 7.7 percent in 2012 and 7.9 percent in 2013 as downside risks have increased, mainly on account of problems in Europe and the USA, says a UN report.
The government recently lowered the GDP growth target for the current fiscal to 7 percent from the earlier estimate of 8.5 percent.
However, the study gave a positive outlook on South Asia's economic growth prospects and projected that the region's economies will grow by 6.7 percent and 6.9 percent in 2012 and 2013, respectively, accelerating beyond the 6.5 percent growth rate experienced in 2011.
South Asia constitutes India, Pakistan, Nepal, Iran, Bangladesh and Sri Lanka.
The report also raised a red flag on India's fiscal deficit target, saying the Indian government is unlikely to achieve its deficit target of 4.7 percent of the GDP for 2011-12 as lower growth has brought down tax revenues and disinvestment in state-run companies has been put on hold.
Nevertheless, the study has given a positive outlook for India's job market, saying, "India is enjoying gains in employment rates."
