India to remain an economic superpower in Asia

India and China will remain the fastest growing economies in Asia-Pacific by expanding at respective rates of 8.7 per cent and 9.5 per cent in 2011, much above the average of the region, UN agency ESCAP said.

The UNESCAP report outlook for the Indian economy is healthy even as Reserve Bank and Finance Minister Pranab Mukherjee have lowered the growth estimates for the economy for 20 11-12.

Both the RBI and Mukherjee have pegged the Indian economy's growth in this fiscal at eight per cent from the earlier estimates of nine per cent.

ESCAP's projection for India is higher than that for developing economies in the Asia-Pacific region, where growth is pegged at around 7.3 per cent in 2011.

"The region's large developing economies continue to power ahead. Fastest-growing economies in 2011 are expected to be China at 9.5 per cent and India at 8.7 per cent," the report titled 'Economic and Social Survey of Asia and the Pacific 2011' said.

The UNESCAP' estimates about the Indian economy are also better than the projections by the other multilateral agencies like the International Monetary Fund (IMF)which had lowered it to 8.2 per cent.

The UN agency said that private consumption and investment demand would be the main drivers of growth for the Indian economy.

On the challenge of rapid escalation in prices, it said most economies in the Asia-Pacific region are likely to see an increase in inflation, which could push an additional 42 million people into poverty.

"Due to higher food and energy prices, up to 42 million additional people across Asia and Pacific may remain in poverty in 2011, in addition to the 19 million already affected in 2010," the report said.

The report said that low interest rates in developed economies are prompting investors to seek higher returns in emerging markets in Asia and the Pacific, thereby, leading to capital control measures by these economies.

"Developed economies should also support the imposition of such controls by taking measures that deter capital flows, such as taxing them or requiring high margin requirements on foreign exchange derivatives that mimic actual outflows," the report said.

It said that there are still acute concerns about the quality of jobs and vulnerability of workers in the Asia Pacific region.

"The most serious problems are for young women and men, who are 3.2 time more likely than adults to be unemployed," the report added.