New Delhi, January 18
Finance Minister Pranab Mukherjee indicated on Wednesday GDP growth in FY2011-12 may slip to 7.5 per cent or less, but took comfort in the rebound in industrial output in November 2011 and the fall in headline and food inflation in December, and hoped these encouraging trends would further consolidate in the remaining months of the fiscal.

Inaugurating the 84th annual general meeting of the Federation of Indian Chambers of Commerce & Industry (FICCI) here today, Mukherjee cautioned: “We have a difficult last quarter ahead of us in this fiscal year. Our growth for 2011-12 may be around 7.5% or less There are also concerns on the government’s finances for the current fiscal. Performance during the first half on the fiscal front poses some risks in both receipts as well as expenditure estimates. Therefore, adhering to the fiscal deficit target of 4.6% of GDP in FY12 was a major challenge”.

However, there are some clear signs of inflation moderating in the coming months and industrial production is also showing signs of pick up while services and agriculture retained their growth momentum despite a high base year production which is likely to provide a buffer for moderation in growth rate for current fiscal, Mukherjee observed.

Pointing to the difficulties in undertaking reforms, he said: “The progress of economic reforms on some fronts, especially FDI in multibrand retail, and some legislative amendments have not seen smooth passage”, attributing the stalling of the reforms process to political events that were inevitable in a multiparty system. He appealed to Indian industry to help build consensus across the country’s diverse social and political space.

“Indian enterprise has to demonstrate its willingness to marry its economic interests with larger social responsibilities,” he said. Applauding FICCI’s agenda of ‘Empowering India’, he said: “Our strength lies in the availability of a vast youthful workforce, but we can’t rest with the advantage of demography”.

In his presidential address, Harsh Mariwala outlined a five-point strategy to reach a high-growth trajectory of 9 per cent a year. 

Mumbai, January 18
Reliance Industries could be set to conduct India’s largest ever buyback of shares, analysts said on Wednesday, in a move to boost investor confidence after a steep fall in its share price last year.

India’s largest private firm said in a statement to the Bombay Stock Exchange that it would “consider a proposal for buyback of shares” at a board meeting on Friday (January 20), when quarterly earnings are due.

No further details about the buyback were provided but the announcement cheered investors, pushing up Reliance shares on the blue-chip Sensex index by as much as 6.2% to an intraday high of Rs786.80.

“Whatever may be the company’s announcement, it is reasonable to expect that this will be the largest ever buyback programme in the history of Indian capital market,” Jagannadham Thunuguntla, head of research with SMC Global Securities in New Delhi, told AFP.

Thunuguntla estimates Reliance’s buyback — at near 10% of its current share capital — to be Rs 10,000-14,600 crore (US $2-3 billion) in size.

“This buyback announcement will be a strong statement from Reliance that they feel the current share price is undervalued compared with what they believe is its intrinsic worth,” he added.

Cash-rich Reliance saw its share price tumble by 35% in 2011, hit by concerns about slowing gas output from its fields off India’s east coast and valuation worries for other still-to-be-explored energy assets.

The oil and energy giant, controlled by India’s richest man Mukesh Ambani, has been scouting for acquisitions and looking to diversify its revenue sources by expanding into financial services, retailing, hotels and communications.

The group recently announced a foray into the Indian media sector as well as telecom and broadband.

The petrochemical giant has built up a war chest for acquisitions, generating $2 billion through stock sales in 2009, and has cash reserves of over Rs 614 billion ($12.6 billion), as of September-end quarter.

In 2011, Reliance signed a $7.2-billion deal with BP plc for the British firm to take a 30% stake in its 21 largely unexplored deep water oil and gas fields off India’s coast. — AFP

Mumbai, January 18
Tales of the Ambani brothers' mixed fortunes tell the same story — declining opportunities for investment in India. Mukesh may be cash-rich while Anil is in stark need of funding. Although some think that has the makings of a reconciliation between the two, that's unlikely. Mukesh would rather buy his own shares than those of his brother.

Mukesh Ambani's Reliance Industries is considering a share buyback, in which Mukesh himself is thought unlikely to participate. The firm has net cash of around $10 billion. Mukesh has been linked to numerous acquisitions including an investment in his brother's Reliance Communications.

But the buyback announcement suggests a dearth of sound investment opportunities for India's richest man. That's not good news for the Indian economy, reinforcing the impression that political paralysis is stifling investment. Nor is it good news for Anil.

Reliance Communications, whose share price nearly halved last year, is saddled with around $6 billion in net debt. Anil has been trying to sell his telecoms tower unit for almost two years. A deal with GTL Infrastructure collapsed in 2010. In November he entered into negotiations with a private equity consortium of Blackstone and Carlyle. That deal was expected to complete in December but so far nothing has been forthcoming, though it may eventually fetch up to $3 billion.

In the absence of hard cash from the sale of his infrastructure, Anil has this week raised funding from several Chinese banks to refinance $1.18 billion of outstanding convertible bonds. Sources said Wednesday he also intends to raise up to $1.5 billion through an IPO in Singapore of his undersea cable unit. However, Mukesh may feel his own business has better prospects than his brother's. — Reuters

Washington, D.C., Jan 18
The World Bank warned on Tuesday that developing countries should brace for a growth slowdown stemming partly from Europe's debt woes, as it sharply scaled back its estimates for expansion.

"Europe appears to have entered recession, and growth in several major developing countries (Brazil, India and to a lesser extent Russia, South Africa and Turkey) has slowed," the bank said as it updated forecasts made last June.

It predicted the global economy will expand by 2.5% in 2012 and by 3.1% in 2013, well behind the 3.6% growth for each year that the bank had projected in June.

Developing countries' economies will continue to outpace those of richer, developed countries but the World Bank also lowered its forecasts for growth in these countries to 5.4% in 2012 and 6% in 2013. That was down from previous estimates of 6.2% and 6.3% respectively for growth in developing countries.

As well, the World Bank foresees rising threats to growth. "The downturn in Europe and weaker growth in developing countries raises the risk that the two developments reinforce one another, resulting in an even weaker outcome," it said. It also cited failure so far to resolve high debts and deficits in Japan and the United States and slow growth in other high-income countries, and cautioned those could trigger sudden shocks.

On top of that, political tensions in the Middle East and North Africa could disrupt oil supplies and add another blow to global prospects, the World Bank said in a sobering assessment of the challenges facing the economy. It said that while Europe was moving toward a long-term solution to its debt problems, markets remain skittish.

"While contained for the moment, the risk of a much broader freezing up of capital markets and a global crisis similar in magnitude to the Lehman crisis remains," the World Bank said, referring to the US investment bank that went bankrupt in 2008 and helped intensify a global financial crisis.

On balance, the World Bank said global economic conditions were "fragile and there remains great uncertainty as to how markets will evolve over the medium term." — Reuters

New Delhi, January 18
Indian computer security analysts have detected and alerted Wi-Fi users in the country against a possible virus attack that could lead to crashing and hacking of secure networks.

The Indian Computer Emergency Response Team (CERT-In), the country's national agency to respond to computer security incidents, has found the "Wi-Fi Protected Setup (WPS) contains a design error that could allow a weaker-than-expected defence against brute-force attacks, which could allow an attacker to gain unauthorised access to the affected system."

A brute-force attack, in computer terminology, is a programme that is used to crack and stealthily enter into an encrypted and password protected system while WPS is a popular method for setting up a new wireless router for a home network.

"The virus is streaming in the Indian Internet networks with a high severity. The combat mechanisms are being deployed," a computer security analyst with a government agency said.

"An unauthenticated, remote attacker within range of the wireless access point could use the PIN (password) to gain unauthorised access to the device to retrieve the password for the wireless network or change the configuration of the device.

"Failed attempts to exploit the vulnerability could lead to a denial of service condition," the CERT-In said in its alert to Wi-Fi users. — PTI