The Week in Review for 03 June 2011

The Week in Review for 03 June 2011

Starting with the state of India’s economy, the government’s Central Statistics Office released newly compiled GDP figures on Tuesday. their message-- be prepared for slower growth. The estimate for fourth quarter GDP growth is a mere 7.8%. The good news is that growth for the full year is still at a respectable level of 8.5%.

But what is more worrying is the fall in investment, which has gone down to its lowest level in six quarters. Growth in investment through gross capital formation reduced to just 0.37% during the three months to March.

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So here’s how fourth quarter growth breaks down by sector. Agriculture fared well, posting an expansion of 7.5%, partly because of the base effect. Manufacturing grew at a healthy 5.5% during the quarter. And mining growth was a lowly 1.7%.

Going on to the big corporate story this week- the much-anticipated 37th annual general meeting of Reliance Industries on Friday. Chairman Mukesh Ambani tried to address the issues investors really wanted to hear about, but his speech left them cold. Shares of RIL tumbled 1.65% on the BSE to 936.15.

Ambani touched on many things, but he made one big promise- to make RIL completely debt free by the end of this fiscal year. Still, when it came to his business plans he announced only one completely new initiative. Those were plans to open a cash-and carry retail business by taking advantage of RIL’s existing vendors. Other initiative included an expansion of the firm’s petrochemicals operations and a move to ramp up gas output with the help of new partner BP.

Of course there’s also matter of falling gas output from RIL’s once-lucrative KG basin. Ambani promised to speed up the process of new discoveries in the basin and in other areas.

German Chancellor Angela Merkel has said her country supports India’s plans to develop an energy mix that includes nuclear power. Germany itself plans to phase out its nuclear power facilities over the next decade. Merkel was on a one-day visit to India.

Angela Merkel also welcomed India’s decision to shortlist the Eurofighter Typhoon for its $10.4 billion contract to buy 126 combat aircraft. The Typhoon is one of the two options India is considering for the mega deal.