Mr Ratan Tata expects troubled times to ‘most probably' continue this year. He is also despondent that political conflicts and policy uncertainties have slowed down investment in India's infrastructure.

This is his overall assessment of the economic scene made in his annual communication to the Tata employees on Monday.

The US will witness a slow recovery, while it is going to be slower in the Western Europe and the UK, he said. But “India itself could see a dramatic recovery if inflation remains in check and if the availability of credit and enhanced money supply is re-infused into the system. Asia and certain countries in Africa will present interesting opportunities for us. Let us seize the opportunity of making 2012 a year of great achievement instead of a year of great adversity,” he said.

MODERATE EXPECTATION

Emphasising the need to review and moderate the Group's future projections, he said expansion schemes will need to be in sync with the current realities. “We must however not be so risk averse that we lose out on the interesting opportunities in various geographies,” he said.

Mr Tata, who will pass on the Group's control to the newly-appointed Vice-Chairman of Tata Sons Mr Cyrus Mistry by this year-end, said that to combat the pressures of higher input costs, each Group company will need to vigorously pursue reductions in manufacturing and process costs of products with a view to build back margins.

The unprecedented rise in inflation has obliged the Government to take steps to tighten money supply and restrict credit, which in turn put pressure on growth and the demand for goods and services, he said.

YEAR OF CONFLICT

Last year was also a year of great conflict within India, beginning with the highly visible ‘2G scam', followed by the Anna Hazare's Lokpal anti-corruption movement and the constant adjournment of Parliament due to continued attacks on the Government by opposition parties.

“I'm pleased that in the ‘2G scam', the investigative agencies have stated they have found no evidence of the Tata Group's involvement in the wrongdoings, or conspiratorial action under investigation. The bona fides, ethics and values of the Tata Group have remained intact,” he said.

GROWTH

During the year, the Tata Group's revenue grew to over $83 billion, driven by robust domestic demand in the first half and bolstered by the growth of global IT services by TCS as also the welcome increase in sales of Jaguar and Land Rover vehicles. Unfortunately, the drop in demand for steel in Western Europe has continued to be a major depressing factor in the performance of Tata Steel Europe.

>suresh@thehindu.co.in

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