The countdown for Union Budget 2013-14 has already started and there are lots of hopes from the Finance Minister, P Chidambaram, to bring India back on the growth track. Country's top fund managers, in conversation with Value Research Online, are expecting that FM will announce measures that might bring retail investors back to financial markets.
S Naren, the Equity CIO of ICICI Prudential Mutual Funds, is expecting the government to facilitate investments in financial markets.
What are your expectations from the Budget 2013-14?
Frankly speaking, this time around there is no clear expectations from the budget. However, clear incentive for investments in financial savings is one big expectation which we have from the Budget. The Finance Minister has already committed what is he going to do in fiscal deficit reductions and we all are aware about the final numbers. But how that numbers will be achieved is to be watched very closely.
What is your expectation for mutual funds in this budget?
A clearer expectation for our industry is that they will give some concession to increase financial saving particularly in mutual funds and that is very positive for the industry as a whole.
Where do you see fiscal deficit?
Actually in my view we have to look at what happens to revenue deficit and not what has happened to fiscal deficit. Because fiscal deficit numbers are very clear and everyone knows it. Key points will be how the numbers will be achieved, whether it will come from expenditure reductions, revenue increase or subsidy reduction is to be seen.
What is your view on interest rates after the budget?
Medium term drop in interest rates is clearly the function of drop in current account deficit. Finally interest rates have to come down but its trajectory will depend on how current account deficit moves because the movement our current account deficit comes down all our problems will disappear.