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.
Bhupinder Sethi, Equities Head at Tata Mutual Fund, is expecting a practical budget for the year ahead.
What are your expectations from the Budget 2013-14?
In the last few weeks we have seen that, Finance Minister has been meeting all the global investors and we all know the fiscal deficit target which is pegged at 4.8 percent for FY 14. So given the situation we are currently where there are challenges of slower economy and high fiscal as well as current account deficit. I believe that, options in front of Finance Minister are limited and this budget will be 'practical' and not 'populist' one.
What is your expectation for mutual funds in this budget?
I think there will be some incentives for capital markets. Since we are concerned with current account deficit and propensity of investors to invest in Gold, the budget might discourage people to invest in gold and instead put money into financial saving. There could be steps to incentivize people to invest in capital markets as in the past we have seen saving rates, especially financial saving, dwindling down. Rajiv Gandhi Equity Saving Scheme (RGESS) is little complex and we could see some easing out to some extent.
Where do you see fiscal deficit?
The numbers are out, we have to see how the fiscal deficit numbers are reached. Apart from that, we would be closely looking subsidies treatment. Growth assumptions and revenue targets are also a focus.
What is your view on interest rates after the budget?
We are definitely near the top end of interest rates cycle but rate cut will depend on nature of fiscal consolidation and inflation.
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