Budget 2015: Work towards reducing fiscal deficit, says Kamlesh Rao of Kotak Securities

NEW DELHI: The new government appears to have restored the interest of investors in India with a slew of policy announcements. The Union Budget offers them yet another opportunity to sustain this positive sentiment, says Kamlesh Rao, CEO of Kotak Securities.

The government needs to work towards reducing the fiscal deficit. In addition to this, it should focus on kicking the capex cycle required for sustained economic growth.

“We believe the government will work towards reducing the fiscal deficit. With the need to increase consumption demand, it also needs to have a relook at the personal and corporate taxation rates," says Rao.

"Inverted tax laws will hopefully find correction to realize the 'Make in India' plan of the government," he adds.

Land reforms is another key area the government needs to focus on.

"There is an urgent need to amend land reforms to help major sectors like defence, industrial corridors, rural infrastructure development and affordable housing," says Rao.

"One cannot act on a short term view at 8900–9000 as the markets are going to remain volatile on the back of internal or external news flow, but in the next 12 to 18 months, we are expecting positive indications," he believes. "Down side is limited to 8000 as per Nifty and 27000 as per Sensex. On the higher side, we are expecting 25% to 30% returns in the next 12 to 18 months of time,” he adds.