Reasonable revenue numbers make Budget 2015 targets look feasible: S Naren, ICICI Prudential AMC

In a chat with ET Now, S Naren, CIO, ICICI Prudential AMC, shares his views on the Union Budget 2015. Excerpts:

ET Now: Your thoughts on the Union Budget 2015?

S Naren: The first and most important thing is that the revenue numbers over the last four-five years always looked over-budgeted. But this time, the revenue numbers look pretty reasonable. That makes the entire budget look feasible. Such reasonable numbers would help us a lot over the course of the next one year.

I would say that may be at this point of time there was no scope for a big-bang budget. To have a big-bang budget, you need to be back in 90s when you could actually bring down tax to GDP ratios. Today, tax to GDP ratio and revenue deficits are so high that there is very little scope for a big-bang budget.

So, nowadays the budget reflects what you can do slowly — improve revenues, improve capex. That is what this government has done in the Budget 2015.

So on the whole, it's a positive budget. Every year we see post-budget discussions on what budgetary tweaking meant. Thos things are pretty positive in this year’s budget.

ET Now: What is your view on REITS? There has been some sort of sops to make the instrument attractive. This is going to be a key vehicle for infrastructure — power companies, real estate companies, etc. — to raise funds. Your take?

S Naren: Actually, last year's problems are getting resolved now. The direction is clear. Whenever you are starting a new system like REIT, there will obviously be some teething trouble. That's is what is happening now.

Hopefully over the next few years we will start to see a REITS come. That would be a real positive, given low global interest rates and high Indian rates. So, that process should really happen. It should be a good valuation source of capital for our commercial real estate industry.