Instant View - India finance minister presents 2014/15 interim budget

(Reuters) - India's Finance Minister P. Chidambaram presented the interim budget for the fiscal year 2014/15 to cover expenditure until a new government is formed after elections due by May.

COMMENTARY

RADHIKA RAO, ECONOMIST, DBS, SINGAPORE

"Three positives out of the just concluded speech - the fiscal target in FY13/14 has not only been met but undershot, excise duty rates were cut for a handful of the troubled sectors and (he) assured that fiscal rationalisation will remain on track into 14/15. But, under the hood concerns - primarily on how these deficit targets were met/will be met next year -- remain largely unanswered. The cut in the excise duties will also have a bearing on the indirect tax takeaways, putting revenue targets at risk.

"Clarity on the continuity of few of the tax surcharges levied last year is also awaited, with the quality of fiscal consolidation still in question. Nonetheless, while the rating agencies will sift through the details, they are unlikely to act as yet. Their focus has shifted to the post-election growth and reform agenda."

ANEESH SRIVASTAVA, CHIEF INVESTMENT OFFICER, IDBI FEDERAL

LIFE INSURANCE, MUMBAI

"Some tinkering on excise is positive for auto companies. More importantly clarity on fiscal deficit and government's borrowing program is a greater positive.

"Now we have a roadmap on government borrowing, we were earlier thinking it to be about 6.30 lakh crore (6.3 trillion rupees), and what has come is much better than expectations.

"This is positive for equities. Elections are next to watch. We should now see if markets rally from here on Modi optimism. Any substantial decline would be a buying opportunity."

VIJAI MANTRI, CHIEF EXECUTIVE, PRAMERICA ASSET MANAGERS,

MUMBAI

"The market was fixated on the fiscal deficit number and the borrowing program and I think all of them are in line with expectations.

"Since the last one year India was under so much scrutiny because of a probability of a rating downgrade, we have been in an environment where the policy makers have been constantly communicating with the various stakeholders. So I think what came out in the final document was not surprising, which is a net positive from the market's point of view given that the finance minister has been able to deliver on his promise.

"I think the interim budget is also positive for the auto industry given the long awaited excise duty cuts, but it also depends on whether the next government will continue this or not."

SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI

"Refraining from populist announcements, the budget has proposed a few measures to support investments and consumption by cutting excise duty. The subsidy payment roll over was along expected lines, so no incremental negative surprise. Overall, one could say that its largely a non-event budget.

"The only positive in the interim is that the net borrowing program for the year at 4.6 trillion rupees is lower than last year's 4.8 trillion rupees."

NAVNEET MUNOT, CHIEF INVESTMENT OFFICER, SBI FUNDS

MANAGEMENT, MUMBAI

"It sends a good signal it terms of fiscal condition. But for next year borrowing we have to still wait and watch the borrowing program in the budget of the next government. The market still expects borrowing of 6 lakh crore (6 trillion rupees).

"It's marginally positive for some sectors, but kind of a non event really. Elections and global environment especially the ouflows from emerging markets are next key factors to watch."

DARIUSZ KOWALCZYK, SENIOR ECONOMIST AND STRATEGIST, CREDIT

AGRICOLE, HONG KONG:

"The deficit numbers are better than expected but the FY 14/15 call is unlikely to materialise given the one-off nature of factors leading to FY13/14 improvement and given slow growth. Still, overall, the budget figures and borrowing plan should have a modestly positive impact on the INR, G-Secs and Sensex this week."

(Reporting by India markets and treasury teams)