Investors could see a steady interest rate environment and a stable rupee after the Ind...

INVESTORS COULD SEE A STEADY INTEREST RATE ENVIRONMENT AND A STABLE RUPEE AFTER THE INDIAN BUDGET, SAYS CHETAN AHYA OF MORGAN STANLEY. SHOWS: HONG KONG, CHINA (JULY 11, 2014) (REUTERS - ACCESS ALL) CHETAN AHYA, MANAGING DIRECTOR & ECONOMIST ASIA PACIFIC, MORGAN STANLEY 1. (QUESTION GRAPHIC) "What are your views on the Indian budget in terms to fiscal targets?" 2. CHETAN AHYA SAYING: "Yes I would say that what we like in the fiscal deficit number is that the finance minister has targeted it to be 40 basis points lower than what we had in March '14. I think half a point reduction trajectory is the correct way to approach this. But at the same time we would have felt better if the financial '14 number would have been revised to 5 percent and then showing half a point reduction from there. Because currently the number that we have for March '15 at 4.1 does seem to be optimistic. The two areas in which it does seem to be optimistic is first is tax revenue growth assumption is quite high. If you see the breakup of tax revenue growth, each and very line item of cross tax revenue, whether it's customs or whether it's excise or whether it's services, it looks like the number is quite high than what is possibly achievable. At the same time, the non-tax revenue number seems to be slightly optimistic too. There is a significantly higher assumption of dividend receipts from RBI and nationalized banks, which we think was probably a tad optimistic too. So we think 4.1 percent is probably an optimistic number and we are expecting fiscal deficit still to be at 4.5 percent for March '15." 3. (QUESTION GRAPHIC) "What impact would the budget have on the Indian currency?" 4. CHETAN AHYA SAYING: "Well on the INR (Indian rupee), I think to the extent to which the budget goes to enable some of the capital market-related inflows into India, it will mean that there will be support to capital inflows and there will be some kind of a pressure on the currency to not depreciate. We have been arguing that the currency should be weaker because India's inflation is still higher than its straits partners. So as such to maintain c...

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