Fiscal deficit target doubtful, banking code amended

India’s fiscal deficit in Q1 of FY19/20 provides little assurance about the government’s ability to meet the 3.3% target that it set in the union budget last month. We think that the finance ministry will eventually be forced to relax the target yet again.  Meanwhile, the latest amendments to the Insolvency and Bankruptcy Code that were approved at the Rajya Sabha (upper house of parliament) bodes well for the banking sector, and the Indian economy more generally. In the week ahead, all eyes will be on the RBI’s policy meeting. We are expecting a fourth consecutive 25bp rate cut.