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The International Monetary Fund said though India has worked on the fundamentals of its economy, there are problems, including the long-term drivers of growth, that need to be addressed.

The IMF on Tuesday trimmed India's growth forecast by 90 basic points to 6.1 per cent. This is second downward revision in seven months and in total 120 basis points reduction. 100 basis points is equal to one percentage point.

"India has worked on the fundamentals (of its economy), but there are problems to be addressed. In the financial sector, especially non-banking institutions, there are steps taken now to consolidate banks. They ought to help resolve some of these issues," IMF Managing Director Kristalina Georgieva told reporters at a news conference here.

"In India, what is critically important is to continue with addressing the long-term drivers of growth. Investment in human capital in India is a top priority. It has to continue bringing women in the labour force. It is very important. India has very talented women, but they stay at home," she said.

Georgieva said there has been "a very strong growth" in India over the last years and the IMF is projecting reasonably strong growth for the country.

However, "like the rest of the world, India is experiencing a slowdown. So slightly over six per cent is what we expect to see in 2019", she said.

"Structural reforms are priority for India. We expect to see those reforms continue," Georgieva said in response to a question.

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The government may consider bringing down its stake in state-owned Bharat Heavy Electricals (BHEL) and National Mineral Development Corporation (NMDC), sources told CNBC Awaaz.

The stake in BHEL may be pared in tranches to 26 percent from 63.17 percent now.

An inter-ministerial group is expected to meet soon to discuss the stake sale.

The government may also look to sell the state-run power player's non-manufacturing units to private players.

Four to five units of BHEL are reportedly marked for sale to private players this fiscal.

Earlier this month, the government cleared disinvestment in five PSUs, a move which is expected to cover nearly 60 percent of its disinvestment target for this financial year.

The government has a divestment target of Rs 1.05 lakh crore for the current financial year. In both FY18 and FY19, the divestment proceeds exceeded the target of Rs 1 lakh crore and Rs 80,000 crore, respectively.

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The Supreme Court has agreed to an urgent hearing on the public interest litigation filed in regards to the Punjab and Maharashtra Cooperative Bank case, as per a CNN-News18 report.

The petitioner, identified as Bijon Mishra, has sought the full protection of over 15 lakh affected bank customers and 100 percent insurance cover over their savings with the institution, the channel added.

The RBI had issued directions to PMC Bank on September 23, restricting basic banking services like cash withdrawals. Initially, the limit was set at Rs 1,000 per depositor. The regulator also appointed an administrator and three-member advisory committee to oversee the bank’s operations after its board was superseded.

The multi-state cooperative bank came under fire for fraud and misreporting of bad loans. The lender was also found to have violated the RBI’s group exposure norms. Its exposure to the realty firm Housing Development & Infrastructure (HDIL) is being investigated by the authorities including the Economic Offences Wing.

Forensic Auditors, appointed by the bank’s administrator, are also looking into the related transactions, the RBI said.

“The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank,” the regulator said.

Last week, Finance Minister Nirmala Sitharaman met with the bank’s customers on her visit to Mumbai. She said she spoke to the RBI governor, who had assured that customers' concerns would be addressed as the top priority. The central bank's board that met in Chandigarh also discussed the existing regulatory framework of cooperative banks among other issues.

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The newly formed Jal Shakti Ministry will create 3.75 million jobs for women across the country.

Speaking at the Bloomberg Equality Summit, Smriti Irani, Union Minister of Women and Child Development and Textiles, said the government’s mission is to employ five women each across 750,000 villages to be trained to ensure water quality, maintain water hygiene and turn water into an enterprise.

“Under the Jal Shakti Ministry, there will be massive employment generation for women in the districts identified. At present, we have found water-related challenges in 256 districts. We are involved in training women across these districts,” she added.

On female labour-force participation

India has a female labour force participation rate of 27 percent, which is among the lowest in the world. Talking about steps to improve this scenario, Irani said the government is taking a series of initiatives to empower women.

“One of the biggest challenges for women was access to credit. Through the Jan Dhan Yojana, about 199 million women (out of 370 million accounts) have had their bank accounts opened in the last five years. Similarly, there were 200 million loans disbursed as part of the Mudra scheme. Of this, around 70 percent beneficiaries were women,” she added.

The idea, she said, is to empower women at the grass root level. Talking about an older initiative when Prime Minister Narendra Modi was the Chief Minister of Gujarat, Irani said he had encouraged villages to come as one unit and vote for women leaders in local Panchayats. Wherever women were elected as representatives, those villages got additional government funding.

On formal jobs, Irani said the government has increased the maternity leave to 26 weeks, and it was now the responsibility of companies to ensure that these women are not left behind when it comes to promotions.

In male-dominated professions, Irani said the number of women employed is seeing an increase. Citing the example of chartered accounts, Irani said that from the late 1940s (when Institute of Chartered Accountants of India was set up) till 2014, India only had 50,000 female chartered accountants. "However, that number rose to 75,000 between 2014 and 2019, and is estimated to touch 150,000 over the next five years."

When prodded on the government’s future focus areas, Irani said the unorganised sector has been a cause of concern, despite the higher female labour force participation, as they offered lesser medical benefits and pay.

On safety and health

Irani said the primary objective of the government is to ensure the safety of women and children. "The government has funded setting up of 1,023 fast track courts where all the pending cases relating to safety of women and child can be expedited."

Going forward, she said the government's focus will be on dealing with crimes against women in a more stringent manner. “The perception was that an all women police station was an answer to every challenge. However, we are working towards ensuring that every police station in our country has desk exclusively manned only for the safety of women in that district/area.”

On healthcare, the Women and Child Development Minister said the Ayushman Bharat (health insurance) scheme has ensured that women who have otherwise been reluctant to seek medical care do so without any hesitation.

Under this scheme, the government aims to provide health insurance cover of Rs 5 lakh to 50 crore Indians free of cost. This includes families from lower income groups that fall under the socio-economic caste census (SECC) data of 2011.

Citing data, Irani said that within a year of the health insurance scheme’s launch, 530,000 women have been tested for cervical cancer and 300,000 for breast cancer and are being treated.

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India’s industrial output contracted by 1.1 percent month-on-month (MoM) in August, according to the Index of Industrial Production (IIP) data released by the government on August 9.

Industrial output, or factory output, is the closest approximation for measuring economic activity in the country's business landscape.

Manufacturing output, which accounts for more than three-fourths of the entire index, fell 1.2 percent in August, against a 4.2 percent rise in July.

Mining grew 0.1 percent in August against a growth of 4.9 percent in July.

For the April-June period, the eight infrastructure sectors averaged 3.6 percent growth. Exports contracted 1.7 percent during the same period.

India's gross domestic product (GDP) growth in the March quarter slowed to a five-year low of 5.8 percent, down from 6.6 percent in the December quarter. Annual GDP growth slowed to 6.8 percent for the year that ended on March 31 from 7.2 percent in the previous year.

Factory output, which is measured by the index of industrial production (IIP), contracted in March 2019. This was its first such contraction in 21 months, showing declining momentum of both investment and consumption. Even core industries productions of steel, electricity, coal and cement are falling or have been stagnant in recent quarters.

The national income data have reinforced signs that were emanating from a slew of shop-end data, such as car and consumer goods sales, often seen as proxy indicators to gauge trends in household spending.

To combat the slowdown, Finance Minister Nirmala Sitharaman  announced a cut in corporate tax rates in September, bringing it down to 22 percent from 30 percent for existing companies, and to 15 percent from 25 percent for new manufacturing companies.

Earlier this year, the International Monetary Fund cut India’s gross domestic product growth forecast for 2019-20 by 20 basis points to 7.3 percent, followng similar action by the Asian Development Bank and the Reserve Bank of India (RBI).

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Observing that the GST regime is based on 'one nation, one tax theory', the Bombay High Court quashed a Maharashtra Sales Tax order that had refused refund of input tax credit to the duty-free shops at the Mumbai international airport.

Noting that these shops are eligible to get refund of the input tax credit on the entire amount of Goods and Services Tax (GST) paid, the high court said the imposition of local taxes on these outlets would hamper foreign trade.

A division bench of justices Ranjit More and Bharati Dangre quashed and set aside the January 10 order passed by the Deputy Commissioner of Sales Tax (Mumbai) refusing to refund the input tax credit to the petitioner (owner of duty free shops in Mumbai International Airport Limited-MIAL) pursuant to the sale of duty-free goods from the shops at the departure area of the airport.

The bench noted that the previous order was arbitrary and against the provisions of Article 286 of the Constitution.

Under this article, no state shall impose tax on supply of goods that takes place outside of the state territory and in cases where the supply is made in the course of import into India or in the course of export out of India.

In its order dated October 7, the high court bench noted that if a duty free shop, which caters to international passengers, is subjected to local taxes by the state then the price of the goods, which are supposed to be free of taxes and duties, will go up.

"This would prevent the duty free shops in India from competing with the duty-free shops at international airports elsewhere in the world. This will hamper and prejudicially affect our foreign trade, and augmentation and conservation of foreign exchange," the court stated.

Challenging the sales tax order, the petitioner argued in the high court that duty-free shops at the Mumbai international airport cannot be saddled with burden of taxes or restrictions.

The petitioner had told the court that they get refund of input tax credit pursuant to sales from their other duty free shops in the departure area of other international airports within India.

"The GST regime is based on 'one nation, one tax theory'. The authorities in the state of Maharashtra cannot give a discriminatory treatment, particularly when the refund has been and is being granted in several other states," the bench said in its order.

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Banks, both private and public sector ones, will remain closed on October 8 on account of Dussehra.

The month of October has eight holidays in total, including the working offs on Saturdays and Sundays. There are, however, regional variations, with banks in Kolkata having an extra off on October 7 on account of Maha Navami/Ayudha Pooja.

October 2 was the first bank holiday this month, and the last one for most cities will be on October 28 for Diwali.

Keep these things in mind while planning your finances in October. As the bank holidays have come after the weekend, chances are that ATMs in your areas may run out of cash. Hence, be sure to make provision for cash contingency.

Some banking services like IMPS, NEFT amd RTGS are available even on holidays although with different rules and regulations.

Immediate Payment Service (IMPS) is available throughout the year including on Sundays and bank holidays. However, the timings and transaction limits for IMPS may vary from bank to bank.

National Electronic Funds Transfer (NEFT) services are not possible on holidays, as declared by the Reserve Bank of India (RBI). In case of any transactions made on such days, the amount is debited on the same day but credited to the beneficiary's account on the next working day.

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The RBI on Tuesday began its rate-setting huddle amid widespread expectations that the Monetary Policy Committee (MPC) headed by Governor Shaktikanta Das would slash benchmark interest rate to revive the sagging economy.

The Governor has already hinted that the benign inflation provides room for further monetary policy easing while space for fiscal space is limited.

The government has already announced a series of measures including steepest cut in corporate tax, rollback of enhanced surcharge on Foreign Portfolio Investors, among others to jump-start growth which hit a six-year low of 5 per cent during the first quarter of the current fiscal.

The six-member MPC is scheduled to announce the fourth bi-monthly monetary policy for 2019-20 on Friday, October 4, after a three-day meeting. There is no meeting of the panel due to national holiday on October 2, which marks birth anniversary of Mahatma Gandhi.

The central bank has already slashed the repo rate four times consecutively this year amounting to 110 basis points in aggregate.

At its last meeting in August, the MPC reduced the benchmark lending rate by an unusual 35 basis points to 5.40 per cent.

The upcoming MPC meeting comes in the backdrop of the RBI's mandate to banks to link their loan products to an external benchmark, like repo rate, for faster transmission of reduction in policy rates to borrowers, from October 1.

Ahead of the meeting, the Das-headed Financial Stability and Development Council (FSDC) sub-committee took stock of the prevailing macroeconomic situation.

Earlier, the RBI Governor had said the government has little fiscal space, giving hopes that the central bank may provide more monetary stimulus to prop up the economy.

The government's fiscal space has been squeezed on account of cut in rates of corporate tax as well as lowering of GST rate on various goods. Revenue collection too has been below the Budget estimates.

Experts opine that another rate cut is on the cards as the government's hands are tied and the onus of taking initiatives now rests with the central bank.

Shanti Ekambaram, President, Consumer Banking, Kotak Mahindra Bank, said with inflation still within the RBI's medium-term target of 4 per cent, the MPC has the headroom to cut the repo rate further.

"However, the recent volatility in crude oil prices and the fiscal measures announced by the government will have an impact on inflation in the medium term and the fiscal deficit. Hence, we expect the MPC to be more measured in its response with a rate cut of 20-25 basis points in the October policy," she said.

According to NAREDCO president Niranjan Hiranandani, there is expectation of a further 50 basis points repo rate cut in the backdrop of muted inflation which stands lower than the expected 3.2 per cent.

The further reduction of repo rate will not only bring down the lending rates but also incentivise investment and boost consumption, he said.

While economic activities are showing sings of sluggishness, the policy makers are drawing solace from the fact that retail inflation remains in the comfort zone of the central bank.

Retail inflation inched up to 3.21 per cent in August but remained within the RBI's comfort zone. The RBI has been mandated by the government to ensure that inflation remains below 4 per cent, with deviation of 2 per cent on either side.

Experts and industry feel low inflation provides enough headroom for the RBI to further lower the policy rate, especially when festive season has just started. People make huge purchases during Navratras and Diwali.

With liquidity concerns in the NBFC sector almost taken care of, the real estate sector too is hopeful that the RBI will go in for the much needed rate cut to boost demand for affordable housing.

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HDFC Bank Managing Director Aditya Puri on September 30 said demand is picking up in semi-urban and rural India.

"We are starting to see a change in sentiment; but it won't happen overnight," Puri said in an interview with CNBC-TV18.

Puri said the bank is starting to see disinvestment and expenditure pick up.

"We are confident of growth and putting a lot of effort behind it," Puri said.

Puri also said he expects better growth for the bank every quarter.

"MSME portfolio may see some marginal hit due to shift to external benchmark but overall margins will remain intact," he said.

On the subject of Reserve Bank of India (RBI) monetary policy, Puri said that he is expecting a 25-40 bps rate cut.

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A district map of Uttar Pradesh, India’s most populous state, makes for a compelling visual—that of a bull about to charge. Lalitpur in south-central and Sonbhadra in southeast that protrude into the neighbouring states appear strikingly similar to the hooves of a bull getting ready for a big leap.

But when it comes to the financial might, it is Gautam Budh Nagar, a tiny district in the western periphery, which is most bullish among the state’s 75 districts.

This doesn’t come as a surprise. Gautam Buddha Nagar has Noida and Greater Noida, Uttar Pradesh’s showpiece townships just off the national capital, peppered with high-street malls, glitzy corporate towers, and acres and acres of residential complexes. The Taj Expressway, connecting Delhi with Agra, runs right through the district.

Shravasti, in the east, on the other hand, recorded a DGDP of Rs 3,506 crore, 26 times lower than that of Gautam Budh Nagar. Little wonder then that Shravasti is among 117 “Aspirational Districts” that the NITI Aayog has identified for a focussed policy intervention.

For Chief Minister Yogi Adityanath, who wants Uttar Pradesh to be a $1-trillion economy with GDP targets identified for each district, it is the laggard districts that will need all the attention and hand-holding.

At Rs 21,906.86 crore, the DGDP of Varanasi, one of the oldest living cities in the world and Prime Minister Narendra Modi’s parliamentary constituency, is way behind Gautam Budh Nagar. Amethi, a pocket borough of Congress’s first family’s until this year’s Lok Sabha election when the then party president Rahul Gandhi lost the constituency to Union Textiles Minister Smriti Irani, ranks a lowly 65, with a DGDP of Rs 8,19,474 crore.

Prayagraj, earlier known as Allahabad, and Ayodhya have a lot of catching up to do in terms of economic activity measured by DGDP. Even having state capital hasn’t helped the Lucknow district, which has a DGDP of Rs 44,246.01 crore, not even half of that of Gautam Budh Nagar.

For Uttar Pradesh as well as India to make a decisive leap forward, these backward districts have to figure prominently when policymakers sit down in Lucknow to draw development plans.

According to Indicus Analytics, an economic research and data analytics firm which first came out with district-level GDP figures more than 10 years ago, such data provides granular insights into the Indian economy.

Last year, the Uttar Pradesh government launched the `One District, One Product’ (ODOP) scheme as part of a broader strategy of concentrated agro and industrial development focus on each district, offering an array of fiscal incentives, and credit, marketing and policy support.

While the large corporations housed in Noida are aggressively global, the road to Uttar Pradesh’s $ 1 trillion GDP goal lie in boosting incomes of small enterprises, local artisans and craftsmen, which is what the ODOP scheme seeks to achieve.

According to PHDCCI, an industry chamber, “micro and small units involved in ODOP need institutional intervention for strengthening marketing capabilities. The need of the hour is providing hand holding to micro and small units through formation of Special Purpose Vehicles (SPVs)”.

Adityanath’s focus on development at grassroots also fits into what some analysts say is the need o focus on identifying India’s next growth hotspots, away from metropolises.

According to global consulting major McKinsey & Company, there are commercial opportunities for companies to tap beyond the current growth centres, which require a smaller and a discrete approach.

“To get the most from this granular approach, companies need to develop customised strategies for each geographic sliver. To do so, they must map priority geographic segments to product categories and extensions,” McKinsey said in its 2014 report “India’s economic geography in 2025: states, clusters and cities”.

Adityanath’s emphasis on district-level GDP also gels with the “Aspirational Districts” programme of NITI Aayog, the Union government’s think tank, which seeks to improve the socio-economic status of 117 districts from across 28 states.

Eight of these—Balrampur, Shravasti, Bhairach, Siddharth Nagar, Chandauli, Sonbhadra, Fatehpur and Chitrakoot—are in Uttar Pradesh. In terms of DGDP, most of these districts occupy the bottom rung.

Among these “aspirational districts” Shravasti with a DGDP of Rs 3,506 crore is ranked 75th, behind Chitrakoot (74) with a DGDP of Rs 3,674 crore and Balrampur (70) with a DGDP of Rs 6,844 crore.  Chandauli (66) with a DGDP of Rs 7,443 crore, Siddharth Nagar (63) with a DGDP of Rs 8,535 crore, Bahraich (41) with a DGDP of Rs 11,797 crore, Sonbhadra (37) with DGDP of Rs 12,530 crore and Fatehpur is at rank 31 with a DGDP of 14,048.71 crore are the other “aspirational districts” in the UP, according to NITI Aayog.

Central and eastern regions emerge the worst in the state’s district DGDP sweep stakes. The ambition of the turning Uttar Pradesh into a $1 trillion economy—a five-fold jump from the current nearly $200 billion—will depend on these and other laggards leapfrogging into the upper-middle ranks, even as Noida and Greater Noida remain the jewels in the crown.