MUMBAI/NEW DELHI: India’s incoming government will be greeted with a $25 billion cheque from the central bank, giving it the option to either boost spending or narrow the fiscal deficit quicker, both of which will be cheered by investors.
On Wednesday, the Reserve Bank of India (RBI) announced a record 2.11 trillion rupees dividend transfer to the government, more than double New Delhi’s and street estimates, leading to a decline in bond yields and a rise in equity markets.
The surplus fund can help the new government, which will take charge after the current elections, bring down its fiscal deficit by 0.3 percent of gross domestic product (GDP) or increase spending on infrastructure or “populist” stimulus, Citi Research’s Samiran Chakraborty said.
“The bond markets would likely hope that the government follows the deficit reduction route, while the equity markets would likely prefer the government taking the expenditure increase one,” said Chakraborty.
During the election campaigns, the opposition Congress promised annual cash handouts of 100,000 rupees ($1,202.07) to poor women and unemployed youth. The party’s star campaigner Rahul Gandhi also promised debt waiver for farmers.
But Prime Minister Narendra Modi of the Bharatiya Janata Party (BJP) has avoided promising any new major welfare measures.
“Despite higher revenue from the RBI dividend, we doubt the government would opt for more populist expenditure in its budget, if the government is BJP-led,” said Shreya Sodhani, an economist at Barclays.
“The current government has not shown a disposition toward populist spending even in an election year.”
The BJP-led government resisted the temptation of spending trillions of rupees on schemes for the poor in its last budget before the election while raising spending on infrastructure to 11.11 trillion rupees, more than three time the sum spent in 2019.
QUICKER FISCAL CONSOLIDATION
The new government will likely present the final budget in July, leaving the administration with only eight months to spend funds allocated to them.
Government spending has been slow so far in the year, with the start of elections from April. Tax collections, meanwhile, have been strong due to buoyancy in the economy.
India collected a record 2.10 trillion rupees in goods and services taxes in April, the first month of the financial year, ensuring the government is on track to meet its planned fiscal goal of 5.1 percent of GDP this year.
This could mean the government will lean toward using the bumper dividend for fiscal consolidation.
There is scope for a slight reduction in the targeted fiscal deficit for the current year, said Ashima Goyal, a professor and an external member of the country’s monetary policy committee, who expects the government to comfortably achieve the targeted fiscal deficit of 4.5 percent by 2025/26.
India’s fiscal deficit ballooned to 9.2 percent during the pandemic but the government has steadily brought this down.
But bringing down the deficit by 130 basis points from 5.8 percent in 2023/24 was seen as challenging and dependent on one-off revenue from either privatization or auction of telecom spectrum.
($1 = 83.1900 Indian rupees)
India’s new government will be spoilt for choice with $25 billion extra in kitty
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India’s new government will be spoilt for choice with $25 billion extra in kitty
- Indian central bank has announced record 2.11 trillion rupees dividend transfer to government, more than double New Delhi’s and street estimates
- Surplus fund can help the new government bring down fiscal deficit by 0.3 percent of GDP or increase spending on infrastructure or “populist” stimulus
US envoy leaves Venezuela with six Americans after meeting Maduro
- Richard Grenell met Nicolas Maduro in Caracas
- Migration, sanctions also discussed
WASHINGTON/BOGOTA: US President Donald Trump’s envoy Richard Grenell said on Friday he was headed back to the United States with six American citizens, a surprise development after he met with Venezuelan President Nicolas Maduro in Caracas.
Officials from the Trump administration had said earlier on Friday that one of Grenell’s top aims for the visit was to secure the release of Americans detained in the country, at a time when the Trump administration has been driving a deportation and anti-gang push in the United States.
Grenell did not name the six men, shown with him aboard an airplane in a photo he posted online. They were dressed in light blue outfits used by the Venezuelan prison system.
“We are wheels up and headed home with these 6 American citizens,” Grenell posted on X. “They just spoke to @realDonaldTrump and they couldn’t stop thanking him.”
Trump cheered the move in his own post, saying Grenell was bringing “six hostages home from Venezuela.”
It is unclear exactly how many Americans were being held by Venezuela, but Venezuelan officials have spoken publicly of at least nine.
Maduro’s officials have accused most of them of terrorism and said some were high-level “mercenaries.” The Venezuelan government regularly accuses members of the opposition and foreign detainees of conspiring with the US to commit terrorism. US officials have always denied any plots.
“American hostages that are being held in Venezuela ... must be released immediately,” Mauricio Claver-Carone, the US special envoy for Latin America, said earlier on Friday, adding the Grenell-Maduro meeting was “not a negotiation in exchange for anything.”
In late 2023, Venezuela’s government released dozens of prisoners, including 10 Americans, after months of negotiations, while the US released a close ally of Maduro.
Maduro told officials in an annual speech to the judiciary late on Friday evening that the meeting between him and Grenell had been positive.
“There are things where we’ve reached initial deals and when they are complied with, new issues will open, hopefully new deals for the good of the two countries and the region,” Maduro said, adding he would be looking to see if what had been discussed with Grenell was reflected in what is communicated by the US about the meeting.
“President Donald Trump, we have made a first step, hopefully it can continue,” Maduro said. “We would like it to continue.”
Maduro and Grenell also discussed migration and sanctions at the presidential palace, the Venezuelan government said in a statement earlier on Friday.
White House press secretary Karoline Leavitt said earlier on Friday that Grenell was also focused on ensuring 400 members of the Tren de Aragua gang in US custody are returned to Venezuela.
An agreement on Tren de Aragua deportations was “non-negotiable,” Claver-Carone said.
Venezuelan attorney general Tarek Saab said last week that the gang had been dismantled in Venezuela in 2023, but that it was willing to restart legal cooperation with the US in order to extradite gang members.
Since taking power on Jan. 20, Trump has kicked off a sweeping immigration crackdown, pledging mass deportations.
Some 600,000 Venezuelans in the United States were eligible for deportation reprieves granted by the previous administration, but US Homeland Security Secretary Kristi Noem said she would cut the duration of the protections. She must decide by Saturday whether to terminate them.
SANCTIONS, ELECTIONS AND OIL
Grenell’s visit does not mean the United States recognizes Maduro as Venezuela’s legitimate leader, Leavitt said.
The two countries have a fraught recent history marked by broken relations, sanctions and accusations of coup-plotting.
But they share interest in several pending bilateral issues, including a license allowing US oil major Chevron to operate in Venezuela.
The administration of former US President Joe Biden reinstated broad oil sanctions after it said Maduro failed to keep promises for a free presidential election and later increased rewards for the capture or conviction of leaders including Maduro, leaving Trump limited options for further penalties.
Maduro’s government-backed victory in the July 2024 vote is contested by the opposition, international observers and numerous countries, including the United States.
Maduro’s government has always rejected sanctions by the United States and others, saying they are illegitimate measures which amount to an “economic war” designed to cripple Venezuela.
The Financial Times reported on Friday that Chevron is trying to protect a special US license allowing it to operate in Venezuela.
Chevron chief executive Mike Wirth told the newspaper the company would engage with the White House, after Secretary of State Marco Rubio said the license should be reconsidered and Trump said the US would likely stop buying oil from Venezuela.
Trump’s Justice Department launches sweeping cuts targeting Jan. 6 prosecutors, FBI agents
- Department reviews all who worked on Jan. 6 cases
- FBI officials in major cities are ordered to quit
- FBI agents group says hundreds could be affected
WASHINGTON: President Donald Trump’s administration launched a sweeping round of cuts at the Justice Department on Friday that appeared to focus on FBI agents and others who worked on cases related to the Jan. 6, 2021, attack by his supporters on the US Capitol.
The shakeup, detailed in two memos seen by Reuters and by three sources familiar with the matter, is the Trump administration’s latest move to remake the US criminal justice system since he returned to the presidency last week. A group representing FBI agents issued a rare public warning of the potential for hundreds of firings at the nation’s top law enforcement agency.
The new administration already has fired more than a dozen prosecutors who pursued criminal charges against Trump in two cases brought by Special Counsel Jack Smith that have been dismissed. It also has paused all civil rights and environmental litigation and ordered criminal investigations of state and local officials who interfere with his hard-line immigration initiatives.
Acting Deputy Attorney General Emil Bove on Thursday told the top federal prosecutors in each state to compile a list of all prosecutors and FBI agents who worked on the investigation of the Capitol riot, which was the largest Justice Department probe in modern US history, two sources briefed on the matter said.
The sources spoke on condition of anonymity.
The FBI was ordered to provide by Tuesday a list of all employees who worked on a 2024 criminal case brought by the Justice Department against leaders of the Hamas militant group, according to a memo seen by Reuters. A source briefed on the matter also said the FBI was asked to provide a list of employees who worked on the two Trump cases brought by Smith.
That memo ordered eight FBI officials to resign or be fired, saying that their participation in the Jan. 6 cases represented part of what Trump has called the “weaponization” of government.
In a statement on Friday, the FBI Agents Association, a membership group of more than 14,000 active and former FBI agents, called the moves “outrageous.”
“Dismissing potentially hundreds of agents would severely weaken the bureau’s ability to protect the country from national security and criminal threats and will ultimately risk setting up the bureau and its new leadership for failure,” the association added.
The staff cuts are hitting career FBI officials and prosecutors in nonpartisan roles who typically remain in their posts from administration to administration. The bureau has a history of political independence and is responsible for highly sensitive investigations involving counterterrorism, public corruption and cybersecurity.
In his first day back in the White House on Jan. 20, Trump granted clemency to all of the nearly 1,600 people charged with storming the Capitol in a failed bid to block Congress from certifying the results of the 2020 election won by Democrat Joe Biden.
Ed Martin, the Trump-appointed top federal prosecutor in Washington, has since launched an inquiry into the use of a felony obstruction charge in prosecutions of people accused of taking part in the Jan. 6 attack.
Major cities targetted
At least five top FBI officials in major US cities — Miami, Philadelphia, Washington, New Orleans and Las Vegas — were ordered to resign or be fired, one of the sources said. Another source said that a sixth senior FBI official, in Los Angeles, was given a similar order.
Another five top officials in FBI headquarters were ordered to leave or face termination earlier in the week, another source told Reuters.
FBI and Justice Department officials declined to comment on the various moves.
“What we are seeing is a raw, unfiltered exercise of presidential authority to purge the government of anyone who put the Constitution first, instead of adherence or loyalty to Donald Trump,” said Bradley Moss, an attorney who represents federal employees.
“At a time when we are facing a multitude of threats to the homeland ... it is deeply alarming that the Trump administration appears to be purging dozens of the most experienced agents who are our nation’s first line of defense,” Democratic US Senator Mark Warner said in a statement. Kash Patel, Trump’s nominee to lead the FBI, told a US Senate panel on Thursday during his confirmation hearing that he would protect the bureau’s 37,000 employees against “political retribution” if he were confirmed. The same day, the Justice Department said it was investigating the release by an upstate New York sheriff’s office of an immigrant living in the US illegally. This appears to be its first use of a new policy to criminally investigate state and local officials who do not comply with Trump’s directives.
Bove, in a separate Friday memo seen by Reuters, ordered the firings of all prosecutors who had been hired on a probationary basis to work on Jan. 6-related cases, noting that Trump characterized their work as “a grave national injustice.”
About 20 people were fired as a result of that order, according to a source familiar with the move.
Bove also accused the Biden administration of rushing to convert the status of probationary prosecutors to permanent status after Trump won the election in a bid to save their jobs.
Plane with 2 aboard crashes in Philadelphia and sets multiple homes ablaze
PHILADELPHIA: A medical transport jet crashed in Philadelphia on Friday about 30 seconds after taking off, setting homes ablaze and unleashing a fireball into the night sky. Two people were on board, the Federal Aviation Administration said.
Gov. Josh Shapiro said he is offering all “Commonwealth resources as they respond to the small private plane crash in Northeast Philly.”
The crash comes two days after the country’s deadliest aviation disaster in almost a quarter century. An American Airlines jet carrying 60 passengers and four crew members collided in midair Wednesday night in Washington, D.C., with an Army helicopter carrying three soldiers. There were no survivors in that crash.
The plane appeared to be a Learjet 55 that quickly disappeared from radar after takeoff. It was en route to Springfield, Missouri, and registered to a company operating as Med Jets, according to the flight tracking website Flight Aware.
The crash happened less than 3 miles (4.8 kilometers) from Northeast Philadelphia Airport, which primarily serves business jets and charter flights. Photos taken at the crash site appear to show residential homes on fire.
Michael Schiavone, 37, was sitting at his home in Mayfair, a nearby neighborhood, on Friday when he heard a loud bang and his house shook. He said it felt like a mini earthquake and when he checked his home security camera footage, he said it looked like a missile was coming down. “There was a large explosion, so I thought we were under attack for a second,” he said.
Flight data showed a jet taking off from the airport at 6:06 p.m. and disappearing from radar about 30 seconds later after climbing to an altitude of 1,600 feet (487 meters).
The plane crashed in a busy intersection near Roosevelt Mall, an outdoor shopping center where first responders were blocking traffic and onlookers crowded onto a street corner in the residential neighborhood of Rhawnhurst. Philadelphia’s emergency management office said that roads are closed in the area.
One cellphone video taken by a witness moments after the plane crashed showed a chaotic scene with debris scattered across the intersection. A wall of orange glowed just beyond the intersection as a plume of black smoke quickly rose into the sky and sirens blared.
Jim Quinn, 56, lives about a half-mile (1 kilometer) from the crash site. He was leaving his home Friday evening when he heard the crash. “All we heard was a loud roar and didn’t know where it was coming from. We just turned around and saw the big plume.”
Quinn then went inside and looked at his doorbell camera footage, which captured a streak of white diving down from the sky, followed by what he described as a fireball. Quinn said that the blast shook houses in the residential neighborhood, and that it was congested with traffic that was redirected from the crash site.
The plane’s owner, Jet Rescue, provides global air ambulance services. The company, based in Mexico, flew baseball hall of famer David Ortiz to Boston after he was shot in the Dominican Republic in 2019 and was involved in transporting patients critically ill with COVID-19.
A message seeking comment was left with Jet Rescue’s US headquarters in Boca Raton, Florida.
The FAA said the National Transportation Safety Board will lead the investigation. The NTSB, which investigates air crashes, said it was gathering information about the crash.
Trump says he will speak with Russia’s Putin
WASHINGTON: US President Donald Trump said on Friday he would be speaking to Russian President Vladimir Putin and said he thinks they will perhaps do something he described as significant.
Trump did not elaborate. He made the comments to reports in the White House’s Oval Office. He also said that Washington was having serious discussions with Moscow.
Russian missile attack targets historic buildings in Odesa, wounding seven
- The Black Sea city known for its picturesque streets of 19th-century buildings is regularly targeted by Russian strikes, often on its port area
- Russian military bloggers alleged that foreign military specialists were staying in the hotel that was targetted
KYIV: A Russian missile attack struck the center of the southern Ukrainian city of Odesa on Friday evening, wounding at least seven people and damaging historic buildings, officials said.
The Black Sea city known for its picturesque streets of 19th-century buildings is regularly targeted by Russian strikes, often on its port area.
“Currently, seven people are known to have been injured in the attack by Russian terrorists on the historical center of Odesa,” the regional governor Oleg Kiper wrote on social media.
All were in “moderate” condition, he said, and receiving medical assistance.
Kiper said in earlier posts that two women and a child were among the wounded.
Ukrainian President Volodymyr Zelensky condemned what he called an “absolutely deliberate attack by Russian terrorists,” saying it was fortunate that it caused no deaths.
Kiper posted photos showing rescuers wheeling a woman on a stretcher outside the city’s historic Hotel Bristol. The photos also show damage to the 19th-century hotel’s ornate facade and interior, including a grand staircase.
Ukraine’s emergency service posted video showing debris littering the street outside the Bristol and a woman with dust on her clothes being helped by rescuers.
It said firefighters had rescued a woman trapped in her room on the second floor and extinguished a fire on the roof.
“Among the people who were at the epicenter of the attack were Norwegian diplomatic representatives,” Zelensky said.
“There is a lot of damage and destruction in the UNESCO-protected area,” Odesa’s mayor Gennadiy Trukhanov said.
Odesa’s historic center is on UNESCO’s World Heritage List.
Its Transfiguration Cathedral — destroyed by the Soviets and rebuilt in the 2000s — was badly damaged by a Russian strike in July 2023.
“As a result of the explosions, a number of historical monuments, including the Literary, Historical and Local Lore, Archaeological Museums, Museum of Western and Eastern Art, and the Philharmonic, have had their windows smashed and their facades damaged,” Kiper said.
Ukrainian media posted photos showing what appeared to be a large crater near the hotel, and fallen masonry, blown-out windows and debris littering the floor inside.
Russian military bloggers alleged that foreign military specialists were staying in the hotel.
