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
Trump hails ‘unstoppable’ America in return to Congress
WASHINGTON: Donald Trump declared that the “American dream is unstoppable” Tuesday, in an address to Congress met with Democratic hostility that hailed his plans for radical change that are roiling the nation.
With his close adviser Elon Musk among those attending the primetime televised address, the 78-year-old Republican billionaire said that after less than two months back in power he is “just getting started.”
“America is back,” he declared.
Almost every line got loud applause from the Republican Party members.
But within minutes protest began. One Democratic congressman, Al Green, was ordered ejected because he refused to stop heckling and shaking his walking stick at the president.
Other Democrats silently held up placards including two reading “False” and “Musk steals.”
The president hailed the achievements of his first six weeks, vowing to press on with his polarizing bid to reshape the US government and end the Ukraine war — whatever the cost.
He got big cheers from supporters on pronouncing that his war on diversity programs meant “our country will be woke no longer.”
“We have accomplished more in 43 days than most administrations accomplish in four years or eight years,” Trump claimed.
“The American Dream is surging — bigger and better than ever before. The American Dream is unstoppable, and our country is on the verge of a comeback the likes of which the world has never witnessed, and perhaps will never witness again.”
Trump was also setting out his vision on the economy — even as the trade war he launched against Canada, China and Mexico is prompting jitters on world markets and threatening to raise prices at home.
The event marked a triumphant comeback to the US Capitol for Trump — just four years after his supporters stormed the building to protest his 2020 election loss, which in an unprecedented act of defiance he still refuses to fully accept.
Trump is pushing to extend presidential power to its limits, with the popular vote behind him and a Republican-controlled House and Senate doing his bidding.
Aided by tech tycoon Musk, Trump has cracked down on the federal bureaucracy, firing thousands of workers, shuttering entire agencies and decimating foreign aid.
White House Press Secretary Karoline Leavitt said the theme was the “renewal of the American dream and the renewal of the American dream is underway already.
“Look at all that President Trump has accomplished in his first month as president,” she told Fox News.
But there are early signs in the polls that Trump’s sweeping cuts and his failure to tackle inflation are hitting his popularity.
Trump is also upending US foreign policy with his pivot to Moscow over the Ukraine war, which has stunned Kyiv and allies alike.
Days after a televised row in the Oval Office with Ukraine’s leader Volodymyr Zelensky, Trump will then lay out his plans to end the grueling three-year conflict — despite fears that he is giving Russia what it wants.
“He’s going to dive into foreign policy, talk about his intention to end the war in Ukraine,” Leavitt said.
Trump had said on Monday that he would “let you know” during the speech about the fate of a minerals deal with Ukraine that remains unsigned after Volodymyr Zelensky’s disastrous visit.
Leavitt said Trump would also discuss his “plan to bring all the hostages out of Gaza” — the Palestinian territory he has proposed that the United States should take over, sparking outrage across the Middle East.
The US president will finally ask Congress for funds to support his plan for mass deportations of undocumented migrants, some of whom his administration has already dispatched to Guantanamo Bay.
Democrats have so far struggled to counter Trump’s flood-the-zone strategy and his hogging of the news cycle with constant press conferences.
But the speech promises to be rowdy, with Democratic lawmakers bringing as guests a number of federal workers targeted by Musk’s so-called Department for Government Efficiency (DOGE).
The Democratic rebuttal to Trump’s address will be provided by new Michigan senator Elissa Slotkin, a 48-year-old former CIA analyst and rising star in the party.
US lists Department of Justice, FBI buildings in Washington for possible sale
- The potential sell-off appears to be part of Trump’s effort to slash the size of the federal government, led by tech billionaire Elon Musk
WASHINGTON: President Donald Trump’s administration said on Tuesday it was considering selling some of the US government’s most iconic properties, including the headquarters of the Department of Justice, the FBI and the building that once housed Trump’s luxury hotel.
The General Services Administration, which manages federal properties, said it had identified 443 properties totaling more than 80 million square feet that “are not core to government operations” and could be sold off.
The potential sell-off appears to be part of Trump’s effort to slash the size of the federal government, led by tech billionaire Elon Musk. The downsizing drive has already led to 100,000 workers taking buyouts or being fired.
Musk’s Department of Government Efficiency has claimed that it has saved $105 billion so far, in part by canceling leases on government properties. Budget experts have cast doubt on the reliability of DOGE’s data.
The GSA said in a statement it could “no longer hope” to secure the money to bring the properties up to date and said a sale could potentially save more than $430 million in annual operating costs.
Some of the buildings on GSA’s list, such as the Old Post Office, which formerly housed the Trump International Hotel, are newly renovated. Others, such as the FBI’s crumbling J. Edgar Hoover Building, are widely seen as outdated. The GSA said in 2023 it would build a new FBI headquarters in Maryland.
It was not clear how many of the buildings on GSA’s list will eventually be put up for sale, or what sort of price they might bring. GSA did not immediately respond to a request for comment.
Several agencies whose headquarters could potentially be sold off also did not immediately respond to a request for comment.
The list includes the headquarters for several major government agencies, including the Veterans Administration, the Department of Agriculture, the Department of Energy, the Department of Labor, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Federal Aviation Administration.
GSA’s own headquarters were also on the list.
The list includes skyscrapers in Chicago, Atlanta and Cleveland, as well as several Internal Revenue Service hubs that process tax returns.
The IRS said in an internal memo last week that it would sell those buildings starting in June, after the April tax filing season is complete.
Trudeau slams Trump for starting a trade war with Canada while appeasing Putin
- “I want to speak directly to one specific American, Donald,” Trudeau said
- Trump has threatened Canada’s sovereignty, provoking anger in the country
TORONTO: Canadian Prime Minister Justin Trudeau on Tuesday called American tariffs “very dumb” and said that US President Donald Trump is appeasing Russia while launching a trade war against Canada.
In a blunt news conference during his final days in office, Trudeau said that Canada would plaster retaliatory tariffs on more than $100 billion of American goods in response to Trump’s 25 percent tariffs.
“Today the United States launched a trade war against Canada, their closest partner and ally, their closest friend. At the same, they are talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator. Make that make sense,” a visibly angry Trudeau said.
Trump imposed tariffs against Washington’s three biggest trading partners, drawing immediate retaliation from Mexico, Canada and China and sending financial markets into a tailspin. Just after midnight, Trump put 25 percent taxes, or tariffs, on Mexican and Canadian imports, though he limited the levy to 10 percent on Canadian energy.
“What he wants to see is a total collapse of the Canadian economy because that will make it easier to annex us,” Trudeau said. “That is never going to happen. We will never be the 51st state.”
Trudeau addressed Trump directly by his first name.
“I want to speak directly to one specific American, Donald,” Trudeau said. “It’s not in my habit to agree with the Wall Street Journal, but Donald, they point out that even though you’re a very smart guy, this is a very dumb thing to do.”
Later Tuesday, US Commerce Secretary Howard Lutnick said the US would likely meet Canada and Mexico “in the middle,” with an announcement coming as soon as Wednesday.
Lutnick told Fox Business News that the tariffs would not be paused, but that Trump would reach a compromise.
“I think he’s going to figure out, you do more, and I’ll meet you in the middle in some way,” Lutnick said.
In a post on Truth Social earlier Tuesday, Trump said: “Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the US, our Reciprocal Tariff will immediately increase by a like amount!”
Trump has threatened Canada’s sovereignty, provoking anger in the country. Canadian hockey fans have been booing the American national anthem at recent NHL and NBA games. Trudeau channeled the betrayal that many Canadians are feeling.
“Canadians are hurt. Canadians are angry. We are going to choose to not go on vacation in Florida,” Trudeau said. “We are going to choose to try and buy Canadian products ... and yeah we’re probably going to keep booing the American anthem.”
The premier of Ontario, Canada’s most populous province, said that he would issue a 25 percent export tax on electricity sold to the US and may later cut it off completely if the American tariffs persist. Ontario powered 1.5 million homes in the US in 2023 in Michigan, New York and Minnesota.
Ontario Premier Doug Ford also told The Associated Press that he would stop the sale of nickel and rare minerals to the US
Ontario and other provinces already began removing American liquor brands from government store shelves. The Liquor Control Board of Ontario sells nearly $1 billion Canadian dollars ($687 million) worth of American wine, beer, spirits and seltzers every year.
Trump threatens funding cut to colleges allowing ‘illegal protests’
- The US government does not control either privately or publicly funded schools or colleges, although a president has a limited ability to encourage policy goals via federal funding disbursed through the US Department of Education
WASHINGTON: US President Donald Trump said he wanted to cut the federal funding of colleges that allow what he called “illegal protests” in a social media post that civil rights groups called an attack on the freedoms of speech and assembly.
The post on Tuesday appeared to repeat some of the ideas of executive orders he issued during his first term, in 2019, and on January 29, which described the pro-Palestinian student protest movement that swept college campuses last year as antisemitic.
“All federal funding will STOP for any College, School or University that allows illegal protests,” Trump wrote on social media. “Agitators will be imprisoned/or permanently sent back to the country from which they came. American students will be permanently expelled or, depending on the crime, arrested. NO MASKS!“
A spokesperson for Trump did not respond to questions about how the White House would define an illegal protest or how the government would imprison protesters. The US Constitution’s First Amendment protects the freedom of speech and assembly.
The Foundation for Individual Rights and Expression, a non-profit group, said on Tuesday that Trump’s threat was “deeply chilling” and would make students “fear punishment for wholly protected political speech.”
“The president can’t force institutions to expel students,” the statement said.
The US government does not control either privately or publicly funded schools or colleges, although a president has a limited ability to encourage policy goals via federal funding disbursed through the US Department of Education.
Trump’s executive order in January restored a similar order he signed in 2019, instructing the Department of Education to investigate colleges that receive federal funding if they failed to protect Jewish students and staff from antisemitism.
Trump has also told Secretary of State Marco Rubio that he wants non-citizen protesters admitted to the US on student visas to be deported.
Protesters set up tent encampments on college campuses across the US and around the world last year as conflict raged in Gaza. Many of the protests centered on their school’s investments in companies that they said supported Israel’s military occupation of Palestinian territories.
Both some of those protests and some pro-Israel counter-protests involved incidents and allegations of antisemitism, Islamophobia and anti-Arab bias. Protest leaders, which include some Jewish students and faculty, say they are opposed to Israel, but reject allegations that their movement is antisemitic.
UN appeals for funds to help contain Uganda Ebola outbreak
KAMPALA: The UN has launched an emergency appeal to raise $11.2 million to help fund Uganda’s response to an Ebola outbreak that has killed two people, after the country’s health budget was strained by US cuts to foreign aid.
Uganda declared the outbreak of the highly infectious and often fatal hemorrhagic disease in January in the capital Kampala after the death of a male nurse at the East African country’s sole national referral hospital.
A second Ebola patient, a four-year-old child, died last week, the World Health Organization said, citing the country’s Health Ministry.
Uganda’s 10 confirmed cases have been linked to Ebola’s Sudan strain which does not have an approved vaccine.
In a statement sent out on Tuesday, the UN said the funds would cover the Ebola response from March to May in seven high-risk districts.
“The goal is to rapidly contain the outbreak and address its impact on public health as well as associated social-economic life of affected people,” said Kasonde Mwinga, Uganda representative for the World Health Organization, a UN agency.
Uganda has traditionally relied heavily on the US for its health sector funding.
During the last Ebola outbreak in 2022-2023, the United States provided $34 million to fund case management, surveillance, diagnostics, laboratories, infection prevention and control among other activities, according to a US Embassy report.
But President Donald Trump’s administration imposed an aid freeze and US funding to Uganda’s health sector has been slashed, hitting the country’s public health budget, according to government officials.
