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Relief for borrowers as RBI slashes repo rate by 50 basis points

The Reserve Bank of India has cut the repo rate by 50 basis points to 5.5%, promising relief for borrowers and boosting optimism in the real estate market.

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Reserve Bank of India

In a significant move aimed at stimulating economic activity and easing the financial burden on borrowers, the Reserve Bank of India (RBI) has announced a 50 basis point cut in the repo rate, bringing it down to 5.5%. This decision, taken unanimously during the Monetary Policy Committee (MPC) meeting held from June 4 to 6, exceeds market expectations and is being seen as a proactive measure to support growth amid a softening inflation environment.

Major takeaway for homebuyers and borrowers

This steeper-than-expected rate cut is set to ease equated monthly installments (EMIs) on long-term loans, particularly home loans. With lending costs likely to fall, banks and financial institutions are expected to pass on the benefit to consumers, making borrowing more affordable. This move is especially encouraging for prospective homebuyers in the mid-income segment, who stand to gain from lower interest payments.

RBI outlook: Steady growth, easing inflation

RBI Governor Sanjay Malhotra explained that despite a fragile global economic backdrop and downward revisions in international trade forecasts, the Indian economy continues to show resilience. “India’s strength comes from the strong balance sheets of five major sectors. We are already growing fast and aspire to grow faster,” he remarked.

Inflation has remained within RBI’s comfort zone, with retail inflation falling to 3.16% in April from 3.34% in March. The central bank now projects the retail inflation for the current financial year at 3.7%, an improvement from its earlier forecast of 4%. Food inflation remains soft, and core inflation is expected to stay benign.

CRR reduction adds liquidity

In another key decision, the RBI also reduced the cash reserve ratio (CRR) by 100 basis points, effectively releasing ₹2.5 lakh crore into the banking system. This is likely to enhance liquidity and improve the capacity of banks to lend.

Sectoral impact: Real estate gets a boost

The real estate sector has welcomed the rate cut. According to experts, the move is likely to strengthen homebuyer sentiment, drive enquiries, and lead to an uptick in residential property sales, especially in urban markets. Vimal Nadar of Colliers India noted that the reduced borrowing costs could significantly improve affordability in mid-income housing.

Piyush Bothra, co-founder of Square Yards, highlighted that the decision will give developers confidence to launch new projects, particularly in low-to-mid housing segments. “A 50-bps reduction will translate into meaningful EMI savings,” he said.

India remains attractive for investors

Governor Malhotra underscored India’s appeal to global investors, noting that the country’s forex reserves stand at $691 billion—enough to cover over 11 months of goods imports. Key economic indicators including discretionary spending, private consumption, and industrial activity remain robust, he added.

While maintaining the GDP growth projection at 6.5% for the current financial year, the RBI outlined quarterly growth expectations as follows: 2.9% (April-June), 3.4% (July-September), 3.9% (October-December), and 4.4% (January-March).

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Congress, BJP attack Bhagwant Mann over remarks on Punjab blasts

Congress and BJP have jointly criticised Punjab CM Bhagwant Mann after he linked recent blasts near defence sites to political motives, triggering a controversy.

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Bhagwant Mann

A political row has erupted in Punjab after Chief Minister Bhagwant Mann linked recent blast incidents to political motives, drawing sharp criticism from both the Congress and the Bharatiya Janata Party (BJP).

The controversy follows two low-intensity explosions reported within a short span of time — one near the Border Security Force (BSF) headquarters in Jalandhar and another close to an army cantonment area in Amritsar. The incidents raised concerns over security, particularly given the sensitive nature of the locations.

In response, Mann suggested that the blasts could be part of a larger political strategy. His remarks triggered a strong backlash, with opposition parties accusing him of politicising a serious security issue.

Leaders from the Congress criticised the Chief Minister’s statement, calling it inappropriate and alleging that such comments undermine the gravity of the situation. They stressed that matters related to national security should be handled with caution and responsibility.

The BJP also joined the criticism, questioning the basis of Mann’s claims and urging the state government to focus on investigation and law enforcement instead of making political allegations.

The developments have led to an unusual moment where both Congress and BJP appear aligned in their criticism of the Aam Aadmi Party-led government in the state.

Meanwhile, the blasts themselves have intensified concerns over safety in border regions, with authorities continuing their investigation into the incidents. No casualties were reported, but the proximity to defence establishments has made the issue particularly sensitive.

The episode has further escalated political tensions in the state, with security and accountability emerging as key points of debate.

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Himanta Biswa Sarma resigns as Assam chief minister, oath ceremony likely after May 11

Himanta Biswa Sarma resigns as Assam Chief Minister after BJP-led NDA’s victory. He will continue as caretaker CM until the new government is sworn in after May 11.

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Himanta sharma

Assam Chief Minister Himanta Biswa Sarma resigned from his post on Wednesday, paving the way for the formation of a new government after the BJP-led NDA secured a decisive victory in the 2026 Assembly elections.

Sarma submitted his resignation to Governor Lakshman Prasad Acharya at Lok Bhawan in Guwahati. The Governor accepted the resignation and asked him to continue as the caretaker Chief Minister until the new government takes charge.

The resignation comes after the NDA’s strong electoral performance, where the alliance won a clear majority in the 126-member Assembly, ensuring its return to power for another term.

Oath ceremony expected after May 11

Speaking to reporters after submitting his resignation, Sarma said the swearing-in ceremony for the new government is likely to be held after May 11.

He indicated that Prime Minister Narendra Modi has been invited to attend the ceremony but is unavailable until May 11, which has influenced the tentative schedule.

Decision on next chief minister soon

Sources suggest that central observers, including senior BJP leaders, are expected to arrive shortly to oversee the selection of the legislature party leader. The newly elected MLAs will then decide on the next Chief Minister.

Despite the formal resignation, party sources indicate that Sarma is likely to continue in the role for another term, given the BJP’s strong mandate in the state.

The move marks the beginning of the government formation process in Assam following the election results declared earlier this week.

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Rahul Gandhi and Vijay alliance took shape through backchannel talks, early signals from Congress leaders

Congress outreach and political calculations led to Rahul Gandhi and Vijay coming together after the Tamil Nadu 2026 election results.

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The coming together of Rahul Gandhi and actor-politician Vijay in Tamil Nadu after the 2026 Assembly elections was not sudden, but the result of behind-the-scenes political manoeuvring and early signals within the Congress.

According to media reports, some leaders in the Tamil Nadu Congress had already sensed the scale of Vijay’s surge during the campaign, anticipating what was later described as a “wave” in favour of his party.

After the results, where Vijay’s Tamilaga Vettri Kazhagam (TVK) emerged as the single largest party but fell short of a majority, communication channels between the Congress leadership and Vijay quickly became active.

A key moment in this evolving political equation was a phone call from Rahul Gandhi to Vijay, congratulating him on the party’s strong performance. The conversation was seen as more than a courtesy, signalling the possibility of cooperation at a time when government formation required additional support.

Reports indicate that discussions within Congress weighed the political benefits of supporting Vijay, especially given the shifting dynamics in the state where traditional dominance by major Dravidian parties has been challenged.

With TVK needing allies to cross the majority mark, Congress emerged as a potential partner, leading to a broader political realignment in the state. This development also triggered tensions within opposition alliances, highlighting the strategic importance of the decision.

The evolving partnership reflects a mix of electoral pragmatism and changing voter sentiment, particularly the growing influence of younger voters, which leaders acknowledged as a key factor in the election outcome.

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