SATURDAY WORRIED ANTHROPIC SUGGESTS GLOBAL FREEZE ON AI DEVELOPMENT 06 The largest AI company by market capitalisation warned that the technology is improving so quickly there’s a risk humans would lose control JUNE, 2026 epaper.morningstandard.in facebook.com/TheMorningStandard X.com/TheMornStandard WEST ASIA STOP INTERFERING: LEBANON TO IRAN RECURSIVE SELF-IMPROVEMENT A THREAT Lebanon’s leaders issued calls for Iran to stop interfering in their country’s affairs on Friday, as Israel and the Tehran-backed Hezbollah traded attacks. A CAPITAL VIEW OF NEWS PAGE 9 ROLLICKING GDP BEFORE WAR PAIN Data shows better than expected expansion of the economy in the last financial year. Economic strain expected to be captured in Q1, FY27 Real GDP estimated to reach `323.12 lakh crore in 2025-26, against the First Revised Estimate of GDP for 2024-25 of `299.89 lakh crore NEW DELHI   J8.00 8.3 7.6 7.5 7.5 7.1 6.6 Q1 6.6 GDP Growth Rate (%) Q2 Q3 2023-24 7.8% Economy expansion in January-March quarter, exceeding forecasts Q4 Q1 8% Q2 Q3 2024-25 7% Growth in third quarter in FY26 8.0 7.4 Expansion of the economy a year ago 7.0 6.8 Q4 Q1 7.7% Full-year growth, up from 7.1% in FY25 Impact of Iran war to be visible in the current April-June quarter Nominal GDP or GDP at current prices is estimated at `346.36 lakh crore in 2025-26, against `318.07 lakh crore in 2024-25. Growth rate: 8.9% 7.8 Q2 Q3 2025-26 Q4 7.9% Growth in gross value added (GVA) in Q4. GVA removes volatile components like indirect taxes and subsidies to capture economic activity Even if the growth were to slip below 7% as the RBI forecast suggests... macro stability measures and supply assurances will bring us back to a 7%-plus growth track in FY28 or as soon as external conditions improve — V Anantha Nageswaran, Chief Economic Advisor TAX AXE TO HEAL Capital gains levy chucked to draw foreign investors D I PA K M O N D A L @ New Delhi AFTER days of speculation, the government on Friday bit the bullet and announced tax relief for foreign investors. It took the ordinance route to grant exemptions on interest income and capital gains earned from investments in government securities by Foreign Institutional Investors (FIIs). However, no relief was extended to investments in equities. Hours later, the Reserve Bank of India (RBI) unveiled a slew of measures aimed at attracting foreign capital. Together, these steps are expected to support the rupee, which has been under pressure in recent months. The ordinance amends the Income-tax Act, 2025 to exempt interest earned on government securities, as well as capital gains arising from their sale, exchange or transfer, from income tax for FIIs, subject to the furnishing of prescribed information to tax authorities. It takes effect retrospectively from April 1, 2026. At present, FIIs or Foreign Portfolio Investors (FPIs) face a 20% withholding tax on interest income earned from Indian debt securities, including government bonds and rupee-denominated bonds. Long-term capital gains on government securities are currently taxed at 12.5%, while short-term capital gains attract a 20% tax. The tax relief is expected to make government bonds attractive for foreign investors at a time when India is seeking deeper integration with global debt markets. Rajesh H Gandhi, Partner, Deloitte India, said the tax exemption would increase returns for FPIs investing in Indian government securities by 15-20% and improve the return differential between Indian sovereign bonds and those of other countries, making India more attractive to global investors. As for the RBI, it expanded the universe of securities eligible under the Fully Accessible Route (FAR) by including all new issuances of 15-year, 30-year and 40year government bonds. In another significant relaxation, it increased investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in listed equity instruments without requiring registration with the Securities and Exchange Board of India. The same facility has now been extended to all Persons Resident Outside India (PROIs) as well. The central bank also unveiled a scheme under which it will bear the full hedging cost on fresh Foreign Currency Non-Resident [FCNR(B)] deposits with maturities of three to five years mobilised up to September 30. Further, the RBI restored the time limit for the realisation of export proceeds to nine months, so as to supporting exporters and improve foreign exchange inflows. RBI expects 5.1% inflation, keeps rates unchanged RBI’s measures, along with tax benefits provided by the govt this morning, should help attract foreign capital for govt borrowing Sanjay Malhotra, RBI guv Neutral policy stance While retaining the MPC’s “neutral” policy stance, the RBI said future monetary policy decisions would depend on how inflationary pressures evolve Equity markets disappointed There was disappointment in the equity market as the government announced no tax relief for equity investments. Benchmark indices ended in the red Ordinance route The government said the ordinance was necessary as Parliament is not in session and circumstances required immediate action 3 civilians killed, houses torched in Manipur attack EXPRESS NEWS SERVICE @ Guwahati IN fresh violence in Manipur, three Kuki villagers, including a woman, were killed in an alleged militant attack on Friday . Seven houses were torched. The attack was perpetrated at Loibol Khullen village in Kangpokpi district at around 4 am. Kuki organisation Kuki Inpi Manipur (KIM) alleged that the attack was carried out by ar med members of NSCN(I-M) and its “proxy” Zeliangrong United Front (Kamson faction). “This reprehensible act of violence has resulted in the tragic killing of three innocent civilians—Letkhongam Haokip, his wife Tinmary Haokip, and Jangminlal Haokip, while seven houses were reduced to ashes and substantial damage was inflicted upon civilian properties,” KIM said. Stating that such attacks can never be justified, the Kuki organisation called upon the Central government to apprehend the perpetrators without delay . The Kuki-Zo Council, called for action against the perpetrators, and said, “These repeated acts of violence have deepened fear and reinforced the belief that Kuki-Zo lives no longer matter in Manipur.” D I PA K M O N D A L @ New Delhi THE Reserve Bank of India (RBI) on Friday sprung no surprises, keeping the repo rate unchanged at 5.25%, even as it acknowledged that global economic conditions had deteriorated amid the continuing conflict in West Asia. The central bank lowered its growth forecast for FY27 to 6.6% from 6.9% and raised its inflation projection to 5.1% from 4.6%, citing rising energy prices, supply-chain disruptions and heightened geopolitical uncertainty . Announcing the Monetary Policy Committee’s (MPC) decision, RBI Governor Sanjay Malhotra said the global environment had worsened since the previous policy review, with the ongoing conflict exerting pressure on commodity prices and disrupting supply chains. The RBI now expects India’s GDP growth to moderate to 6.6% during the current financial year - down from 7.7% in FY26 - reflecting the impact of higher input costs and weaker global demand. “The rise in prices of energy and other inputs, coupled with supply disruptions, is likely to weigh on economic activity,” the governor said, adding that prolonged geopolitical uncer tainty could delay supply-chain normalisation and increase costs for businesses. Despite the downward revision, the RBI maintained that the domestic economy remains resilient. Private consumption continues to be supported by discretionary spending, investment activity has retained momentum, and both manufacturing and services sectors continue to expand. Merchandise exports recorded robust growth in April despite elevated freight and insurance costs, while services exports remained strong. The central bank, however, cautioned that downside risks to growth remain significant due to volatile commodity prices, financial market uncertainty, supplychain disruptions and weather-related factors. At the same time, the RBI raised its inflation forecast for FY27 to 5.1% from 4.6%, reflecting the sharp increase in global crude oil and other commodity prices. Malhotra noted that international crude oil prices have averaged around $110 per barrel in recent months, significantly higher than the $85 per barrel assumption used in the previous policy review. The RBI has now revised that assumption to $95 per barrel. Despite mounting inflation concerns, Malhotra refrained from offering any forward guidance on interest rates. He said every MPC meeting evaluates all available options—including a rate hike, a pause, or a rate cut—before arriving at a decision.  PAGES 12 Hotel fire fallout: Govt admits gaps, empowers DMs A N U P V E R M A @ New Delhi DAYS after the Malviya Nagar B&B fire claimed 21 lives, the Delhi government on Friday acknowledged that poor coordination among multiple agencies had often led to a failure to ensure strict compliance with fire safety and building regulations, and announced sweeping measures to ensure accountability and crack down on illegal constructions. Home Minister Ashish Sood said that a lack of coordination among agencies, including the Municipal Corporation of Delhi, Delhi Development Authority fire , department, electricity pepartment, and police, had led to lapses in enforcement. To address the issue, the government has decided to vest district magistrates (DMs) with enhanced powers to determine accountability of officials across departments, recommend departmental action, file FIRs where required, issue show-cause notices and take action against officers found violating norms. The government has also ordered an immediate review of all constructions exceeding the permitted G+4 limit in the city Any illegal construction or deviation . from sanctioned building plans will invite immediate sealing action. The decisions were taken following an emergency meeting chaired by CM Rekha Gupta in the wake of the Malviya Nagar tragedy which focused on preventing sim, ilar incidents, curbing corruption and negligence and strengthening accountability mechanisms. Sood said that the government would also enforce provisions of the Disaster Management Act, 2005 more effectively. Under the law, owners of residential and commercial establishments found guilty of violations could face imprisonment of up to one year along with fines. Joint committees headed by DMs will be constituted in every district, with representatives from the Delhi Fire Service, police, electricity distribution companies, MCD, and other concerned agencies. P3 Officials will be accountable The government said officials will be held personally accountable if loss of life or property occurs due to negligence, carelessness or corruption. Strict action in such cases may include withholding salaries, pensions and retirement benefits. Congress leader Rahul Gandhi on a snorkeling expedition during his visit to the Andaman and Nicobar Islands on Friday. “I was a bit disturbed that such beauty is going to be destroyed” by the Great Nicobar project, he said | PTI | P7 Annamalai quits BJP, joins race for ’31 polls FORMER Tamil Nadu BJP president K Annamalai—known for his aggressive style and fierce anti-Dravidian politics—resigned from the party’s primary membership on Friday The . former IPS officer converted ‘We The Leaders’, a youth-based volunteer organisation launched by him in 2020, into a The MCD has demolished 82 unauthorised properties and sealed 43 others in a crackdown on illegal construction in the last few days. The drive also targetted guest houses operating in violation of building bylaws. NICOBAR POINT The Delhi Police has lodged an FIR and launched an investigation into a series of “coordinated” and “sophisticated” cyber attacks targeting the CBSE’s post-result services portal. Earlier, the CBSE submitted a complaint to the Delhi Police. | P7 political movement and declared his intention to fight 2031 TN Assembly polls. Annamalai also launched ‘APJ Abdul Kalam Centre for Ethics and Politics’ in Coimbatore with the motto “let us be the change to bring change” to train aspiring leaders for public life and electoral politics. His 25-minute online announcement gained the attention of more 82 unauthorised properties razed HC refuses to put preventive measures on CJP protest U D AYA N K I S H O R E @ New Delhi THE Delhi High Court on Friday refused, for now, to order “preventive, regulatory, and crowd-control measures” for a scheduled protest by the Cockroach Janta Party (CJP) on June 6. A vacation bench of Justices Saurabh Banerjee and Amit Sharma denied urgent hearing on a PIL filed an NGO, Save India Foundation, seeking directions in this regard. The organisers of the CJP, a parody political party that came into existence in response to a statement by CJI Surya Kant purportedly comparing unemployed youth to cockroaches, have announced a protest march at Jantar Mantar on Saturday after its founder, Abhijeet Dipke, returns from the US. The CJP is holding a protest seeking resignation of Education Minister Dharmendra Pradhan over exam-related lapses. In the wake of protest, the plea sought deployment of preventive crowd-control measures at the IGI Airport, metro stations and highway entry points, alleging that the CJP has turned the youth into an “unregulated contingent” by “utilising overseas-tethered servers to execute a transnational institutional destabilisation agenda”. The plea sought directions to the authorities concerned to “restrict, regulate, or relocate the scheduled gathering to maintain public order, and ensure that the vital infrastructure and emergency services, like hospitals, railway stations, the high court, and the Supreme Court, function without compromising public safety”. “The June 6 mobilisation be either relocated to an alternative designated site or be strictly regulated with comprehensive videography to ensure that those who are instigating from overseas jurisdictions are prevented from compromising airport security the plea said. ,” PRAGG 1,076 Indians deported from US in ’26 FIR after CBSE flags cyber attacks E X P R E S S N E W S S E R V I C E @ Chennai MALVIYA NAGAR JANTAR MANTAR FIRST INDIAN TO WIN NORWAY CHESS EXPRESS READ A total of 1,076 Indian nationals have been deported from the US so far in 2026, the MEA said on Friday and highlighted that New Delhi and Washington are working closely to tackle illegal migration while safeguarding legal mobility channels. Given enough computing power, an AI system could be able to design and develop its own successor, known as “recursive selfimprovement”. Self-building AI would be a major technological milestone that would bring benefits in science, healthcare and other areas, Anthropic said, but it “also might increase the risks of humans losing control over AI systems” | P10 than 55 lakh people across social media platforms. Positioning his move as a platform to groom a new generation of leaders, Annamalai said the movement would evolve into a full-fledged political party after building a cadre base. He said that those trained at the new centre will be fielded in the next local body polls. He said the movement will embrace the “politics of the soil”. R Praggnanandhaa created history by becoming the first Indian to win Norway Chess in Oslo on Friday. The Chennai Grandmaster beat Germany’s Vincent Keymer in the last round to emerge victorious | P11 First trouble: Karnataka minister quits in a huff EXPRESS NEWS SERVICE @ Bengaluru IN a major embarrassment for the new Congress government, Water Resources Minister Ramalinga Reddy resigned Friday, less than 24 hours after portfolios were allocated, upset at not receiving the Bengaluru Development portfolio he says he was twice promised. Reddy an eight-time MLA , from BTM Layout, said Chief Minister D K Shivakumar had personally assured him the portfolio, which ultimately went to Krishna Byre Gowda. In his resignation letter, Reddy said accepting the allocation went against his conscience, adding he would continue to work as an MLA and Congress worker. Shivakumar acknowledged his promise but said the decision on portfolios was taken by the party high command and could not be reversed. Senior minister K H Muniyappa also voiced displeasure at being re-allocated the Food and Civil Supplies department. However, after a conversation with Rahul Gandhi, Muniyappa said he was happy to accept the party’s decision.