29/02/2016 BBC Business Live


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This is Business Live from BBC News with Victoria Fritz


India's finance minister makes some very ambitious promises,


but will it boost the Indian economy


that's our top story on Monday 29th February.


It was a populist budget to boost farmers -


but what was in there for businesses?


It's a strategy shift that could boost India's ruling party


in coming state elections, but will it disappoint investors?


Also in the programme: Millions of workers in China are set


to lose their jobs - a high price to pay


Also we'll bring you all the very latest from the markets,


Plus, would you put your money in a bank with no branches,


Well, the latest breed of challenger banks,


as they're known, promise to disrupt the world


We ask the boss of one new app bank just how.


And do tell us what you think about the stories we're covering today.


To join in the debate, just use the hashtag BBCBizLive.


India is enjoying its economic status.


It's overtaking China to become the world's


This morning, the finance minister, Arun Jaitley,


It's a populist plan to boost farming aid


But 2016 is a year of reckoning, let's take a look why.


Mr Jaitley says his economy would grow by 7.6 percent


The IMF predicts growth of 7.5% for 2016 to 2017.


But some economists doubt India will achieve that.


And to hit growth targets, Mr Jaitley may have


deficit to 3.5% of GDP in the coming financial year.


The government has struggled to get reforms on tax,


labour and land acquisition past the opposition -


all vital to make India more prosperous.


more to create jobs for the 1 million young Indians who join


Victoria was outlining some of the ambitious plans of this current


government. Tell us more about what was in the budget? The government


recognises that the rural economy has been under stress for two years


because there has been less than sufficient rainfall during the


monsoon season, and that is something they have tried to fix in


this budget. One of their aims is to double farm incomes by 2020. They


have also talked about spending more on infrastructure and bailing out


state-owned banks. I have with me the leader of direct access BMR


advisers. What did you think of the budget? I think it was a sensible


budget. The finance minister reassured us on the macroeconomic


stability for India and made sure we are spending right and earning


right. But was there enough in that for business? The government


promised to ease businesses in India. I think he made a good


commitment. He talked about the bankruptcy code being brought in. He


talked about the first cuts which are taking place taxes. And


importantly, he is trying to bury the ghost of Vodafone and other


indirect transfers that has been troubling India since the


retrospective tax came in. So he is putting a framework out there to


have reconciliation and closure to that issue. In India, it is a lot


about making promises, but are they being delivered? Do you think there


is enough in that budget to keep the economy growing at more than 7% in


the next year? If you look at how much he is planning to spend on


roads, railways and airports, he is also talking about recapitalisation


of the banks, which is important. I think it is a sensible package,


which should keep us on a growth trajectory. They have talked a lot


about spending money on the infrastructure and trying to help


start-ups by giving them tax incentives. That is a lot of


spending. Did you hear enough about how they will make money? On the


making of money, he has shied away from trying to increase tax rates,


especially indirect tax rates. So there is concern about that. He has


also made it clear that he has to stick to fiscal deficit targets that


have been set for him. So he is confident that there will be


sufficient buoyancy in the economy and sufficient headroom on tax


collections. And let's not forget, here's hoping that the oil subsidy


burden continues to work in his favour. That was something they had


not counted on in the year past and in the year coming ahead, that if


oil prices remain low, that will be a big boost for India. Thank you for


now. Yogita will be tweeting and posting throughout the day.


Finance ministers from the world's leading economies met at the G20


Few concrete measures emerged from the meeting,


but policymakers agreed that ultra-low interest rates were not


enough to bring the global economy out of its slump.


Industrial production in Japan has risen for the first time in three


months, according to the latest government data.


Manufacturing output rose 3.7% in January,


but the statistics pointed to weakness in the Japanese retail


We have some news out of Germany. Speaking of retail, these are retail


sales figures coming out of Germany, helping grow expectations about how


the economy is going to do. It is Europe's largest economy and we have


seen exports slow, so there has been concern as to where the driver of


growth will come from. It is something we are seeing across the


Eurozone. In Germany, retail sales grew by 0.7% month on month in


January. We will discuss those issues later.


China's economy is back in the spotlight.


It expects to lay off millions of workers in the coal and steel


sectors to tackle massive industrial oversupply.


This comes as the G20 finance ministers and central bankers


promise to do more to revive the global economy -


Let's start with what is going on with China, and announcements that


we will see massive job cuts. It is a huge price to pay. It is a huge


price to pay. The numbers we saw today were the first time we got


specific numbers from China's government. It is reported that they


will lay off around 1.8 million workers in the coal and steel


sectors. There is no time frame for that, but that is as China tries to


cut back on oversupply in its industrial sectors. You talked about


the G20. The finance ministers met in Shanghai. They promise to do


more, when it comes to China, it was not a convincing cell for investors.


Today, Shanghai dropped nearly 3%. Earlier in the day, it hit a 15


month low, which is saying something for Shanghai. So while we did not


expect the G20 to boost markets, there was a distinct lack of any


detail that might have given some confidence about future growth.


Chinese bourses made a sour start to the week.


The lack of any real good news from the G20 meeting means we're


seeing more volatility, more investors looking to safer


So the traditional safe havens of gold and the yen are stronger.


This is how the week is opening up across Europe.


Let's hear from Michelle Fleury aout what will be making


It is a busy week ahead, even with fourth-quarter earnings


The campaigns are moving into high gear as the focus


of the US presidential election turns to Super Tuesday.


That is the day in the election cycle when Democrats and Republicans


hold the most primary votes on one day.


For economists, some more traditional


fare in the shape of the latest manufacturing data for February.


The strong dollar, low commodity prices


and weak demand continue to weigh on the sector.


And still hungry for another glimpse of the health of the US economy?


Well, you won't have to wait too long.


The other big economic report this week is this


The numbers are expected to show more hiring gains,


while the pace of hourly wage growth may slow slightly.


Joining us is James Hughes, Chief Market Analyst at the trading


The markets are going down. Your thoughts? We are not seeing anything


that positive this morning. Again, we are looking at what happened on


Friday. Although there were positive numbers on Friday, with GDP readings


that were OK, it is Asia yet again that is dragging us lower. We have


the same story, China off heavily. And when that happens, we get that


risk. Do you think there is disappointment that central bankers


did not come up with some corporate idea to boost the global economy?


The G20 is usually a very political thing, even when it is finance


ministers meeting. It all tends to be a lot of hot air. We always build


ourselves up and say we could see something, and then we are surprised


when nothing happens. That then drags the markets down a bit.


Speaking of more concrete things, we have data on the Eurozone coming out


in an hour. How important will that be as a signal for stimulus measures


we might see next month's the inflation figure is always key,


especially for the Eurozone, because we have all these measures being put


in by Mario Draghi which are not showing any signs of life. We want


to see growth moving back to positives. What is in place at the


moment is not working, so it looks like we will have to wait for yet


another meeting to pile more stimulus into the economy to see if


it works. James, we will see you later.


Still to come...Appy banking - managing your money


We ask the boss of a branchless-bank and ask is the technology trusted


enough to ditch the good old bank branch?


You're with Business Live from BBC News.


Let's look at a story that is ringing alarm bells this morning.


Almost a million jobs could be lost in Britain's retail sector by 2025.


Millions of us are buying online and some are steering clear of high


streets and that will have a major impact on retail jobs,


according to the British Retail consortium.


Tell us more about this story? There are a lot of people employed in the


retail sector in the UK, around 3 million. 70% of all spending in the


UK economy is on consumption. So shopping and retail really matters.


The British Retail Consortium, which represents the big supermarkets and


a lot of the shops we see on the British high street have put out a


warning that nearly 900,000 jobs could go over the next decade if


there is some sort of change to the current trend. As you were saying,


people are shopping online, which means they are not going into town


to buy their goods. That will affect the high street sales. But add in


the national living wage, the rebranded minimum wage, introduced


by Chancellor George Osborne last year. He will raise it to ?7.20 from


April. By 2020, it will be ?9 per hour. A lot of people that work in


the retail sector depend on the minimum wage. The PRC, the British


Retail Consortium, say London is already paying at least that -- the


PRC. But in more regional parts of the country, it will have a


devastating impact, especially in Wales and the north of England,


which depend on the national living wage. They cannot afford possibly to


pay the ?9 per hour which will be the government minimum by 2020. So


they say it will have a regional impact unless we look at how we do


things. But the trend towards online shopping is irreversible. The


question is, how do guys on the high street manage? Joke, thank you very


much. This is tied in with that story. It is a Morrisons tie-up with


Amazon to give it a firmer foothold in the grocery market. We know that


Amazon has designs on the UK market here. It will of course be a big


warning to the big online grocers. Amazon really does mean business. It


will be interesting to see what happens with the share price of the


supermarkets today. Their food delivery business at the moment is


called Amazon Pantry. I imagine the tie-up with Morrisons will be a


different offering. You're watching Business


Live, our top story - Arun Jaitley, unveiled


a populist budget to help He promised to spread the benefits


of growth among India's But will India's wider economy


and its business community benefit Now let's get the Inside Track


on the banking sector. After the financial crisis,


while many of the traditional lenders were busy rebuilding


their businesses, a new breed of so-called "challenger banks"


had started to emerge. Several of these newer start-ups


rely on technology as opposed to traditional "bricks-and-mortar"


branch networks. Mondo is one such business that aims


to change the way the public carries Assuming the business is authorized


and fully operational, it will have no branches,


Mondo will be an app-based bank But similar to traditional banks,


it will offer a current account So far the company has raised


?7 million, that's $8.8 million. Joining me is Tom Blomfield,


Chief Executive of Mondo. This is really a company in its


infancy in the sense it is not authorised yet, but you do have bank


cards. Tell us where you are at? We celebrated our first birthday last


month. We have built our systems, going through the authorisation


process, the UK regulators, one thing we wanted to do differently


was involve our customers in the development of the bank. We have had


life MasterCard is odd since November, we just had ?1 million


spent with our cards and today we are announcing a crowdfunding


campaign to let people invest in the bank. If you have the infrastructure


in the traditional way, what happens if a customer has problems? They use


their phone, they lose their cloud? What if they think there is fraud on


their account? What if they want advice? Modern technology allows you


to solve these problems seamlessly. If you lose your cloud, you can open


the alp and top to freeze your cloud. If you find it down the side


of the sofa, you can unfreeze it. Sometimes if you need to talk to


someone, there will be a phone line. What if you lose your phone? We


consider them the remote controls for our lives, but it is a rain


problem if you lose them and even more so if your financial


information and biking is done through one device? Worst case, you


have your phone and called a stolen at once, there are emergency phone


lines printed on the cloud, on the website. You can fold up and get it


shut down. The mobile presents an opportunity to take a leap forward


in terms of security. Every time I go abroad with my bank, by cloud


gets blocked. My phone is in my pocket so they know I am in New


York. What are they not more intelligent with that data? Current


accounts are provided, overdraft facilities, is that it? Yes, that is


it. We will not offer other products. You could not get a


mortgage. We think that is for the best. We have these mixed incentives


as a bike, you try to acquire customers very young and then they


have the concept of customer ownership, they try to sell your


product and it is rare that your bank is offering the best product.


Our bank is more like an app store. You can get the best choice from


across the market. You are appealing to the savvy customer, someone who


is very confident about the decisions they make. If you purchase


through choices at them about mortgage choices, they would be able


to make that decision without handholding. We are appealing to


customers who lived through their smartphones. We can present


information at the relevant time, in the right context, to enable people


to make their choices. Maybe there are two or three options and this


might be the best one for you. Lots of the bigger banks are in the


online space. They are offering this sort of service. What is it you are


offering that is different? Also, tied in with that, how do you manage


the data? If you are a big bag, you have the people and the


infrastructure in place to deal with major breaches of security, you will


not have that. I think tanks have websites and have apps, but they are


a way for the banks to deliver a statement in a low-cost way. It is


the same list of payments delivered on a smartphone. That is it. Really,


the service they provide has not changed in 30 or 40 years. They see


the mobile as a lower cost way to deliver your statement. Mobile


banking is broader than that. People don't care about their bank, they


care about their money. It is not just your current account, it is


your discount and loyalty data. It is your entire financial life. In


terms of security. We have talked about data breaches, but there is


the issue of your sustainability is the company to get your physician


you have got to have money on your balance sheet, you need big capital


base which other banks have. The authorisation process is robust, I


would say. For a good reason. Taking deposits and landing that money out


is a great responsibility that we take seriously. In terms of


security, data security and capital, that is something we have spent time


with regulators and we will have two raise up to ?20 million to dodge the


bag. We appreciate you coming in. -- launch later this year.


Let's look at what is being talked about on their website. We have the


German retail sales, but there is more about China and its news on the


1.8 million workers likely to be laid off in the coal and steel


industry come interesting given we are seeing a similar story in the


UK. We are seeing a lot of expectation here that the whole


European industry is going through death throes as a result of what is


called the dumping of steam, Chinese steel, on the market. It is being


set on the market at prices lower than it cost to produce. It shows


that we are having similar problems in China as well. That contraction


in the global market and the global slowdown is having a rain impact.


Consumers want and the banking, this is one viewer, it is just a matter


of time before all banks turn to this trend. Physical banks are


becoming outdated. In a moment, we will go through the business pages.


First, here is a reminder of how to stay in touch. The business live


page is where you can stay ahead of the braking business news. We will


keep you up-to-date with insight and analysis from the team of editors at


the BBC, right around the world. We want to hear from you. Get involved


on our web page. What other business stories has


the media been taking James Hughes, Chief Market Analyst


at the trading brokerage GKFX, Shall we start with the Wall street


journal? Missed the oil storage problems. The US have come up with a


solution. Empty railcars, sitting on railway tracks which will be filled


up with Wayne because no one is buying it. That is the issue. We


have a global glut of oil. Prices are at record lows and are not


looking to go anywhere else. The issue we have in the US is where


they are going to put it. The ingenious answer is these rain cars.


There are worries. There is potential collisions which we do not


often think about and leaky railcars and things like this. Interestingly,


there are a lot of people who own railcars who are going to the big


oil companies and saying, you have a lot of oil and nowhere to put it,


stick it in my car. If you have a spare place to store oil, get in


touch. We talked about the G2 at the meeting. Finance ministers and


central bankers there. Mervyn King, former governor of the Bank of


England, he is talking about his thoughts, coincidentally he has a


book out, he says the Eurozone is doomed. Do you agree? I have bashed


the Eurozone for quite a long time. I do not necessarily agree it is


doomed, but it does not look rosy. What Mervyn King says is right. He


says that the only way for a of these countries, like Greece and


Cyprus, countries who really struggled to get back to solvency


and growth is to leave the Eurozone and come back to it. He talks about


a relegation system where you can get relegated from the Eurozone and


you are financially stable again and then get promoted back into it.


There are a lot of countries who still want to get into the Eurozone


and use the single currency. We have been talking about the rebirth of


the gas guzzler since oil prices started to sink. You go from years


and years of electric cars to, because when prices are so low, we


go back to regular cars. Thank you so much.


There will be more business news throughout the day on the BBC Live


webpage and on World Business Report.


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