:00:00. > :00:18.News. Now for the latest financial news with Sally and World Business
:00:19. > :00:21.Report. Bitter medicine to cure a sick economy ` India awaits the
:00:22. > :00:29.first Budget from its new government. Day of action ` over a
:00:30. > :00:36.million UK public sector workers walk out in a battle with the
:00:37. > :00:46.government over austerity. Welcome to World Business Report. I'm Sally
:00:47. > :00:48.Bundock. Also in the programme: Chinese trade recovers, but the
:00:49. > :00:52.numbers disappoint. We'll bring you the details. But first: "Bitter
:00:53. > :00:55.medicine". That is what India's Prime Minister Narendra Modi has
:00:56. > :00:59.warned his country needs to get its economy back on track. He swept to
:01:00. > :01:02.power back in May with promises of reform. Today we find out what that
:01:03. > :01:05.medicine might be, with his government's first Budget. Here is
:01:06. > :01:11.what he is up against. The most obvious problem is weak economic
:01:12. > :01:15.growth. India's economy grew just 4.7% in the year to April. That is
:01:16. > :01:18.around the weakest in a decade, and about half what is needed to create
:01:19. > :01:20.jobs for the young and growing population. It is estimated a
:01:21. > :01:27.million new people enter India's Labour market each month. Then there
:01:28. > :01:30.is the problem of inflation. Consumer prices were up almost 10%
:01:31. > :01:33.last year, driven by food prices, and that hits ordinary Indians hard.
:01:34. > :01:43.They rely on government subsidies to fuel, food and fertilizer. But that
:01:44. > :01:45.is crippling the government's finances. Ratings agencies have
:01:46. > :01:49.warned they might cut India's credit rating if it doesn't rein in its
:01:50. > :02:07.finances. Balancing all this will be the challenge today. Yogita Limaye
:02:08. > :02:13.is in Delhi for us. Tell us what is expected from this Budget. Will
:02:14. > :02:17.sally, let me just show you where that document was actually made.
:02:18. > :02:20.That will bring behind me houses the finance ministry. I have been told
:02:21. > :02:25.that finance ministry officials have been locked in there for days trying
:02:26. > :02:28.to create this document, which is much anticipated here in India, and
:02:29. > :02:32.the Finance Minister has literally just let that building to go to
:02:33. > :02:36.India's Parliament to deliver that speech which will happen in about an
:02:37. > :02:40.hour from now. To your question, what is expected, as you pointed
:02:41. > :02:46.out, India's finances have not been in order for quite awhile now. Need
:02:47. > :02:50.to increase revenues or decrease spending. A large part of that goes
:02:51. > :02:57.to subsidies, particularly fuel subsidies, where India spends as
:02:58. > :03:01.much a $20 billion. The government won with a massive majority, meaning
:03:02. > :03:04.they will face perhaps less political opposition even if they
:03:05. > :03:08.have to take some unpopular decisions. What most analysts expect
:03:09. > :03:11.is that we might see some cuts in those fuel subsidies. As we have
:03:12. > :03:18.said, it is a new government, people are hoping for fresh ideas. How
:03:19. > :03:24.optimistic are Indian people that today's Budget will be one of the
:03:25. > :03:27.key answers to its problems? Well all of the businesses that we have
:03:28. > :03:31.been speaking to over the past few weeks seem very optimistic. What
:03:32. > :03:36.they want and what they are expecting to see in this Budget is
:03:37. > :03:39.that there will be some plan to make doing business in India easier.
:03:40. > :03:46.Prime among those, they are expecting a roadmap for a goods and
:03:47. > :03:50.services tax, simply put, that is simply one single tax across India.
:03:51. > :03:54.Currently, depending on where you operate your business, there are
:03:55. > :03:56.several layers of taxation, and it is difficult and cumbersome for
:03:57. > :04:00.companies to comply with all of them. Companies want to see a
:04:01. > :04:07.roadmap for a single tax across India. As far as ordinary people are
:04:08. > :04:09.concerned, there has not been good news. Food prices have spiralled.
:04:10. > :04:13.The monsoon forecast is below normal, it is expected to hit
:04:14. > :04:18.reduction, and again, if fuel subsidies are cut, things will
:04:19. > :04:22.become more expensive. We will talk to you later today as that news
:04:23. > :04:27.starts to break. A very important day for the Indian economy. Focusing
:04:28. > :04:30.on the UK, more than a million public sector workers here in the UK
:04:31. > :04:33.go on strike today, in a dispute with the government over pay,
:04:34. > :04:34.pensions and working conditions. Local government employees, from
:04:35. > :04:37.refuse collectors to librarians, will be joined by teachers,
:04:38. > :04:40.firefighters and civil servants, in what they are calling a "day of
:04:41. > :04:48.action". We'll be talking to an expert in a moment, but first this
:04:49. > :04:50.report from John Moylan. The Graham family in Northumberland believe the
:04:51. > :04:54.government has dealt them a bad hand. As a teaching assistant,
:04:55. > :05:03.Sharon's pay has risen by just 1% in four years. So she has to hold down
:05:04. > :05:06.two other jobs to get by. Where I work, 75 to 80% of teachers'
:05:07. > :05:19.assistants work two jobs. It is not just me, there is lots of us have
:05:20. > :05:21.multiple jobs. We are all struggling to get by. Like Sharon, 1.4 million
:05:22. > :05:24.local government workers have endured a three`year pay freeze,
:05:25. > :05:28.followed by a below`inflation 1% pay rise in 2013. It is the prospect of
:05:29. > :05:30.another 1% rise this year which led unions to ballot for industrial
:05:31. > :05:33.action. Pay rates in local authorities have got so bad that in
:05:34. > :05:36.October, the national minimum wage overtook the council pay rate, you
:05:37. > :05:39.can't legally pay any less than councils pay their staff, which is
:05:40. > :05:42.appalling when you think of the front`line service jobs that those
:05:43. > :05:44.people do in our communities everyday. Tomorrow, council workers
:05:45. > :05:46.will be joined by teachers, civil servants, and firefighters, in the
:05:47. > :05:49.largest co`ordinated strike since the public`sector pensions dispute
:05:50. > :06:01.three years ago. But it has been condemned by the government. I think
:06:02. > :06:05.they are wrong and damaging, because they will affect services and affect
:06:06. > :06:08.people who have nothing to do with the dispute whatsoever. I also think
:06:09. > :06:11.they are wrong because some of them are based on ballots which took
:06:12. > :06:26.place two years ago, with a small percentage of people actually voting
:06:27. > :06:34.for strike action. The government says pay restraint helps families by
:06:35. > :06:37.protecting jobs, services, and repairing the public finances. So
:06:38. > :06:42.the Grahams are unlikely to get a boost to their household income any
:06:43. > :06:47.time soon. Professor John Ryan is from the Von Hugel Institute at the
:06:48. > :06:52.University of Cambridge. Thank you for coming in. Good morning. We
:06:53. > :06:57.heard the challenges many are facing. And Chancellor Osborne seems
:06:58. > :07:01.to be quite set on his goal to reduce our borrowing has an economy,
:07:02. > :07:06.but trade unions are also very determined. How will this play out?
:07:07. > :07:10.At the moment Chancellor Osborne has not in successful in looking after
:07:11. > :07:14.the finances of the country, the national debt is going up, and
:07:15. > :07:19.posterity, as far as the people striking today, in this one`day
:07:20. > :07:24.strike, feel that they are being targeted in this process. So there
:07:25. > :07:27.are quite a lot of people either living on subsistence wages,
:07:28. > :07:32.low`paid workers, as we saw from the peace earlier. They are actually
:07:33. > :07:36.struggling in this economy, which supposedly is doing well. How do we
:07:37. > :07:48.resolve this then, from your point of view? Because as you say, public
:07:49. > :07:52.finances are in a pretty ports done a poor state. How does this get
:07:53. > :07:57.resolved? It will get resolved over a period of time, and when another
:07:58. > :08:01.period of crisis hit in the next few years, there is quite a lot of
:08:02. > :08:07.public sector workers out there. There are lots of debts. And maybe
:08:08. > :08:12.there is a point of putting a marker down today for the employment rights
:08:13. > :08:17.of the people that are in work. Because in the future, I think that
:08:18. > :08:23.those public sector workers will be targeted for redundancies. We have
:08:24. > :08:26.seen very similar strike is happening in Europe recently for the
:08:27. > :08:32.same kinds of reasons. Greece yesterday had a 24`hour walkout of
:08:33. > :08:37.workers. Are they being affected, these days of action? `` being
:08:38. > :08:41.effective? They are not doing well at all because of the circumstances
:08:42. > :08:47.of the eurozone crisis. Countries like Germany tend to work, and there
:08:48. > :08:51.is a negotiated settlement at some stage of the process. It is very ad
:08:52. > :08:56.hoc. Countries doing well like Germany, there is resolution. Quite
:08:57. > :08:59.a lot of countries in Europe at the moment are going through a more
:09:00. > :09:03.advanced process of dealing with these Budget deficits. And it is
:09:04. > :09:10.also an insider outsider debate, people in work are trying to protect
:09:11. > :09:15.their jobs, people outside are trying to get more employment
:09:16. > :09:20.protection. The plot will thicken, no doubt. Thank you for your time
:09:21. > :09:25.this morning. We will keep across that story as the date progresses.
:09:26. > :09:29.Turning our attention to the world's second`biggest economy.
:09:30. > :09:31.Trade in and out of China has continued to recover in June,
:09:32. > :09:34.according to official data out in the last few hours. But the figures
:09:35. > :09:39.have disappointed the markets. Let's get the latest. Rico Hizon is
:09:40. > :09:46.following this for us in Singapore. Lovely to see you. Make sense of
:09:47. > :09:51.this latest news out of China. Asian investors are not excited at all
:09:52. > :09:55.about the numbers. Exports rising 7.2% from a year ago, the low market
:09:56. > :10:00.expectations of more than 10%. Imports also missed for cuts, rising
:10:01. > :10:03.by about 5% due to sluggish domestic demand. When you speak to
:10:04. > :10:08.economists, Sally, they say unless more stimulus measures as taken by
:10:09. > :10:14.the government, they doubt China will be able to achieve its growth
:10:15. > :10:19.target of 7.5 cent in 2014. Together with weak inflation reports,
:10:20. > :10:24.analysts believe domestic demand remained weak. `` seven .5%.
:10:25. > :10:27.China's exports were sluggish this year, but its trade performance has
:10:28. > :10:31.gained some traction in recent months, helped along by the
:10:32. > :10:35.improving US economy. The government gave exporters more tax breaks.
:10:36. > :10:39.Credit insurance and currency trading options. Imports have also
:10:40. > :10:43.been weak, highlighting sluggish domestic demand. But activity data
:10:44. > :10:50.and June surveys on productivity have spurred some hope that the
:10:51. > :10:54.economy is indeed steady. So the markets and investors are still
:10:55. > :11:01.hoping for more stimulus initiatives in the second half of the year.
:11:02. > :11:06.Sally. Thank you. How let's talk you through some of our business
:11:07. > :11:09.stories: French bank BNP Paribas has pleaded guilty to a charge of
:11:10. > :11:11.conspiracy, as part of a $9 billion settlement with the US Department of
:11:12. > :11:14.Justice for violating sanctions against Sudan, Cuba and Iran. BNP
:11:15. > :11:17.Paribas has also admitted filing false business records and agreed to
:11:18. > :11:29.a temporary ban trading in US dollars. As ever, the markets are
:11:30. > :11:35.very focused on any news out of China, as Ricoh his unmentioned. As
:11:36. > :11:40.you can see, a very mixed picture. We saw a real bounce back in the US
:11:41. > :11:49.after two days of declines. Earnings beat expectations, and Alcoa's
:11:50. > :11:51.shares went up to their highest in two years. A good start to the
:11:52. > :12:08.season in the US. Hello again. As we mentioned
:12:09. > :12:12.earlier, a survey of senior health and social care staff has found that
:12:13. > :12:15.nearly half of them thought it was either "very" or "quite unlikely"
:12:16. > :12:18.the NHS in England would still be free in ten years' time. The poll
:12:19. > :12:19.also predicted a funding crisis in the