Providing maximum governance with minimum government may sound too good to be true
Yet as the recent Indian election has shown, a bold vision combined with the right amount of determination and drive can produce spectacular results. The new government brings with it much needed vision and energy, and there are signs that it will achieve maximum governance with less government than India and Indians have experienced in the past few years. Whether this will require more than the 45 ministers who were sworn in with Prime Minister Narendra Modi is to be seen.
Either way, for India Inc, every step taken by the new government to dismantle bureaucratic and regulatory roadblocks may appear too good to be true. Expectations have been raised and it is only right that investors and the country at large look forward to better days.
Post-election reactions from leading corporate lawyers in India, both in private practice and in-house, indicate there is little doubt that the Modi government will deliver (Modi’s landslide). “We are on the cusp of a golden era,” says Berjis Desai, the senior partner at J Sagar Associates, who believes Modi could make India a superpower. “I believe Modi will bring about a paradigm shift in the way things are conceptualized and executed,” says Mysore Prasanna, a former group general counsel at Aditya Birla Group.
Clearly the government will need to manage expectations for, as Rajiv Luthra, the managing partner of Luthra & Luthra, says: “many people expect a miracle to happen overnight but fail to see that deep structural changes are required in the economy and polity to make lasting change a reality”. Reflecting the sense of urgency in the country while also stating that she is not expecting “a magic wand”, Zia Mody, the managing partner of AZB & Partners, says the new government has to “take many quick steps, even if they are not giant leaps”.
Emblematic of the structural problems that will need to be tackled is a cocktail of conditions that has allowed companies to take on more debt than they can manage. Mohit Saraf, a senior partner at Luthra & Luthra, believes this is a case of “indiscriminate lending by banks and indiscriminate borrowing by corporates”, and that it reflects “a complete lack of discipline”. Be that as it may, as we detail in Desperate measures, companies have been divesting assets, and doing so in troubled times comes with particular challenges.
In An uphill struggle? we shine the spotlight on the sale of National Bulk Handling Corporation, which took place even as its parent company, Financial Technologies (India), and the founder of the parent, Jignesh Shah, faced investigation for alleged fraud. The sale was concluded just days before Shah was arrested, making it “anything but the standard M&A”, according to William Vivian John, a partner at Luthra & Luthra, who advised the acquirer.
Writing in this month’s Vantage point Kapil Chaudhary, counsel for IBM’s Services Integration Hub (East), poses several questions to help in-house counsel evaluate whether they are fulfilling their role as business leaders. He asks, for instance, if they are ready to face the era of big data. With big data and analytics becoming the “new normal”, Chaudhary says a key differentiator of an in-house team’s performance will be the extent to which it can help clients organize and analyse such data.
This month’s Intelligence report presents India Business Law Journal’s eighth annual survey of the top international law ﬁrms for India-related work. Our coverage reveals the top 10 foreign ﬁrms for India work, as well as 10 key players and 18 signiﬁcant players. We also highlight 16 regional and specialist law ﬁrms, and 46 “ﬁrms to watch”, ones that we believe in-house counsel should keep well within their sights.
This issue of India Business Law Journal marks the start of our eighth year of publication. Our ﬁrst issue was published in June 2007, a time when there was a heightened buzz about India and much optimism that the economy was poised for a dramatic take-off. Speaking on NDTV while on a visit to India at the time, Jeff Immelt, the CEO of General Electric, even predicted that “the power of the markets is what will finally bust through bureaucracy to take India [forward]”.
2007 was also a time when foreign law firms were gearing up in anticipation of being granted entry to the Indian market. Many were establishing India practice groups overseas, ready to be parachuted into the country the moment regulations permitted such a move. “If India opened and allowed foreign firms to freely open offices, we would feel pressure to do so,” Anthony Root, then head of the Asia practice at Milbank, told India Business Law Journal at the time.
“We would certainly give serious consideration to having our own presence in India,” added Stephen Finch, who was then the chairman of Salans. The firm has since morphed into Dentons.
Seven years on from those heady pre-financial crisis days, and foreign law firms appear no closer to opening their doors in India. In the interim period, India Business Law Journal has documented and analysed the development of the country’s laws, regulations and legal market, while striving to bring clarity to the many areas of confusion and ambiguity.
As we mark our latest anniversary, we would like to thank our readers, our contributors, our advertisers, our correspondent law firms and our editorial board members. We look forward to continuing to serve you in what look set to be interesting years ahead.