India Business Law Journal – February 2024

Overclocked!

Do lawyers need to reassess their fondness for working long hours?

The inaugural 1919 International Labour Organisation (ILO) Convention set a precedent by limiting work hours, ensuring rest periods. Today, the regulation of working time is fundamental in labour legislation. Current ILO standards establish regulated work hours, rest intervals and annual holidays, prioritising worker well-being alongside productivity. Work standards play a pivotal role in job creation and gender equality.

With this in mind, our Cover story explores the various aspects of a proposed 70-hour workweek by Narayan Murthy, the founder of multinational IT company Infosys. The comments ignited a sharp debate, and the legal fraternity in India was not too far behind. While Murthy argued for increased global competitiveness, a People Matters survey underscored widespread disagreement, with 84% of respondents opposed to the idea.

Legal professionals who are already grappling with demanding workloads highlight the need for balance in the profession. The debate further extends to issues such as productivity, with varying views on the correlation between long hours and success.

Experts from various legal domains give their views, and many emphasised the need for a more humane approach, fostering mentorship, and advocating for a balance between work and personal well-being.

Our Spotlight this issue falls on the interim budget 2024, as the team from Lakshmikumaran and Sridharan contribute with their analysis.

Despite the upcoming Lok Sabha elections, it was interesting to note that there were no populist measures introduced, and rates for direct and indirect taxes remained unchanged. The interim budget primarily seems to have set the stage for a more comprehensive fiscal year budget after the elections.

The budget’s interim nature implies minimal tax changes, with a comprehensive fiscal year budget scheduled post-elections. Tax benefits for startups and investments by sovereign wealth or pension funds were extended until 31 March 2025.

Regarding indirect tax proposals, the Budget retained existing customs rates for FY2024-25. A significant amendment was proposed to make the Input Service Distributor (ISD) mechanism mandatory under the Central Goods & Service Tax Act, with distribution of credit becoming obligatory.

Moving to a broader Asian landscape, predictions for 2024 are contained in our Intelligence report, titled Looking forward to 2024, which explores how Asia’s economic landscape is set to take centre stage amid global geopolitical tensions. China has been facing economic challenges, and attention is shifting to other regional powers such as India and Indonesia.

Political shifts, including key elections in India and Pakistan, further shape the subcontinent’s economic outlook. China’s economic concerns are exacerbated by a troubled property sector.

Meanwhile Japan, despite internal challenges, continues to be an attractive investment destination. Key drivers like technology, AI and cryptocurrencies are influencing legal landscapes and creating new challenges.

AI has been the buzzword for almost a year now. The expanding prowess of AI in governance and businesses calls for careful consideration, and essential to navigate legal and ethical challenges. Our Vantage point by Smita Rajmohan emphasises the need for a strategic risk management framework to ensure “responsible” AI adoption.

AI can be a double-edged sword, which is why the article stresses the early assessment of data used for AI training, addressing legal aspects such as data ownership and compliance with regulations like India’s Digital Data Protection Act, or the EU’s GDPR.

IP concerns, especially in generative AI, are highlighted, urging companies to avoid copyright infringement and potential leakage of confidential information. The article underscores the risks associated with bias in AI algorithms, which further emphasises transparency, ethics and a global risk-based approach to AI governance.

In this year’s Deals of the year, we highlight 50 standout deals and disputes of 2023, reflecting the dynamism of India’s corporate landscape. Notable transactions included Lenskart’s major funding round, Larsen & Toubro’s share buyback, and ideaForge Technology’s successful IPO.

Despite a deceleration in startup unicorns, the market witnessed diverse financing activities such as qualified institutional placements and green energy investments. Significant insolvency resolutions and legal rulings on third-party funding and patent disputes added depth to the year’s transactional landscape.

The selection process involved comprehensive research and consultation by the IBLJ research team, emphasising the deals’ legal and regulatory impact alongside their size and complexity. Additionally, smaller yet impactful deals have underscored corporate efforts towards environmental sustainability.