Coming really soon – 24×7 Malls and Theatres
New Delhi / Source: ET Bureau | 26 Oct, 2015, 02.05 PM IST / Red Newswire
The government wants to let shops stay open as long as they want — just like their online counterparts. The government is proposing that states scrap rules mandating store closures and replace them with a model law that it’s preparing, allowing restaurants, malls, theatres and local markets to remain open round the clock.
Such a change will level the playing field between online and offline besides cutting down on restrictions, thus improving the ease of doing business, a stated aim of theNarendra Modi government.
Under existing state laws, shops are required to remain closed on a specified day depending on traditional practices.
Also, there is no provision for shops to remain open round the clock, so malls andrestaurants close at midnight and local markets even earlier generally. Beyond that, malls only stay open to let moviegoers exit after the last show.
India’s retail industry is growing at 15 per cent and expected to touch $1 trillion by 2020 from $600 billion now. Modern retail, comprising ecommerce and brick and mortar, is expected to more than double its share of the overall market to 20 per cent from 8 per cent in the next five years.
Online retail is still a small part of this but is rising rapidly, pegged to reach $60-70 billion by 2019 from $17 billion in 2014, according to a report by Boston Consulting Group and the Retailers Association of India that was issued in February. Meanwhile, India’s leading ecommerce companies such as Flipkart and Snapdeal have been raising funds and spending heavily to win customers, as has Amazon India, which may even exceed the $2 billion investment in local operatons that CEO Jeff Bezos had pledged last year. Amazon’s India business has quadrupled this year.
Experts said the changes being proposed by the Centre would give a big push to the retail sector, putting it on a stronger footing against the online challenge.
“The retailers want to run shops 24×7 and this kind of flexibility will help them get more business. Besides, consumers, especially working couples, will get increased access to shopping even at night,” said BP Panty, advisor to the Federation of Indian Chambers of Commerce and Industry ( Ficci). This has been a longstanding industry demand, said Kumar Rajgopalan, CEO of the Retailers Association of India, welcoming the move.
“A central guiding law with no mandate on timing will be of immense use to retailers and would help create more employment besides addressing the needs of consumers,” he said.
Every state has its own version of the shops and establishment law that governs working hours for shop and commercial establishments and deals with licences for their operation. The draft also seeks to abolish provisions that require the annual revision of licences or regulation of working hours.
“This new law would serve as a model law for all states,” the official, who did not wish to be named, told ET. Although it won’t be binding, the central government hopes rising competition among states on improving ease of doing business will encourage those eager for investment to adopt the new regime, putting pressure on others to follow.
Businesses will have to introduce shifts to ensure that employees work for a fixed number of hours, the official said. They will be entitled to weekly holidays besides all existing leave and other perks. Shop owners will only have to file annual returns under the model law and there won’t be any need to renew licences every year, the official said.
The labour ministry will begin tripartite consultations with state governments, trade unions and businesses once it finalises the draft, the official said, adding that it will then be taken to the cabinet.
ET View: Rules for the 24×7 economy
This change is overdue. The modern economy works round the clock, and not necessarily the business process outsourcing segment alone. Laws and rules must not hinder its working. While it is necessary to regulate working hours to make sure that labour is not overworked, it is not necessary to shut down the workplace to do that. It is a matter of employing workers to run different shifts. The point is to have sensible labour norms and enforce them, not to throttle work in the name of protecting labour.