Four more states may adopt model law allowing shops to stay open 24×7

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Mumbai: At least four more states may adopt the model law cleared by the centre on Wednesday that allows malls, cinemas and other establishments to stay open round the clock, said an official at the Retailers Association of India (RAI).

The Model Shops and Establishments Act 2016 allows states to come up with their own specific retail policies similar to those announced by Maharashtra, Karnataka and Tamil Nadu in the last six months.

“Telangana and Uttar Pradesh are working with us and will come out with their retail policies in the next two months,” said Kumar Rajgopalan, chief executive officer, RAI, the members of which include some of India’s largest retailers like the Future Group, Reliance Industries Ltd’s retail arm and Wal-Mart Stores Inc.’s India subsidiary.

Rajgopalan said Rajasthan and Gujarat are likely to follow suit soon.

The Act approved by the cabinet on Wednesday allows malls, shops, restaurants, banks and cinemas to operate 24 hours a day, effectively boosting employment generation.

Model laws, which are not legally binding, lay down policy guidelines that can be adopted by state governments either in the form approved by the centre or with changes.

All shops and establishments not covered by the Factories Act will come under the purview of this model law but it will not be a mandatory provision for the country as a whole. Units employing 10 or more workers are proposed to be brought under this Act.

Andhra Pradesh was the first state to come out with its own retail policy in January this year, followed by Maharashtra in February and Karnataka in June.

The Andhra Pradesh retail policy allows stores and retail establishments to remain open 365 days a year and operate between 6am and 11pm. It provides for a single window clearance and simplification of processes. It also has provided for infrastructure support, warehousing and distribution with the aim of attracting new investments worth Rs.5,000 crore into the sector by 2020 and creating 20,000 additional employment opportunities in the sector by 2020.

Likewise, the Maharashtra retail policy also facilitates a single window clearance and relaxes the rules for working hours and shifts, enabling retail establishments to stay open 365 days with women employees being allowed to work till 10pm. It also provides for zones for retail in development plans.

The main features of the model Act:

• It will cover only establishments employing 10 or more workers except manufacturing units.

• It provides for freedom to operate 365 days in a year and opening/closing time of establishment.

• Women to be permitted during night shift, if the provision of shelter, rest rooms, ladies toilets, adequate protection of their dignity and transportation, etc., exists.

• No discrimination against women in the matter of recruitment, training, transfer or promotions.

• One common online registration through a simplified procedure.

• Powers of government to make rules regarding adequate measures to be taken by the employer for the safety and health of workers.

• Clean and safe drinking water.

• Lavatory, crèche, first aid and canteen by group of establishments, in case, it is not possible due to constraint in space or otherwise by individual establishment.

• Five paid festival holidays in addition to national holidays, etc.

Retailers have welcomed the Act.

“Model Shop & Establishment Act by the central government is a welcome step and we hope all the states will adopt it. Flexibility available to retailers to open their establishments 24×7, not only adds thousands of additional skill jobs, but it will also make the retail markets across the country very vibrant giving customers flexibility and convenience to shop anytime,” said Krish Iyer, president and chief executive officer, Wal-Mart India.

“However, it will be a while before we see these policies come into effect even in states which have implemented the retail policy as they have to start changing various acts. The retail policy impacts labour, agriculture and many other acts,” said Rajgopalan of RAI. He added that it’s a gradual process which will take three to four years for the objectives—increased customer convenience, employment and retail revenues—to be achieved.