Model Shops and Establishments Bill May Prove To Be a Boon For Retail Sector

Model Shops and Establishments Bill May Prove To Be a Boon For Retail Sector

Model Shops and Establishments Bill May Prove To Be a Boon For Retail Sector

The central government recently announced its decision to introduce the Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill 2016. This is a bold step that would generate more employment, especially in the real estate sector. The major stakeholders of the real estate sector, like mall developers, property consultants and retailers think that the model Bill is a good policy move.

In modern day offices, work hours are not restricted to an eight-hour daytime shift. India is more globalised than ever, and more white-collar employees are working night shifts. Shopping has always been difficult for employees in the IT/ITeS sectors, because most shops close by 9:30 pm.

The model Bill may allow you to visit the nearby mall without thinking about the time in the day. Shopping in malls will become more pleasant when you can walk in even after midnight.

Recently, malls in India have been doing well. The malls that are struggling are either located in bad localities or poorly planned. The retail industry may benefit the most from the move to allow shops to be open throughout the year. Customers may have access to malls, movie theatres, restaurants and other retail establishments throughout the year. The operation of such enterprises is currently limited during Diwali and Christmas.

What are the upsides of the Bill?

  • In metropolises like New Delhi and Mumbai, retailers, employees and shoppers alike may benefit from the policy proposals in the model Bill.
  • Flexible work hours will improve footfall in malls and other retail outlets.
  • Stores located in malls may find more customers.
  • Malls that are running at a loss may benefit from the model Bill.
  • As many modern day employees work late in the night, or in night shifts, the provisions in the model Bill may allow them to shop at their convenience.
  • Late night shows in multiplexes in malls are run between 9:30 and 10.30 pm. So, customers would be able to visit malls at their convenience.
  • Customers usually do not turn up at 9 am or 10 am; so retailers tend to support the model Bill. The extra hours will allow them to do more business.
  • This is also likely to increase tax revenues of the government.
  • The provisions in the model Bill may generate more employment, allowing more women to be part of the workforce.
  • This may generate more revenue for retailers as well as developers.

Retailers need not seek many permissions

Retailers are forced to approach urban local bodies and various departments of the state government to receive approvals for running their business. Some Indian states grant permissions more easily. Some states grant permission automatically while others insist on renewing the permissions after three to five years. State and local bodies often interpret laws differently. The model Bill may simplify the process. There will be more standardisation.

Main provisions of the Bill include

  • Freedom to operate 365 days a year
  • Protection for women employees working on night shifts
  • No discrimination in transfers and promotions
  • Five paid festival holidays for employees, apart from national holidays

Who will benefit the most from the Bill?

Retail companies are weighing their options more carefully. However, shops/stores at airports and near BPOs/KPOs may benefit the most from the Bill. These are areas where customers are available throughout the night. More outlets will operate round the clock in such areas.

However, the Bill is only the first step in making it easy to do business, because it covers only certain aspects of the retail business. The legal framework should look at retailing as a major force in India's economic growth. We need a more detailed retail policy to deal with all the bottlenecks that exist.

Last Updated: Tue Aug 02 2016

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