Some provisions in the law may be amended or dispensed with.
The year seems to be action-packed for the retail industry. Not only on growth side, but on the policy side, too. After reconsidering its stand on foreign investment in multi-brand retail, the Centre has now started work on reviewing the Shops and Establishments Act.
The Planning Commission has taken note of the long-pending demands of the industry on some of the existing provisions in the law that need to be amended or dispensed with. The plan panel has sought comments from industry players before finalising its recommendations for a model law. Every state has its own Shops and Establishments Act, governed by municipal corporations.
If state governments act on the suggestions, industry players said the overall environment could turn more investor-friendly, as many of the rules and regulations were outdated.
The Shop and Establishments Act regulates shops, retail stores and other commercial establishments like residential hotels, restaurants and theatres. The law was meant to safeguard the interests of those working primarily in the unorganised sector by ensuring that employers provided comfortable working conditions.
Among other things, the law regulates the working hours of employees, number of days the establishment should remain closed, weekly off and how much overtime work employees are permitted to do.
For starters, the industry wants that the law allow them to keep their establishments open on all 365 days of the year and they should be treated on a par with the services sector, subject to employers complying with certain basic provisions of the Act.
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Industry players said time limits on opening and closing hours for stores led to wastage of perishable items like fruits and vegetables. For instance, Sections 10 and 11 of the Act restrict open hours of shops from 5 am to 8.30 pm. The industry feels stores should be allowed to open 24x7, since such restrictions lead to heavy wastage of fruits and vegetables.
An official associated with the proposed model law said working hours and days could be among the clauses the government might look to amend in the Shops and Establishment Act. The retail industry was demanding shops should be permitted to operate for 24 hours a day, subject to employers’ compliance with certain basic provisions of the law, particularly dealing with health, working hours and safety, an industry player said.
A retailer said on condition of anonymity that 50-55 approvals or licences are required from various government agencies to set up a new retail store in the country. “We have asked for single-window clearance for the establishment and management of retail stores,” he further added.
In addition, the industry has proposed online registration of shops and granting online certification to avoid corruption and expedite the process of registration of shops and establishments.