Industry bodies have given a thumbs-up to Cabinet’s decision to clear a new law that allows shops, restaurants, movie theatres and similar establishments to remain operational 24 hours a day. The Model Shops and Establishment Act also aims to increase ease of doing business in the country by allowing establishments to adopt their own flexible but uniform working styles and working hours without compromising the labour welfare measures, according to Khaitan & Co, a law firm that played a crucial part in drafting the law with government bodies.
The ball is in states’court now
Though the Cabinet has give the law a go-ahead, industry bodies say the onus of its implementation lies with states.
“The Cabinet has considered and given its nod to the bill, however, the baton now moves to various state governments for adoption in the manner they deem advisable for their respective states… It would be relevant to see how state governments take this forward to ensure that the new policies are well implemented,” said Sharad Abhyankar, Partner at Khaitan & Co.
“The Cabinet approval is a welcome move and we are hopeful that the state and local authorities would co-operate and adopt this model. NRAI will continue to lobby with the states to implement the act with minor changes across locations,” said Riyaaz Amlani, President, National Restaurant Association of India (NRAI).
“The Model Shops & Establishments Act cleared by the government is another step in supporting consumer freedom. Given that many urban consumers work long hours and late nights in the service sector, this move will be consumer friendly,” said Alagu Balaraman, Managing Director, India Operations at advisory services provider CGN and Associates.
Global hypermarket chain Walmart said twenty-four hour operation policy for retail stores in developed economies has given boost to their growth in the past.
“With flexibility available to retailers to open their establishment 24×7, not only add thousands of additional skill jobs will be added, but it will also make the retail markets across the country very vibrant,” said Krish Iyer, President & CEO Walmart India.
Business Thrust
Experts say that the operational flexibility that the law brings in will be beneficial for the consumption industry.
“We are likely to see more businesses flourishing with the flexibility in hours and better work facilities for employees as well. The changes suggested in the bill will certainly benefit industries across the board more particularly businesses in the retail and hospitality space,” Abhyankar said.
Anshuman Magazine, Chairman and Managing Director of CBRE South Asia, a commercial realty firms said that the move will translate into growth for e-commerce, organised retail, and the overall services industry. “The act is expected to bring the online and offline retailers onto a level playing field and boost employment opportunities. Overall, the retail sector in India stands to benefit from this announcement including higher footfalls and consumption. In the long-term this could positively impact the warehousing and logistics segment,” Magazine said.
Ice-cream player Vadilal Industries says it is a win-win situation for consumers and the economy. “Customers can have comfort of buying material at any point of time from shops and mall, rush at malls can be avoided and it will ease operations. It is a welcome move that the government has focused on safety and security of employees and customers, particularly women during night hours,” Rajesh Gandhi, Chairman and Managing Director, Vadilal Industries said.
Tourism Boost and Night life
Though hospitality players welcomed the move the sector has had mixed reactions to the nitty-gritties of the law such as night life, manpower and safety.
“It’s a bold move because it will attract a lot of tourists to the country. But we will have to wait and watch, because the government has left the final decision to the states, though I’m sure Delhi, being the Capital, will enforce it. And the major issue would be manpower,” said Joy Singh, Co-partner Raasta, a Delhi-based lounge bar.
“If a marketplace runs 24×7, the safety will surely improve with the inflow and outflow of people. Numbers are always a good thing,” said Arjun Sagar Gupta, owner of Delhi-based jazz club The Piano Man.
Round-the-clock operations entail additional overheads for companies such as additional manpower, utlity bills. Some companies in the quick-service restaurants are assessing such expenses. “This is a welcome development, as it will provide a definite boost to industry and the economy. We will definitely evaluate its implications, basis various factors such as trade area and our business policies,” said Rahul Shinde, Managing Director, KFC India.
“Retailers will need to realign their internal operations in terms of stocking, inventory management and housekeeping to ensure a quality consumer experience,” Balaraman said.
