Model Shop & Establishment Act gets all-clear

The Cabinet on Wednesday approved the Model Shop & Establishment Act, which enables states to choose to keep shops and other such establishments open 24x7 all through the year. The move, which is likely to prove highly beneficial for restaurants, malls, movie theatres and other entertainment entities, among others will also help bring incremental tax income into the goverment's kitty and generate employment, says Kumar Rajagopalan of Retailer Association of India. However, it now remains to be seen how states work around the hurdles that might arise in terms of maintaining law and order and such other issues, Rajagopalan says."Its a win-win situation for all the parties involved," he says, referring to companies, government and consumers. 
Lalit Agarwal, CMD of V-Mart and Rajesh Mohta, CFO of Speciality Restaurants welcomed the move and expect it to provide fillip to revenues. "We do operate for all seven days but only for 12 hours so far. We now have scope to double the number of work hours to 24," Agarwal says. Below is the verbatim transcript of Kumar Rajagopalan, Lalit Agarwal and Rajesh Mohta's interview with Reema Tendulkar and Nigel D'Souza on CNBC-TV18.Nigel: We are finally getting in the news that the cabinet has approved the model shop and establishment act, what is your first take on that?Rajagopalan: It is a very good move from the government. It is definitely going to help consumers because it is going to enable consumers to come in and shop at the time that they want to shop.It will definitely help the retailers and improve the employment in the country. It should also help the government because if there is enough business happening in this country, it should help them getting more taxes. So I think it is a win-win-win move and this has been something that has been due for recognition for a long enough time and this will help the states in enacting the right kind of laws because ultimately shop and establishment act is a state law and the states will have to adopt it.Three of the states in the country have already done quite a bit in this, Karnataka has passed its retail policy, Maharashtra and Andhra Pradesh were the two states that have already created a retail policy. But this move from the central government is a very great move to get the state government to start thinking retail, start thinking employment and start thinking customer efficiencies.Reema: This will act as a model policy and then it is left to the jurisdiction at the states whether they want to implement it or not?Rajagopalan: Correct. But I think most of the states should be able to implement this.Reema: Any potential reservations which we see on the part of states which could prevent this from being implemented?Rajagopalan: I think some of the states may go back to the thought of what happens to law and order, how do they manage if the stores are open 24/7. However, those are details that needs to be worked upon. It is not something that is going to be big and worrisome.More importantly, this is an enabling act which if the state says that the store can remain open 24/7, it doesn’t mean that everybody is going to keep it open 24/7. All those stores and all those malls which are going to be able to get the best from the consumers at that time and that consumers are going to come in are going to keep the stores open and it is going to reduce the amount of red-tapism and the amount of inspector raj.The other big thing about the shop and establishment act is about creating that equality for women in retail workplace. That has been pending for the longest ever time. We know that women cannot work beyond 8pm in most of the states, whereas in the IT -- if you look at parallel as other services industry if we had not opened up for women to work along with men, we would have never been where we are as far as IT is concerned in this country. So, I think this is the other very big move from this and hopefully all the states would adopt it.Nigel: You are talking about additional revenues from the government, how do you think it will be split up between the state as well as the central government?Rajagopalan: That is a very different topic because there is quite a lot that is being discussed currently about the goods and services tax (GST) and they are saying that at the topline -- if revenues of retailers increase and automatically it increases taxes, that is what it does to the various states. So for state, if it is increasing taxes, it is increasing employment because people have kept their shops open for all seven days automatically and for longer hours, it means they will have multiple shifts and this means more employment, so it increases employment, it increases revenue.Reema: Is this good news for companies like V-Mart and also would you choose to be open seven days of the week, 24 hours or do you think the cost will outweigh the benefits or the incremental sales that you see?Agarwal: It is a good news for the whole industry and it is a welcome move by the Prime Minister of India and it is something which we are excited about because we operate in smaller town and we have been listening that malls have been operational for all the 365 days. The small shops in those bajaar areas in high street are not been allowed by certain commissioners and certain district magistrates to operate throughout 365 days so everyone is going to have the similar policies and everyone can enjoy.It is a best thing because nowadays every individual is busy so either on Sunday or a particular week days they prefer to be off, it is very difficult for us to maintain for the customers to come and shop. So it will be good news for the customers as well as the employees and for the entrepreneurs and the retailers like us because I think obviously stores in fashion areas may not operate 24/7 but yes, we will operate seven days but not 24 hours.Nigel: How many hours are you open for currently?Agarwal: We are open for 12 hours right now.For entire discussion, watch accompanying video...