India's retail

The Centre has placed the reform ball in states court pushing for a liberalised regime through the model Shops and Establishment Act to allow shops to open 24/7. PM Modi has already given a strong reasoning with his “if the malls can open 24/7, why not everyone!” It would indeed be left to be seen, how the states respond to the 24-hour business, which becomes a legal right with this provision. The states response should be keenly viewed for one major reason: The impact on Law & Order.

The Indian retail market account’s for 22 percent of the country’s GDP and also contributes 8% of the total employment. It is also the second largest sector in terms of employment after agriculture, employing over 40 million people. Given the diverse nature of the business from wholesale cloth business to barber shops, from jewellery shops to leather tanners; the list is endless on the scale of activities involved in the sector. Hence the issues are diverse, and any policy application will need to amalgamate the multiple players involved. The key thing here is the role of the state in the entire process and how we can tap the efficiency of the market systems.

In this context, the 24/7 rule has brought the market again to the centre stage in an ever increasing conflict scenario between regulations and market! The market has been harping for an open regime with minimal regulations, while the government has often been left to tackle the safety and security issues of the workers and the customers alike. Let’s investigate how the 24/7 rule for shops will work in this regime!

First of all, there is an overwhelming assessment that states should take care of safety and security and markets take care of themselves. Given the welfare scenario, the public demands the state to intervene and blames them for not delivering. In majority of the debates, the role of markets is undermined or disoriented towards profiteering and commercialisation. We often fail to note that markets do also ensure safety and security (not necessarily only to consumers). Sufficient incentives and support will further this requirement. The case for 24/7 rule stands here!

To highlight the scenario, lets take the ensuing debate on whether adequate lighting through street lights will reduce crimes or not. The matter is yet to be settled. However, it is a fact that the incidence of crimes is relatively less during the night than on the day. Further, the number of offences against women is also less during the night, though an argument could be raised on the number of women present during that time. So enabling 24/7 rule will not change the status quo of safety unless it is understood that markets have the ability to respond to the need of safety, if when allowed, would provide measures to protect them. Surveillance cameras, security guards, personal assistance,etc are some of the examples wherein retailers respond to the call for safety. At the same time, there is always an underlying fear among shops to provide adequate safety for its customers, without which they face the prospects of losing customers. In addition to this, the shops compete to provide the best service, which however gets confined to the precincts of the shop and does not necessarily extend to the street. Now lets ask this question, Why don’t we see a scenario were a shop keeper is put in charge of maintaining the street or area in front of him? Why don’t we see proper lighting in many of the streets adjacent to bazaars/markets?  The answer to this lies in the ownership of public spaces. It is been ordained that all governments (largely under the domain of Municipal Corporations or Municipalities) should maintain public spaces. If anyone litters the street or urinates, the state is responsible for the action and should ‘take the blame’. The NYBD (Not in my Backyard Syndrome) has its roots on the ineffectiveness of making people own the streets. Penalising the local residents or shop keepers is an elusive dream. Ownership would mean, being responsible and act responsibly in matters considered public in nature- sanitation, waste management, street management,etc. Hence, it strikes at the very root of the concept of public space and role of private players.

This requires blurring the line between a public and private citizen and the rights involved. New public management advises the need for a participatory approach towards public issues. When translated, would mean, let the people take ownership and be responsible for maintaining its surroundings. This philosophy should be the core for tackling the law and order issue raised against the 24/7 rule. Else, it would be virtually impossible to envisage compliance with the rules of safety and security. As certain resident associations and apartment owners association take up the responsibility of keeping their premises clean and safe; all shop owners/associations or retailers should be given the mandate of maintaining the public space of the bazaars/market. The effective strategy would allow them to innovate and implement measures to address safety and security in the street and let the government monitor it strictly and through random inspections. At no point in time, the state is replaced or displaced. And of course moral policing should also be checked!

The governments should  throw open such partnerships and participatory systems to effectively help their public management of streets, drainage, streetlights, parks,etc. The first step in the process would be to give rights autonomy to the ward level councillor to enter into agreements with such associations for maintaining areas under their jurisdiction. Current Municipal Laws envisages approval from the State government or Corporation Council were money is involved and prescribes monetary limit. The Corporate Social Responsibility (CSR) mandated companies would, therefore, need to route its ‘social commitments’ through the state to the local areas. This centralised system however disincentives local partnerships which can be gauged from the various cases of street beautification gone awry because of lack of maintenance or ownership involved. The same scenario exists for ensuring safety and security as it is relatively difficult for a centralised monitoring system without local support. In an ideal scenario, the local retailers retain the responsibility to ensure the safety of people in their vicinity. This would be more protective than reactive.  In cases of failure, the ward councillor can take action, impose penalties, and make sure the rules are complied. The quality of Living, Livability Index, Safety Index,etc can be tagged at a local level and assist in encouraging local initiatives. Let each Ward or Region areas compete and help build a safe and secure public space. This should extend to street management including pavements, drainages wherein the commercial institutions can also pool money and maintain the streets. Ignoring a participatory approach and role of markets will not achieve the intended policy outcomes such as the 24/7 rule.  The Model Shops and Establishment Act has given the right opportunity for states to start the process of looking beyond the traditional modes of regulations and governance structures.

Madhu S is the Director (Research and Projects) at CPPR. Views expressed by the author is personal and does not represent that of CPPR.

Madhu S
Madhu S
Madhu Sivaraman is a Research Scholar at CPPR.


  1. […] article was originally published on Centre for Public Policy […]

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