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Retailers hail Model Shop announcement, pay hikes
30
Jun '16
Retailers have welcomed the government's decision to allow shops, malls and cinema halls to run round-the-clock saying it will provide convenience to customers and add thousands of jobs.

Retailers have also hailed the government's decision to implement the 7th Central Pay Commission's recommendations, which, they say, will boost consumption in the retail sector, consumer goods, retail, automobiles, travel and tourism and bank credit. The government's decision is expected to give pent-up demand a boost.

The Cabinet has also decided that arrears of pay and pensionary benefits will be paid during the current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the next financial year. The recommendations will come into effect retrospectively from January 1, 2016.

Retailers are eyeing one crore govt employees who will benefit from the new pay structures.

The Cabinet's decision to clear the Model Shops and Establishment Bill will bring parity in laws across India but its success will depend on states adopting it, retailers said.

“This will definitely help in improving efficiency and a new level of retail can open up... I will call it the end of permission raj,” Shoppers Stop Managing Director and Customer Care Associate, Govind Shrikhande said.

Retailers Association of India CEO, Kumar Rajagopalan said this step is a win-win for everyone, including businesses, consumers and government.

“With government clearing Model Shops and Establishment Bill, a model has been created which will have to be adopted by states. Some states like Maharashtra and Andhra Pradesh have already adopted retail policy. This will benefit not just businesses but also consumers and government in the form of taxes and higher employment. Retailers will experiment for sure,” he said.

But not everybody is jumping in joy. The Confederation of All India Traders (CAIT), has suggested states should first run a pilot project in any one big market of a city for impact assessment.

Fast food restaurant chain KFC welcomed the government's move to allow shops to run round-the-clock, would boost the industry. “This is a welcome development as it will provide a definite boost to industry and the economy,” KFC India Managing Director Rahul Shinde said

According to India Ratings & Research, the pay package will boost consumption in the economy by Rs 45,110 crore (or 0.3 per cent of GDP) and increase savings by Rs 30,710 crore (or 0.2 per cent of GDP). The ratings agency also said the central government's net tax revenue (after sharing with states) will increase by Rs 14,100 crore (or 0.09 per cent of GDP) this financial year. All of this is significant and the full impact will be felt in FY18 (2017-18), the agency said, when big-ticket items get a fillip. (SH)

Fibre2Fashion News Desk – India


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