National retail trade policy proposal back in consumer affairs department

Commerce ministry preparing industrial and e-commerce policies: Officials

The commerce and industry ministry has again written to the consumer affairs department, asking it to formulate the proposed national retail trade policy.

In April, the ministry had written to the consumer affairs department, which is currently the nodal government agency for regulating internal trade, to look into the possibility of creating such a policy. 

The policy aims to create more formalisation in retail and fix norms on minimum wages of workers as well as operating hours.

The ministry had suggested creating a task force, with members drawn from industry and government.

But a few weeks later, the department had replied, saying that as the Shops and Establishments Act was state-level legislation, it could not do much about it. 

Also, the Ministry of Consumer Affairs, Food and Public Distribution has framed a Bill to amend the Consumer Protection Act, which will take care of many of the problems consumers face.

The department in a letter also said though internal trade fell in its domain, it would want the commerce and industry ministry to frame the guidelines.

However, the commerce and industry ministry replied to it.

"Now we have again asked the consumer affairs department to look into the matter because it has more expertise in dealing with internal trade. The policy is expected to have widespread legal and financial implications for India, which has the highest shop density in the world, with 11 shops per 1,000 persons, far ahead of other nations," a senior ministry official said.

He hinted ministry officials were not too keen on taking up the responsibility of preparing yet another crucial sectoral policy.

The ministry is busy preparing the industrial and the e-commerce policies, whose basic drafts are expected to be released to the public soon.

In the meantime, several state governments have warned they shouldn't be left out of the deliberations on the matter since retail is still by and large governed by the Shops and Establishments Acts, enacted by state legislatures, according to sources.

The ministry began to consider framing the proposed policies after a nudge from the Prime Minister’s office, a senior government official said.

Earlier this year, the Confederation of All India Traders (CAIT) wrote to Prime Minister Narendra Modi, seeking a national policy for retail and a separate ministry for internal trade.

According to the CAIT, the sector provides the highest number of direct and indirect jobs, through an estimated 65 million small businesses, and require structured norms for its regulation and growth.

"It is estimated that domestic trade provides livelihood to about 250 million people in the country and is registering an annual growth rate of about 15 per cent. The share of the organised sector in overall domestic sales is projected to jump from around 5 per cent currently to around 10 per cent to 15 per cent in the next three years," the CAIT says on its website.

Who's policy is it

• Department of Commerce and Consumer Affairs are in a squabble over retail trade policy
• Commerce department wants consumer department to frame the broad guidelines, but the latter feels the former should do it
• Shops and Establishment Act, changes to which are a key component of proposed retail trade policy, falls under the state governments’ domain
• Trade associations have long pitched for a separate policy to guide retail trade in view of onslaught from big businesses