States have been given the discretion to allow foreign
investments in retail. Andhra Pradesh has taken the lead in
allowing foreign investments by launching its retail trade
The State contributes 8 per cent of the total retail market of
13 million stores in India. There are 83,000 organized sector
stores in the state and this number is expected to rise up to 1,
66,000 by 2017. Andhra Pradesh Chief Minister has announced a new
retail trade policy, a first of its kind in the country. The
government through this policy aims to attract Rs.5, 000- Crores
investment in the retail sector by 2020.
Trends indicate that the state has a huge potential to become
prime retail trade destinations and could be a significant
employment generator. The new policy targets creation of 20,000
fresh jobs in the sector by allowing flexible business hours of the
retail stores i.e. seven days a week from 6 a.m. to 11 p.m. and
engagement of workers on hourly basis (number of workers not to
exceed 25% of total employees). The State Government has also
signed Memorandum of Understandings (MoUs) with the four leading
retail chains Walmart, Future Group, Spencer's and Arvind
Lifestyle who have agreed to invest Rs.1500 Crore in the state.
Following are the key highlights of the policy:
Single Desk: Government has extended Single
Desk Policy 2015-2020 for clearances and approvals to all the
retail enterprises irrespective of its sizes.
Land Allotment: The state through its nodal
agency Andhra Pradesh Industrial Infrastructure Corporation will
allot land for setting up of distribution centres as well as
warehouses under the commercial category for a period of 33
Labour Reforms: To prevent strikes in the
sector, a significant measure has been taken by the state wherein
food and grocery retail enterprises have been included under the
Essential Services Maintenance Act (ESMA). The state has also
declared distribution centres and warehouses of retail enterprises
as public utilities under the industrial disputes act 1947, thereby
prohibiting workers of such enterprises to go on strikes.
Special Benefits: Under the policy the state
plans to extend tailor-made benefits to mega retail enterprises to
suit particular investment requirements on the case to case basis
taking into account the gestation period, locational aspects,
technology automation, project's importance to the state's
economic growth and its ability to generate large scale employment
for people or revenues for the state.
With this unprecedented step, Andhra Pradesh certainly has set
an example for the other states. However, successful implementation
of the policy will certainly depend upon number of factors such as
proper functioning of single desk policy, quick decision on land
allotment for setting up of distribution centres, administrative
support, imposing faith on the local kirana shops, and coordination
with farmers etc. Nevertheless, it is a welcome move and step in
the right direction to turn around averseness to organised retail
and foreign retailers in India.
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