GO 11 Andhra Pradesh Retail Trade Policy 2015 – 2020


There is need to promote the development of Retail Sector in Andhra Pradesh. Several representations have been received by associations of retailers, including the Retailers Association of India (RAI) in which they have highlighted challenges facing the growth of Retail Industry in Andhra Pradesh. Suggestions have been received on initiatives that can be taken up to improve the business environment in the Retail Sector.

Government have decided to bring out a policy on Retail Trade, focusing on simplification of labour laws & processes, skill development support, and single desk clearances, so as to stimulate growth in the Retail Sector

Accordingly, Ind. & Com. Dept. has held stakeholder discussions and has drafted the “Retail Trade Policy 2015-20”, duly benchmarking against the policy environment existing in other States in the Country. Government, after careful examination, hereby introduces the Andhra Pradesh Retail Trade Policy 2015-2020. The detailed policy document is appended at Annexure-I.

Andhra Pradesh Retail Trade Policy 2015-20 

. The State is also providing significant thrust to sectors such as Food Processing, Electronics, Textiles & Pharmaceuticals, and is poised to emerge as a key sourcing hub for many segments of the Retail trade industry.

The Retail Trade Policy 2016 aims to catalyze growth and provide thrust to the development of the Retail sector in Andhra Pradesh.

(1)   Policy Objectives and Targets

Policy objectives and targets are as follows:

a) Objectives:

  • Make Andhra Pradesh one of the most preferred destinations for retail trade in India.
  • Make Andhra Pradesh a hub for retail logistics by promoting setting up of warehouses and distribution centers.
  • To accelerate investment flow to underdeveloped regions of the state.
  • Identify and address existing infrastructure gaps affecting retail trade industry in AP.
  • Encourage skill development, create more employment opportunities for all sections of society involved in retail trade.
  • Leverage retail trade as a tool for socio-economic development of the state.
  • Promote e-commerce in the state.
  1. b) Targets:
  • Attract new investments worth Rs.5,000 crore in the sector by 2020.
  • Create 20,000 additional employment opportunities in the sector by 2020.

Policy Validity and Applicability

  1. This policy will be valid for 5 years from date of notification, unless otherwise notified separately by GoAP.
  2. The policy will be applicable to all Retail Enterprises which fulfil any one of the following criteria:
  3. Retail Enterprise shall have an annual turnover of Rs. 1 crore or more
  4. Retail Enterprise shall directly employ 10 or more people on full time basis at all times
  5. However, the Single Desk Clearance facility [referred to in section 10(a) of Retail Trade Policy] and Simplification of processes [referred to in section 10(b) of Policy] in retail sector shall be applicable to all retail enterprises irrespective of number of people employed or annual turnover of the retail enterprise.

 Infrastructural Support

(a)  Connectivity infrastructure

Andhra Pradesh offers excellent connectivity infrastructure including road, rail and inland water transport. In terms of improving road connectivity, there are plans for upcoming ring road and radial roads in proposed green field state capital, 6/4/2 lane inter-state connectivity and port connectivity with dedicated cargo lanes. For improving rail connectivity, GoAP shall strive to improve rail network in sub urban and backward areas, improve frequency of trains from different districts to the capital city and provide 100% electrification for all railway routes. Thrust shall also be laid on developing inland water transport in the State. National Waterway- 4 stretches from Kakinada to Puducherry over 1,095 kilo metres.  This would connect ports, cities and industrial townships and the estimated cargo traffic on this waterway would be 10 metric ton by 2029. Rajahmundry-Bhadrachalam inland waterway connectivity over the Godavari River is also an important waterway for cargo transport.

(b)  Setting up of Distribution Centers/ Warehouses

GoAP shall strive to support the setup of world class warehouses/ distribution centers on PPP basis. The APIIC will allot land for Distribution Centers/Warehouses under the commercial category on lease for 33 years.

Quality Power: GoAP is committed to supplying 24X7 reliable, quality power to While the state is currently power surplus, it has embarked on an ambitious plan to reach 16,484 MW of power generation capacity by 2019-20.

 

Skill Development

  • GoAP has set up APSSDC on lines of the National Skill Development Corporation (NSDC), a not-for-profit company under the Companies Act, 2013.
  • APSSDC will provide financial and technical support for outcome linked skill development initiatives.
  • Skill development program for youth, focusing on tribal and rural youth, shall be instituted, with a target to train 1 lakh youth over a period of 5 An initial provision of Rs. 10 crores shall be made for this purpose.
  • GoAP, in close coordination with retail associations, shall strive to set up Centre of Excellence on public private partnership mode for which it shall provide 50% financial assistance towards capital

Ease of Doing Business

(a) Single Desk Clearance

GoAP shall facilitate all clearances in accordance with Single Desk Policy 2015-20 bringing together all stakeholder departments on a common platform.
ii.District Collector will be the nodal officer for single desk clearances at the district level.

(b) Simplification of processes

i.  For ensuring that all permissions for retail enterprises are given at district level, GoAP shall put in place a mechanism of tracking with necessary delegation of power across departments.
ii.  GoAP shall review existing procedures, rules applicable to the retail sector with the objective of simplifying & streamlining processes, and make necessary changes as warranted
(c) Relaxation of stocking limit Stocking limits for essential commodities prescribed under Essential Commodities Act, 1955 shall be relaxed for retailer (multiple outlet) or departmental retailers. These are subject to various regulations/circulars as may be applicable from time to time.

(d) Electronic Bills

For enhancing traceability of transactions and need to save paper, organized retailers shall be allowed to have option to issue bills (tax invoices) to consumers in an electronic mode and thereby replace physical printing of paper. The mode for this shall be duly approved by concerned department. Retail enterprises should ensure that systems generating such electronic bills are not tampered with and turnovers in the bills are properly accounted for in account books of retail enterprises for the purpose of tax due thereon.

(e)Store Sign Board

GoAP shall exclude retail trade from prior permission and charges / fees with regards to store sign boards displaying trade name of company on business place of company. This shall be subject to local rules and regulations with regards to size and location of such sign boards.

Local Sourcing

GoAP will work with retail associations to encourage local sourcing from Andhra Pradesh through buyer-seller meets

Mega Retail Enterprise

  1. Projects with an investment of at least Rs 100 crore or direct employment generation of 2,000 will be accorded mega retail enterprise status. Such investments will include setting up of at least one of the following components – large distribution Centers, Warehouse and Retail Enterprise.
  2. The Government will extend tailor-made benefits to mega retail enterprises to suit particular investment requirements on 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.

 

  1. The A.P. Retail Trade Policy will come into operation from date of issue of this order and shall remain in force for five years. The benefits mentioned in the Policy will be extended to Retail Traders as per the operating guidelines for implementation of the Policy to be notified separately.

1. Introduction to Andhra Pradesh

Andhra Pradesh is strategically located on the south-eastern coast of India and is a natural gateway to East and Southeast Asia. The state has a population of 4.93 crore (as per population census – 2011), accounting for 4% of country’s population, residing in 4.9% of India’s geographical area. Andhra Pradesh has abundant natural resources (barytes, limestone, bauxite, and a number of minor minerals), fertile land and river basins, water resources, extensive canal system and conducive agro-climatic conditions. It has the second longest coastline in India and is also one of the largest producers of marine products.

At current prices, Gross State Domestic Product (GSDP) of Andhra Pradesh was ?4,75,859 crore in 2013-14. Between 2004-05 and 2012-13, average annual GSDP growth rate of Andhra Pradesh was 7.25% while average per capita income at (current prices) increased from ?46,345 in 2008-09 to ?88,876 in 2013-14.

Advanced estimate for GSDP in 2014-15 is ?5,20,030 crore and target for GSDP in 2015-16 is ?6,36,606 crore (both at current prices).

2. Retail sector in India

The dynamic retail landscape of India is marked by the following factors:

a) Retail sector in India is emerging as one of the largest sectors in the economy. The sector is estimated at ?33.4 lakh crore with a CAGR of 15% over the last five years. The sector accounts for over 20% of the national GDP.

b) While the overall retail market will grow at 12 per cent per annum, modern trade will grow twice as fast at 20 per cent per annum, and traditional trade at 10 per cent. Modern trade, which includes supermarkets, hypermarkets and other organized retail outlets is expected to grow three times to ?11.25 lakh crore in 2020

c) Retail sector is the fastest growing sector in terms of employment generation, and is second only to agriculture sector in terms of number of people employed. The sector directly employs around 4 crore people, besides creating many indirect employment opportunities.

d) India had the highest number of retail outlets in the world at over 1.3 crores in 2014. It also has the highest number of outlets (11,903) per million inhabitants.

e) Organized Retail Penetration (ORP) in India is low (8%) vis-a-vis other comparable countries. With over 92% of business coming from fragmented unorganized sector, such as traditional family run stores and corner stores, Indian retail sector offers immense potential for growth and consolidation.

f) Revenue generated from organized retail is projected to touch ?5.93 lakh crore by 2019, and account for 24% of overall retail market.

g) E-commerce and m-commerce is expected to be one of the major growth drivers. The segment is projected to touch ?12.5 lakh crore by 2020. With growth in e-commerce/m-commerce industry, online retail is estimated to reach ?4.38 lakh crore by 2020 from ?14,000 crore billion in 2013 (in Gross Merchandise Value).

3. Why Andhra Pradesh

3.1. Andhra Pradesh’s potential as a Retail hub

a) Andhra Pradesh has huge potential to become one of the leading destinations for retail trade. This is reinforced by its large consumer base, increasing per capita income, rapid urbanization and abundance of raw material.

b) The State’s per capita income as per Advance estimates of 2014-15, has posted a growth of 11.21% YoY, reflecting enhanced standard of living and increased purchasing power.

c) Percentage of urban population to total population in the State has also shown an upward trend, reaching 29.47% in 2011 from 24.23% in 2001. This increase has helped in growth of retail ecosystem in the state.

d) Andhra Pradesh is also a leading state in agriculture, horticulture and Dairy/Poultry production, end products of which serve as inputs for retail trade industry. New initiatives like e-Marketing are also being implemented to eliminate mediators’ involvement aimed at improving linkage between farmers, food processors and retailers.
e) Andhra Pradesh constitutes about 8% of India’s total retail market of 13 million stores. There are 1.04 million retail stores in Andhra Pradesh which include organized and un-organized retail. The organized sector comprises of 83,000 stores in the state. It is estimated that about 16,600 number of retail stores are expected to open in Andhra Pradesh by 2017.

f) The retail sector in Andhra Pradesh has one of the fastest growth rate (9.03%) followed by industry sector (7.19 %) and agriculture sector (3.89 %) between 2004-05 & 2012-13. The sector contributes to about 33% of Andhra Pradesh’s GSDP.

g) There are around 42 lakh individuals employed in the retail sector in Andhra Pradesh, with a large proportion of women employees and non-graduates, who are employed at retail stores

h) The retail sector is also a significant contributor to the state exchequer through taxation on sale of goods sold.

3.2.Tactical advantages that Andhra Pradesh offers

a) Reliable Infrastructure:

GoAP is committed to supplying 24×7 reliable, quality power to industry. While Andhra Pradesh is currently power surplus, it has embarked on an ambitious plan to add another 16,484 MW of power generation capacity by 2019-20.

b) Technology Competitiveness:

Andhra Pradesh has been promoting investments in technology sector and facilitating growth of IT enabled services through proactive measures.

4. Policy Objectives and Targets
Policy objectives and targets are as follows:

a) Objectives:

i. Make Andhra Pradesh one of the most preferred destinations for retail trade in India.
ii. Make Andhra Pradesh a hub for retail logistics by promoting setting up of warehouses and distribution centers.
iii. To accelerate investment flow to underdeveloped regions of the state.
iv. Identify and address existing infrastructure gaps affecting retail trade industry in AP.
v. Encourage skill development, create more employment opportunities for all sections of society involved in retail trade.
vi. Leverage retail trade as a tool for socio-economic development of the state.
vii. Promote e-commerce in the state.

b) Targets:

i. Attract new investments worth Rs.5,000 crore in the sector by 2020.
ii. Create 20,000 additional employment opportunities in the sector by 2020.
5. Policy Validity and Applicability
a) This policy will be valid for 5 years from date of notification, unless otherwise notified separately by GoAP.
b) The policy will be applicable to all Retail Enterprises which fulfil any one of the following criteria:
i. Retail Enterprise shall have an annual turnover of ?1 crore or more
ii. Retail Enterprise shall directly employ 10 or more people on full time basis at all times
c) However, the Single Desk Clearance facility [referred to in section 10(a) of Retail Trade Policy] and Simplification of processes [referred to in section 10(b) of Policy] in retail sector shall be applicable to all retail enterprises irrespective of number of people employed or annual turnover of the retail enterprise.

6. Definitions

a) Retailer and Retail trade

Any entity that sells goods or provides service to ultimate consumer. Ultimate consumer is one who buys these goods for personal use or consumption. A retailer therefore is one who deals with end consumers, maintains data of dealing with such end consumers and is responsible for service provided to end consumer. Sale of such goods can happen over various channels including – brick-and-mortar, direct selling, e-commerce, television, mobile phones or tablets (m-commerce), and other channels. Any entity or brand that portrays itself as a store or seller to end consumer and thereby creates a service expectation in the mind of consumer would be termed as a retailer. Activity undertaken by a retailer is termed as retail trade.

b) Retail Enterprise
Retail Enterprise is a ‘shop’ as defined in Section 2 (21) of Andhra Pradesh Shops & Establishments Act, 1988.

c) Warehouse
“Warehouse” means any premises (including any protected place) conforming to all requirements including manpower specified by relevant and competent authority by regulations wherein warehouseman takes custody of goods deposited by depositor and includes a place of storage of goods under controlled conditions of temperature and humidity or otherwise.

d) Distribution Center
Distribution center is a facility at a single location that stocks a vast number of products sourced from different suppliers, and distributes goods to retail stores or direct-to-consumer.

7. Infrastructural Support

a) Connectivity infrastructure
Andhra Pradesh offers excellent connectivity infrastructure including road, rail and inland water transport. In terms of improving road connectivity, there are plans for upcoming ring road and radial roads in proposed greenfield state capital, 6/4/2 lane inter-state connectivity and port connectivity with dedicated cargo lanes. For improving rail connectivity, GoAP shall strive to improve rail network in sub urban and backward areas, improve frequency of trains from different districts to the capital city and provide 100% electrification for all railway routes. Thrust shall also be laid on developing inland water transport in the State. National Waterway-

4 stretches from Kakinada to Puducherry over 1095 kilometers. This would connect ports, cities and industrial townships and the estimated cargo traffic on this waterway would be 10 metric ton by 2029. Rajahmundry-Bhadrachalam inland waterway connectivity over the Godavari River is also an important waterway for cargo transport.

b) Setting up of Distribution Centers/ Warehouses
GoAP shall strive to support the setup of world class warehouses/ distribution centers on PPP basis. The APIIC will allot land for Distribution Centers/Warehouses under the commercial category on lease for 33 years .

c) Quality Power: GoAP is committed to supplying 24X7 reliable, quality power to industry. While the state is currently power surplus, it has embarked on an ambitious plan to reach 16,484 MW of power generation capacity by 2019-20.

8. Skill Development
a) General Initiatives:
i. GoAP has set up APSSDC on lines of the National Skill Development Corporation (NSDC), a not-for-profit company under the Companies Act, 2013.
ii. APSSDC will provide financial and technical support for outcome linked skill development initiatives.

 

b) Sector Specific Initiatives
i. APSSDC and renowned private institutions will institute training-based certification and placement programs.
ii. APSSDC will collaborate with various retail associations as well as local retail industry to understand industry requirements and shall institute a merit based, defined certification and placement procedure for developing appropriate manpower for retail enterprises in the State. This shall be helpful for small enterprises which are not in position to impart the required training in-house.
iii. Skill development program for youth, focusing on tribal and rural youth, shall be instituted, with a target to train 1 lakh youth over a period of 5 years. An initial provision of ?10 crores shall be made for this purpose.
iv. GoAP,in close coordination with retail associations, shall strive to set up Centres of Excellence on public private partnership mode for which it shall provide 50% financial assistance towards capital expenditure.

9. Simplification of Labour Laws
i. Retail enterprises shall be allowed to stay open every day of the year provided that the employees are given compensatory, compulsory weekly offs on a preferential basis without any deduction of benefits (monetary and otherwise). List of such holidays for a month shall be placed on notice boards in advance.

ii. Working hours of the employees shall be a maximum of 8 hours per day and not more than 48 hours in a week. Manpower deployment details shall be added to the application for registration by the employer (which is now online under the Integrated Registration Act, 2015).

iii. Record of overtime shall be maintained in wages register separately in respect of the employees who worked beyond normal working hours and wages for overtime shall be paid to all eligible employees in accordance to provisions of the Act.

iv. The employees working on a national holiday shall be given a compensatory holiday in addition to overtime wages.

v. Retail enterprise shall be allowed to operate between 6 AM and 11 PM IST, provided employees work in a minimum of two shifts with a minimum of one hour changeover period. This is subject to the employer providing shift-wise employee details and specifying weekly holiday for each of the employees.

vi. Employment of women shall be permitted in all shifts, subject to the enterprises ensuring safe and secure working environment and secure conveyance from workplace to place of residence. The employer shall be solely responsible for ensuring the above till women employees reach respective place of residence.

vii. The state’s inspection system is through an Inspection Portal which is computerized, randomized, and risk based, allowing significant relief from routine inspections under various acts.Information obtained from the annual combined return under the Integrated Registration Act, 2015 shall be used for this purpose, and only those establishments, which are found in the grey will be included in the inspection-required category.

viii. Retail enterprise shall be allowed to offer part-time employment subject to the working hours for part time employees being expressly specified. Minimum per hour wage rate shall be proportionately determined in accordance with minimum monthly wage rate specified under Minimum Wages Act. Retail unit cannot engage more than 25% of its employees as part time employees. This would be subject to the enterprises strictly adhering to laws regarding child labour and other similar applicable laws/rules.

ix. Retail enterprise shall be allowed to maintain employee related records in electronic form, and provisions shall be made to accept returns in electronic form in line with progress of computerization in Labour department.

x. Food and Grocery business retail enterprise shall be included under the Andhra Pradesh Essential Services Maintenance Act as

‘Essential Services’ to dissuade strikes.

 

xi. For distribution centers and warehouses, GoAP will give permission for 24×7 (three shifts) operations, flexibility in employment conditions including working hours for women and shorter or longer shift timings and hiring of contract workers. Safety and security of all employees, not only place of employment, but also during commute from workplace to place of residence needs to be ensured.

xii. Distribution centers and warehouses for the retail sector will be declared to be a ‘Public Utility’ under the Industrial Disputes Act, 1947 in order to prevent flash strikes.

10. Ease of Doing Business

a) Single Desk Clearance

i. GoAP shall facilitate all clearances in accordance with Single Desk Policy 2015-20 bringing together all stakeholder departments on a common platform.

ii. District Collector will be the nodal officer for single desk clearances at the district level.

b) Simplification of processes

i. For ensuring that all permissions for retail enterprises are given at district level, GoAP shall put in place a mechanism of tracking with necessary delegation of power across departments.

ii. GoAP shall review existing procedures, rules applicable to the retail sector with the objective of simplifying & streamlining processes, and make necessary changes as warranted.

c) Relaxation of stocking limit
Stocking limits for essential commodities prescribed under Essential Commodities Act, 1955 shall be relaxed for retail enterprises(multiple outlet) or departmental retail enterprises. These are subject to various regulations/circulars as may be applicable from time to time.

d) Electronic Bills
For enhancing traceability of transactions and need to save paper, organized retail enterprises shall be allowed to have option to issue bills (tax invoices) to consumers in an electronic mode and thereby replace physical printing of paper. The mode for this shall be duly approved by concerned department. Retail enterprises should ensure that systems generating such electronic bills are not tampered with and turnovers in the bills are properly accounted for in account books of retail enterprises for the purpose of tax due thereon.

e) Store Sign Board
GoAP shall exclude retail trade from prior permission and charges / fees with regards to store sign boards displaying trade name of company on business place of company. This shall be subject to local rules and regulations with regards to size and location of such sign boards.

11. Local Sourcing
GoAP will work with retail associations to encourage local sourcing from Andhra Pradesh through buyer-seller meets.

12. Mega Retail Enterprise
i. Projects with an investment of at least ?100 crore or direct employment generation of 2,000 will be accorded mega retail enterprise status. Such investments will include setting up of at least one of the following components–large distribution Centers, Warehouse and Retail Enterprise.

ii. The Government will extend tailor-made benefits to mega retail enterprises to suit particular investment requirements on 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.

Andhra Pradesh has huge potential to become one of the leading destinations for retail trade. The State is a leader in agriculture, horticulture, dairy/poultry production and other raw materials, ranking amongst the top states in India across many sectors

 

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