In a significant move aimed at easing compliance burdens for small businesses, the Punjab Cabinet, led by Chief Minister Bhagwant Mann, on Wednesday approved key amendments to the Punjab Shops and Commercial Establishments Act, 1958, offering major relief to small shopkeepers across the state. The decision was taken at a meeting of the Council of Ministers held today at the Chief Minister’s official residence.
Addressing the media after the cabinet meeting, Chief Minister Bhagwant Mann said the decision is intended to dismantle the long-standing “Inspector Raj” that has burdened small retailers with excessive documentation and inspections.
A spokesperson from the CM’s Office stated that, under this amendment, all businesses employing up to 20 workers will be exempted from all provisions of the Act. This move is expected to directly benefit lakhs of shopkeepers across Punjab.
Earlier, if a shopkeeper employed workers, they were required to maintain detailed records for labor inspectors. Under the amended provisions, shops employing up to 20 workers or helpers will no longer be required to maintain detailed employee records or be subject to routine labour inspections.
However, such businesses will still be required to submit relevant information to the Labour Department within six months of the Act coming into force or the commencement of their business.
"This will directly benefit nearly 95 per cent of shopkeepers in Punjab," said CM Mann, adding that the move is expected to promote ease of doing business and reduce harassment by officials.
Further, the permissible overtime limit for workers has been increased from 50 hours to 144 hours, allowing employees to earn more, while the maximum working hours per day have been capped at 12 hours, inclusive of rest intervals. Nevertheless, employees must be paid overtime at double the regular rate for work exceeding 9 hours per day or 48 hours per week.
For larger establishments employing more than 20 workers, Mann announced that operational approvals will now be granted within 24 hours of application submission. In case of any errors in the approval process, businesses will be given an opportunity to correct them — a step aimed at reducing unnecessary legal disputes.
Moreover, penalties under Sections 21 and 26 have been rationalised—raising the minimum fine from Rs. 25 to Rs. 1,000 and the maximum from Rs. 100 to Rs. 30,000.
To prevent harassment and allow businesses time to achieve compliance, a three-month grace period will be provided between the first and second offences, as well as subsequent ones.
Meanwhile, all the securities and rights provided by various labour laws will be adhered to for safeguarding the interests of the labourers.
"We are putting an end to bureaucratic red tape and creating an environment that supports economic growth," Mann stated, adding that the amended Act will be introduced in the Vidhan Sabha for formal passage and subsequent implementation.
"We are ending the era of Inspector Raj and paving the way for progress," said Mann. He added that the amended Act will be tabled in the Vidhan Sabha for passage and subsequently implemented.
The announcement has been welcomed by business groups and shopkeepers, who have long demanded reforms to outdated regulatory frameworks.
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