The Delhi Government’s allusions to the night economy diverge sharply from the standard Indian political discourse surrounding economic and labour-related issues.
By Pranav Agarwal
As the COVID-19 pandemic slowly recedes from public conversation, political focus has shifted to the economic devastation it has left in its wake. Alarming statistics from the Center for Monitoring the Indian Economy indicate that only 40% of India’s 900 million-strong workforce now participates in the job market, while the Government’s Periodic Labour Force Survey paints only a marginally better picture, suggesting a labour force participation rate that hovers around 47%. In the wake of this employment crisis, the Delhi Government, as part of what was dubbed its “rozgar budget”, announced ambitious plans aimed at creating 20 lakh jobs over the coming five years. The Budget Speech, delivered by the Deputy Chief Minister, Mr. Manish Sisodia in March, was peppered with allusions to many innovative ideas, ranging from hosting shopping festivals to promoting urban gardening.
Of particular curiosity was Mr. Sisodia’s repeated reference to the “night economy” of the city, or the sphere of economic activity that takes place after regular working hours – an idea that, despite its prominence in international urban governance, has thus far found limited purchase in India. While falling short of laying a complete roadmap for developing its night economy, the rozgar budget looks to promote pockets of its nightlife through incentives for the proliferation of food-trucks and cloud kitchens, aimed at creating around 3 lakh jobs in the city. Giving proper impetus to the city’s night economy, however, requires a broader re-think of the antiquated laws governing business in Delhi, that limit the growth potential of the city’s economic ecosystem.
Delhi’s nocturnal ambitions
The Delhi Government’s allusions to the night economy diverge sharply from the standard Indian political discourse surrounding economic and labour-related issues. The night economy of Indian cities is often viewed by policy makers through jaundiced eyes, with nocturnal activity routinely conjuring mental images of immorality and hedonism.
In truth, however, the health of a city’s night economy contributes significantly to its economic potential. As the second largest metropolitan area in the world, and one with enviable cultural and historical riches, the potential of Delhi’s night economy, if nurtured, is likely to be formidable. London’s night economy comprises 6-8% of the city’s economy. Should Delhi’s night economy come to constitute a similar proportion of its GSDP (which reached ₹ 9, 23,967 crore in the year 2021-22), a rough calculation indicates that around an additional ₹ 55,000-80,000 crores shall be added to its GSDP. Nightlife also adds vibrancy to city-life, nurtures its creative and artistic potential by opening up an audience that is unavailable during the day, and bolsters its attractiveness as a hub of tourism.
While the State Government’s specific plans on night time work are limited to cloud kitchens and food trucks, these announcements come in the back of a more comprehensive framework on developing the night economy that was announced by the Delhi Development Authority as part of its draft ‘Master Plan for Delhi – 2041’ (MPD 2041). The MPD 2041 seeks to create ‘nightlife circuits’ where restaurants, hotels, retail stores and entertainment venues shall be permitted to operate till late in the night. These, the plan stipulates, shall be given support through uninterrupted power supply, night-time traffic management and late-night connectivity to public transport. While the MPD 2041 has not yet been notified, its proposals to bolster Delhi’s nightlife have elicited considerable interest.
The night economy’s legal hurdles
While desirable, the creation of a night economy in Delhi is not a straightforward affair. Doing so will require changes to the Delhi Shops and Establishments Act, 1954 (DSE Act), the primary law that governs shops and commercial units in the region. The Delhi Government, under Section 15 of the DSE Act, can set opening and closing times for shops and establishments. Through a 2004 notification, the time for closing of all shops was set at 11 PM, with women only being permitted to work till 9 PM during the summer, and 8 PM during the winter. These restrictions prevent the city from developing an active nightlife, and should Delhi look to transition to a night economy, it will have to be dismantled.
The complications do not end here. The MPD 2041 sets out the vision of the Delhi Development Authority, which is under the Central Government. The DSE Act, in contrast, is a state law, administered by the machinery of the State Government. For the project of erecting Delhi’s night economy to bear fruit, the two shall have to work together towards this common goal, requiring a significant degree of coordination between the two.
The DSE Act does provide for a mechanism through which establishments can seek exemptions from its applicability upon them. The efficacy of this mechanism, however, is uncertain. From publicly available information, very few exemptions have been granted over the last decade. The development of the night economy of the city shall require a considerably more robust response – one that permits establishments to operate at night by default.
A slow country-wide drift towards night work
Prohibitions on working at night are a mainstay of shops and establishments legislation across the country. However, the last decade has seen a slow but perceptible move towards giving night work more acceptability. The initial impetus in this direction came from the Central Government’s Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 (the Model S&E Bill). The Model S&E Bill, which provides a template for states to design their own shops and establishment legislations, proposed allowing shops and establishments to remain open at any time, for all days of the year. States such as Maharashtra, Gujarat and Uttarakhand have since introduced new shops and establishments legislation, permitting shops and establishments to stay open at all times of the day.
Indian cities that are comparable in stature to Delhi – such as Mumbai and Bengaluru – have, over the last few years, made moves to permit 24×7 operation of shops and establishments. In November 2019, and again in January 2021, Karnataka passed notifications permitting shops with more than ten employees to stay open 24×7. Mumbai, after passing a fresh shops and establishments legislation in 2017, formulated a “Mumbai 24 Hour” plan in January 2020, allowing malls, multiplexes, shops and eateries to stay open through the night. States such as Karnataka and Uttar Pradesh have also recently amended their laws to permit women to work through the night, something that continues to be prohibited in the national capital.
Many of these moves have been rolled back in view of the COVID-19 pandemic, as night curfews and other social distancing measures have temporarily put the development of the night economies of Indian cities on hold. However, with the end of the worst phase of the pandemic possibly in sight, it is likely that such measures will receive renewed impetus in the future.
Whose night economy is it anyway?
For all its enthusiasm for developing its night economy, Delhi must take heed of lessons from similar endeavours by other cities. Mumbai’s pilot project for 24×7 operations, for instance, saw limited interest from the public. Newspaper reports suggest that Delhi’s traders are less than enthused about the Government’s announcements regarding late night operations.
This reluctance is understandable; traders are naturally reluctant to keep shops open in the absence of enough customers to cater to late at night. Delhi’s challenge, therefore, lies in the creation of a culture that finds it safe, acceptable and convenient to be out till late. Part of this challenge must be addressed through massive public investment in night time infrastructure – particularly in policing, traffic management and transport. Other cities have evolved positions such as the ‘night czar’ (London) or ‘night mayor’ (Amsterdam) to coordinate their respective city governments’ considerable night-time operations.
Equally, however, this culture must be inculcated by widening one’s focus beyond the industries that are conventionally considered part of the economy – such as the food and beverages business – and think of how a wider practice of night-time economic activity can be nurtured. Limiting our efforts to restaurants, bars and entertainment venues can make the night-time economy anaemic and limited to a small sub-set (overwhelmingly young, male and affluent) of the city.
A wider appreciation of the industries that will embrace night work may be better suited to Delhi’s purpose. Despite its burgeoning nightlife, for instance, data from London First suggests that London’s transport and storage workers comprised the largest segment of its night-time workforce. To begin the process of scaling up its night economy, it is such sectors that Delhi should turn to. Delhi’s own logistics and warehousing sector, for instance, is growing at a prolific rate, with demand having boomed at a combined annual growth rate of 45% in the three years preceding 2020. There are significant restrictions on the entry and plying of heavy goods vehicles in the city during the day, which the sector relies on heavily, making it an ideal candidate for night time work. A healthy logistics network shall also ensure that there is an uninterrupted supply of goods to other businesses in the night economy. The logistics and warehousing sector, and similar sectors that currently lie at the periphery of Delhi’s vision, may well be what give the initial impetus to its night economy.
By catering to industries with an organic demand for night-time work, Delhi can overcome the hurdle of having to kick-start a culture that is receptive to nocturnal economic activity from scratch. Not only shall this expand the hours during which the city is productive, it shall also normalise staying out at night – an essential pre-requisite to achieving the city’s nocturnal ambitions.
(The author is Manager- Public Policy, Aakhya India. Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited).