Himachal pradesh government notifies mukhya mantri laghu dukandar kalyan yojana (urban), rural was notified in 2023

Himachal pradesh government notifies mukhya mantri laghu dukandar kalyan yojana (urban), rural was notified in 2023

Blogs
December 29, 2025

Compliance Insight | State Law Focus

Shops & Establishments Act Is a State Subject

Why Shops & Establishments compliance is local by design, and how a Himachal Pradesh welfare scheme reinforces the role of state-led governance for small businesses.

Core Principle

State-Specific Law

Each State/UT frames its own SEA

Coverage

Shops and Offices

Commercial workplaces (non-manufacturing)

Why It Matters

Local Rules, Local Reality

Hours, leave, records, protections

Why SEA Is a State Subject

The Shops and Establishments Act is positioned as a State Subject, in the sense that each State / Union Territories in India, has the power to enact its own laws for Shops & Establishments to function and flourish in their respective States.

This is the only Act that allows for implementation of localized rules and compliance requirements to run businesses as per the nature, type and characteristics of each State.

Under the definition of establishments, it clearly specifies what is shop, office, commercial establishments, and other workplaces, leaving out manufacturing establishments as they fall within the purview of factories act.

This is so because working hours, overtime, rest period, intervals, leave, child labour, women rights and protection, etc. get regulated under this Act.

There are broad similarities amongst the acts for various states, the specifics differ from state to state. Unlike the Factories Act, there is no central labour act for shops. Each of the states has its own Shops Acts based on a model code.

HP Update: Mukhya Mantri Laghu Dukandar Kalyan Yojana (Urban)

The Department of Urban Development, Government of HP, on December 17, 2025 issued the Mukhya Mantri Laghu Dukandar Kalyan Yojana (Urban).

The Government has notified the “Mukhya Mantri Laghu Dukandar Kalyan Yojana – Shahri “, a new welfare scheme for small urban shopkeepers and vendors to provide financial relief and support for business development.

One-Time Settlement (OTS) Facility

The Scheme offers a one-time settlement (OTS) facility through Banks for small shopkeepers declared Non Performing Assets (NPA) where the State Government will settle up to Rupees One Lakh of outstanding dues on behalf of eligible beneficiaries with an annual turnover below Rupees Ten Lakhs. In cases where outstanding dues exceed Rs. 1 lakh, the beneficiaries will have to deposit the remaining amount themselves. However, the maximum loan amount availed by any beneficiary should not exceed Rs. 10 lakh. The chief minister said the scheme has been designed with a strong focus on transparency and ease of access.

Scheme Objective and Financial Support

The HP Chief Minister said that this welfare scheme had already been implemented in rural areas since 2023, which has now been extended to urban areas as announced in the Budget 2025-26. It applies to various categories of urban small businesses (example tea stalls, garages, tailors, grocery stores, street vendors, etc) who have availed business loans up to Rupees Ten Lakhs and helps them clear their debts and revive their livelihoods.

The Scheme includes eligibility criteria, application procedures, documentation requirements, and IT based administration and aims to empower small entrepreneurs, reduce debt burden and strengthen the local economy in Urban areas of Himachal Pradesh.

The hon'ble Chief Minister of HP said a large number of traders in urban areas earn their livelihood through small businesses. However, these businesses often lack financial capacity and access to institutional support. “Due to financial stress, many of them were unable to repay bank loans and their accounts turned into Non-Performing Assets (NPA). Keeping this in view, the state government has decided to extend this welfare scheme to urban areas,”

Coverage Window and Exclusions

The CM said that the Laghu Dukandar Kalyan Yojana would apply to collateral-free business loans taken between April 1, 2020 and March 31, 2025.

Cases involving wilful default, fraud or malfeasance would not be covered under the scheme. Banks would identify such cases to ensure that only deserving beneficiaries get the benefit. Loans covered under the Credit Guarantee Fund Trust for Micro and Small Enterprises or other guarantee trusts would be eligible only if the remaining uncovered amount is less than Rs 1 lakh.

Eligibility Criteria (Shahri)

Applicants must be permanent residents of Himachal Pradesh state, he/she must be at least 18 years of age, and no family member of the applicant should be in regular government service.

Applications would be submitted to the concerned urban local bodies (ULBs) which would verify and forward them to banks for further processing. Banks would submit monthly OTS claims through a nodal bank to the urban development department (UDD). However it is worth mentioning that, no processing or administrative fee would be charged from the beneficiaries.

Key Features Regulated by Various States Under SEA

Working Hours and Overtime

The SEA regulates the number of working hours for employees, usually capping the daily limit to 8-9 hours and weekly hours to 48 hours. Overtime compensation is mandatory for hours worked beyond this limit.

Rest Intervals and Holidays

The Act prescribes rest intervals during working hours and mandates the observance of weekly holidays, national holidays, and religious holidays, depending on state laws.

Leave Policies

Employees are entitled to annual leave with wages, casual leave, sick leave, and maternity leave as per provisions outlined in the Act. For example, Delhi’s SEA specifies a minimum of 15 days of earned leave for every year worked, in addition to casual and sick leave entitlements.

Prohibition of Child Labour

The Act strictly prohibits the employment of children below the age of 14 years in commercial establishments, aligning with international labour standards set by the International Labour Organization (ILO).

Maternity Benefits

Female employees are entitled to maternity benefits, including paid leave, under the SEA, in compliance with the old Maternity Benefit Act, 1961.

Wage Payments and Employment Records

The SEA mandates timely wage payments and proper documentation of employment terms, including wages, working hours, and leave records. Establishments must maintain a register detailing all employee-related data, which can be inspected by labour officers.

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Himachal pradesh government notifies mukhya mantri laghu dukandar kalyan yojana (urban), rural was notified in 2023