Odisha Cabinet Approves Key Reforms Under Shops and Commercial Establishments (Amendment) Ordinance, 2025
Move aimed at improving Ease of Doing Business, promoting entrepreneurship, and creating more employment opportunities across the state
Bhubaneswar : In a major policy decision aimed at promoting business-friendly reforms and enhancing employment generation, the Odisha Cabinet approved the Odisha Shops and Commercial Establishments (Amendment) Ordinance, 2025 during its 28th meeting held at Lok Seva Bhavan in Bhubaneswar. The Ordinance introduces sweeping changes to the decades-old regulatory framework governing shops and commercial establishments, aligning it with contemporary economic and labour practices.
According to the Labour and ESI Department, the amendments seek to reduce the compliance burden on small and medium enterprises, simplify operational norms, and foster a more conducive environment for entrepreneurs. These measures are expected to boost economic activities, expand job opportunities, and strengthen Odisha’s standing as one of India’s leading states in Ease of Doing Business.
The decision follows the Cabinet’s 27th meeting held on September 29, 2025, where the proposal for amending the Odisha Shops and Commercial Establishments Act, 1956, was initially approved. As the State Legislative Assembly is currently not in session, the Cabinet resolved to promulgate the changes through an Ordinance under Article 213 of the Constitution of India. The ordinance will later be replaced by a formal Act passed by the State Legislature.
The Odisha Shops and Commercial Establishments (Amendment) Ordinance, 2025 introduces several key reforms intended to modernize the state’s labour laws while maintaining a balance between workers’ welfare and business flexibility.
Firstly, the scope of the Act has been redefined to apply to shops and commercial establishments employing 20 or more employees, easing the regulatory load on smaller entities. However, all establishments—regardless of employee strength—must display Odia signboards, ensuring the promotion of the local language and cultural identity in commercial signage across the state.
In a significant reform for workforce management, the daily working hours have been increased from 9 hours to 10 hours, while maintaining the weekly cap at 48 hours. Employees will be entitled to a minimum half-hour rest after six continuous hours of work, ensuring that labour standards remain humane and consistent with national norms.
The Ordinance also increases the permissible limit for overtime from 50 hours to 144 hours over a three-month period, giving businesses greater flexibility during peak operational periods. Workers performing overtime will be paid double their ordinary wages, safeguarding employee interests even as productivity demands grow.
One of the most transformative aspects of the amendment is the freedom for establishments to operate 24×7, 365 days a year. This measure aligns Odisha with global metropolitan business standards and will particularly benefit sectors such as IT, hospitality, retail, and logistics, which thrive on round-the-clock operations.
Additionally, the prohibition on engaging women employees during night shifts has been removed, signaling a progressive shift toward gender inclusivity in the workforce. Women employees can now be engaged in night work with their written consent, provided that employers adhere to state-mandated guidelines ensuring their safety, security, and dignity. This move is expected to expand employment opportunities for women, particularly in industries that operate beyond conventional business hours.
Officials said the reforms represent a strategic step towards transforming Odisha into a more competitive, inclusive, and investment-friendly state. By rationalizing labour compliance, promoting flexible work conditions, and emphasizing women’s participation, the government aims to align its policies with both economic realities and social equity.
The Ordinance reflects the state’s broader economic vision—creating a regulatory ecosystem that encourages entrepreneurship, attracts investors, and enhances the overall ease of doing business while protecting workers’ rights.
With these changes, Odisha joins a growing list of Indian states implementing forward-thinking labour reforms designed to balance business needs with employee welfare—setting a new benchmark for progressive governance and sustainable growth.
