Unlocking India’s night shift remains a relatively cheap growth reform
| AUTHOR | Anupam Manur |
| DATE | July 15, 2026 |
| CATEGORIES | Economic Policy |
The Economist reports that American cities are appointing “nightlife czars”, officials whose job is to help more people have fun after dark without making the neighbours miserable. Boston, New York, Philadelphia, and around a dozen other cities have all gone down this route. This is not to promote a hedonistic lifestyle (though there is nothing wrong with that!), but it is great economics. New York reckons its nightlife is worth roughly $35 billion a year, and cities are waking up to the fact that a marketplace that is forcefully shut down early is letting go of money.
Takshashila made a version of this argument for India back in 2021, as a post-COVID recovery idea. The logic holds even better now, and for a reason the Americans have also noticed: people are socialising less. Increasing socialising is good for both social harmony and for business revenues. Win-Win.
The heart of the arguments rests on economic freedom and a simple point: almost every daytime activity can be conducted after dark, and business owners are far better placed than a licensing inspector to decide their own hours based on time-demand for their products and labour supply. International city studies put the night-time economy at anywhere from a low-single-digit to a low-double-digit share of city output. The UK’s was around 4% of national GDP before the pandemic; Philadelphia’s has been estimated at roughly a tenth of city GDP. For a dense Indian metro, a high-single-digit share (~8%) is a plausible order of magnitude. Take the frequently cited estimate that India’s ten largest cities generate around $500 billion of output; even a modest slice of that, unlocked or shifted into the evening, runs into tens of billions of rupees of activity, which is equivalent to about one percent of national GDP. This is a back of the envelop calculation, but the the gains are real and the reform is relatively cheap.
Here’s the slightly good news. States are actually moving on this in India. Seven states, Maharashtra, Karnataka, Telangana, Haryana and Delhi among them, now permit shops and establishments to run 24×7, and Maharashtra recently issued a circular clarifying that most establishments may stay open round the clock (funnily, they left out alcohol shops and bars out of this! HA!). One payments firm reported a 60% jump in spending between 10pm and 4am in a single year. It seems that the demand exists, we just need to allow it.
That last phrase matters. The binding constraints are not the market’s; they are the state’s. Extended hours are worthless without late-running metros and buses, well-lit streets, visible policing, and non-negotiably, safety for women who work or move at night. The right division of labour is clear: let businesses set their own hours, and let government do the two things only it can, which is clear the red tape, and supply the civic infrastructure that makes the night navigable.