Chief Minister Pinarayi Vijayan said at a high-level review meeting that the existing system of allowing shops to function based on Test Positivity Rate was affecting the public.
The chief minister reportedly told the participants of the meeting that comprised of health experts to figure out an alternative and file a report by Wednesday.
It is understood that the government is planning to let the district collectors decide on imposing restrictions locally.
Earlier in the day, the Kerala Vyapari Vyavasai Ekopana Samithi had moved the High Court of Kerala seeking permission to open all shops on all days.
The Samithi has petitioned the court to advise the government on reconsidering its existing stance on the functioning of shops.
The Samithi had recently decided to violate the government's restrictions by opening up all establishments on August 9 as a mark of protest.
Office-bearers of the Samithi have claimed that the restrictions are affecting their business in the run-up to the festival of Onam that falls on the third week of August.