Mukta Naik

Life just got better for over 10 million street vendors in India when the Indian Parliament passed the historic Protection of Livelihood and Regulation of Street Vending Bill, 2014 in late February 2014. An outcome of the organized advocacy of hundreds of street vendor organizations and federations across India under the banner of The National Association of Street Vendors (NASVI), the policy’s thrust will be to protect vendors from the harassment and evictions that are a regular feature of their daily lives. The Bill is expected to significantly improve the lot of an estimated 200 million Indians who depend on hawking and street vending to earn a living (currently a paltry sum of US$2-7 per day).

The grassroots entrepreneur, often misunderstood

The significance of such legislation is enormous in the Asian context. In most Asian cities, informal activities such as vending are a common survival strategy for unskilled or semi-skilled migrants from rural areas. It costs governments hardly anything to create these informal jobs, yet vendors cheaply and effectively distribute goods and services. Moreover, street vending is an integral part of history and culture across Asia, where people prefer to shop in an informal way and where buying from vendors is a form of socialising, distinct from the rather sterile atmosphere of the modern supermarket.

Organizations supporting vendors work to build acceptance for vending from the economic standpoint, arguing that supporting informal livelihoods is a powerful way to allow the working poor to partake of the benefits of urbanisation that are currently enjoyed by the educated alone. However, it is from this historical and cultural perspective that they seek to empower the working urban poor. Explains Ranjit Abhigyan, Program Manager at NASVI, “Even though vendors choose their means of livelihood owing to a lack of options, they no longer feel denigrated; in fact, they see themselves as grassroots entrepreneurs. We see vendors in two buckets—survivalists and graduates, our effort is to convert the former to the latter.”

Governments are beginning to recognize the economic importance of the informal sector. Urban designers too advocate that street activities like vending are important as they enhance the usability and safety of public spaces in a city. Yet vending is seen as an illegal and undesirable activity. Authorities and vendors clash over licensing and encroachment of public spaces and pavements. Harassment, evictions and rent seeking behaviour on the part of the police and municipal bodies is common. How then do local governments find workable ways to leverage the informal sector?

Partnership with community

Joko Widodo, then Mayor of Surakarta in Indonesia (and now in the running for the President’s job), found himself in a tough spot when he received a flurry of complaints against street vending in the late ‘90s. Learning from previous failed initiatives, he came up with a distinct approach that encouraged the participation of street vendors in finding a solution. In over 50 meetings, he met with associations of vendors and chalked out a plan to relocate them to a newly designed marketplace in Kithilan, Semanggi. The Street Vendor Management Program didn’t stop there though. Through a relaxation of taxes, free trade permits, soft business loans and training in business development, vendors were merged into the formal economy. Working conditions improved and vendors became ‘traders’, experiencing enhanced profits, to the tune of 200-400% among automotive vendors in Semanggi. The government benefited by creating additional employment around the new market. It was now able to collect taxes from the upgraded vendors, destroying the myth that they were unwilling to pay tax. The space created by relocating vendors in Monjari urban park was recreated as a green playing space for children and in this way, elite residents also directly gained from the initiative.

The Municipal Corporation of Bhubaneshwar, India also built a model market with shops to relocate street vendors but the creation of 52 dedicated vending zones including specialised zones for meat, fruits, flowers and footwear has been a particularly successful strategy. Most vendors did not really have to move away from where they were already transacting business. The legalisation of their activities involved the payment of a small fixed trade license fee annually, a more transparent system as compared to the illegal rentals as well as bribes they paid earlier on a weekly basis.

Bhubaneshwar now has visibly cleaner streets. About 67% vendors report increase in customers, 61% report increase in sales and 84% vendors have increased the quantity of stock owing to a more secure location. Women vendors in particular have benefited from the fixed location. The stumbling blocks in Bhubaneshwar were the demarcation of land for the vending zones as well as political interference from local councillors who wanted shops in the model market allocated to non-vendors. Local community organisations played a crucial role in both these instances.

The way ahead

Now with the Vendors Bill in place, cities across India will have to do what Bhubaneshwar did—form a town vendors committee that comprises 50% of street vendors, and with its help, issue vendors licenses to 2.5% of the city’s population and demarcate zones where vending is permitted, not permitted or restricted so as to protect the livelihood of the working urban poor.

NASVI is therefore working with its associates across Indian cities like Lucknow, Kanpur, Ludhiana as well as 42 cities across Bihar to organize vendors as well as support local governments. Recognizing that implementation of a policy like the Vendor Bill is a struggle for municipal and police reforms, they plan to develop an implementation manual to generate awareness among street vendors and also act as an advocacy tool for municipal commissioners and local government bodies. A 5% allocation from the National Urban Livelihoods Mission towards skilling and enterprise development among street vendors is expected to help.

Ranjit sums up with an unequivocal statement on the efficacy of an inclusive approach towards street vendors, “We calculate that, across India, municipal agencies and the police earn around US$ 200 million annually in extortion from vendors! There is a great opportunity here. If we develop integrated cities with stronger linkages between informal workers and urban bodies, there will be a huge benefit to both. It’s a win-win situation!”

Photo 1 by Vandana Rajagopalan

Photo 2 by KenWalker

Photo 3 Prerit Rana

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Categories: Entrepreneurship, Livelihoods