Growing Urbanization, Street Vendors and Policy Response


Things must change as soon as possible

The cities and towns in India have come a long way since the time of independence and so is the case with the millions of the poor and vulnerable living or reaching there. The current urban population in the country is estimated at more than 377 million. It is said that the degree of urbanization in India is not so much fast, but the actual number of country’s urban population is next only to China. While the country’s population has increased by 17.64% in 2001-2011, the urban population grew by 31.80% in the same period as compared to rural areas growth at the rate of 12.18 %.

It is also true in Indian case of urbanization that while Kerala, Tamil Nadu, Maharashtra and Gujarat are witnessing rapid urbanization, states like Bihar, Assam and Orissa are far behind in this process. Among the states and union territories, the national capital territory of Delhi is most urbanized with 97.5% urban population closely followed by Chandigarh (97.25%). Over the years, the distribution of urban population in cities has shifted significantly in favor of metropolitan cities which account for close to one-third of India’s total urban population. Another one-third is shared by the cities which have their population in the range of one lakh to ten lakh. The number of cities with a population of more than ten lakh has risen to 35. Mumbai, Kolkata and Delhi have their population in crores. It is also not that only rural-urban migration is fuelling the urbanization. Several other factors are also contributing it , such as natural growth in areas of cities and towns as well as reclassification of rural areas as urban.

Now look at the dimensions of urban poverty…though the definition of poverty in India is very skewed and uni-dimensional, however the latest figures suggest that more than 31% of the Indian urban population is poor and that 25% of the country’s poor live in urban areas. Moreover the census data often reflect inherent problem of uniformity in defining slums, poor record on slums and lack of information on towns with less than 50,000 population and slum clusters with less than 300 population. With growing informalisation of economy and feminization of poverty, the people have started fearing today that this number of urban poor and vulnerable will increase massively in coming future in the absence of a well planned long term strategy. And, this genuine concern throws up the real questions. What are the issues that must not go unnoticed, but are going unnoticed by our planners and politicians in the current era of ‘mega’ urban development?

To understand the factors and issues that contribute to vulnerabilities of urban working mass, we do need to have an unbiased understanding of the Indian retail sector and its composition and contribution.  Everyone considers Indian retail as a formidable pillar of national economy as it contributes 14% to the GDP and has the capacity of employing 7 % of the total workforce. It is the largest source of employment after agriculture. However, it is highly fragmented with 97 % of its business is run by unorganized retailers. While organized retail trade employs approximately 5 lakh people, unorganized retail trade provides employment to nearly 3.95 crores. According to an estimate, total turnover of unorganized retailers comes to about Rs. 7, 35,000 crores.

Street Vending is a major form of retail trade and the street vendors constitute a major mass of retailers.  As per government’s own admission, the total number of street vendors in the country is estimated at around 1 crore. Some studies estimate that street vendors constitute approximately 2 per cent of the population of a metropolis. They represent the unorganized sector of retail industry and stand in sharp contrast to organized retailers like hypermarkets, supermarkets, big retail chains, etc. They contribute immensely to local and national economy, and provide cheap and affordable services to cross sections of society.  And, in performing that, they stand quite independent as they do not depend on government subsidies or private charity. The total employment provided through street vending becomes massive when we consider the fact that they sustain certain industries by providing markets for their products. Many of the goods sold by street vendors, such as clothes and hosiery, leather and moulded plastic goods and household goods, are manufactured in small scale or home-based industries. These industries employ a large number of workers and they mainly rely on street vendors to market their products. In this way street vendors help sustain employment in these industries.

It is indeed ironic that the existing policy and legal environment do not favour street vendors much.  The country has a National Policy for Urban Street Vendors framed in 2004, revised later in 2009.  A Model Draft Bill was also prepared in 2009 and the Prime Minister of India, by a letter dated 04. 08.2009, issued to the Chief Ministers of States and UTs, sought implementation of National Policy for Street Vendors taking into account the Model Bill-2009. However, the government itself has admitted that the implementation has been dismal in several states. A few months ago, the Minister of Housing and Urban Poverty Alleviation Kumari Selja also made a statement in this regard.  In October, 2010, the Supreme Court of India [2010(11) SCALE 36]( dated 08.10.2010)  had also categorically stated the need of law for street vendors as policy failed to protect the fundamental right to livelihood of street vendors.

In last couple of years, the street vendors of the country under the umbrella of National Association of Street Vendors of India (NASVI) struggled a lot to get a central law in their favour. They campaigned on the streets, advocated with the institutions of governance like Ministry of Housing and Urban Poverty Alleviation (MHUPA), approached the National Advisory Council (NAC) and turned successful to the extent that the NAC recommended for central law to Government of India. It is really good news that the MHUPA has initiated the process of drafting the Bill.  The President of India in her address to the Parliament on 12 March, 2012 also announced that her government was working on a central legislation to protect the livelihood right of street vendors.

The policy makers, planners and administrators do need to accord a new deal to street vendors and the new deal is possible only through bringing in an effective and comprehensive central law. Such a law should have key elements like earmarking of two per cent of street space for vending, provisions to protect and promote natural and weekly markets, bringing railway land under the purview of the Act, appellate authority system for grievance redressal, clear procedures for confiscation of goods and eviction of vendors and guidelines for time bound resettlement and rehabilitation in cases of eviction.

Besides putting in place an effective legal framework, the critical needs also include capacity development of urban local bodies and making them responsive and accountable and integrative planning and fund allocation for unorganized retailers like street vendors for setting up vending zones and markets. The government and the RBI are also required to evolve suitable lending policies to enable unorganized retailers to expand and improve efficiencies.  The commercial banks should also introduce loan scheme for street vendors. Running skill development training programs for street vendors and their children is also badly needed.

Lastly, we must not forget that the root of the problems in tackling rising urban poverty in India not only lies in the late realization of the importance of urban development by the state, but also mainly in its endemic confusion to look at urban poverty in the framework of urban development. The problems of the city’s informal settlements have not been seen as the government’s failure to ensure right to shelter and services to the poor. The issues of urban poor have never been on agenda of planning for the city. As a result, even today, the programs and policies for urban development and urban poverty alleviation are conceptualized, formulated and implemented separately. Things must change as soon as possible.

Author: Ranjit Abhigyan

Program Manager, NASVI

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