Law and Poverty Project – Street Vendors

Part I: Background

The urban poor have traditionally survived by working in the informal sector. It requires marginal capital input and low skill levels. This situation was exacerbated post liberalization in 1991 as a large number of factories and establishments were shut down due to rationalization and consequently thousands of workers lost their jobs. [1] Besides in the last decade or so the jobs in the organized sector have been shrinking and even skilled individuals are facing a problem. [2] Hence, individuals are increasingly turning to informal sector jobs like street vending. It is estimated that street vendors constitute approximately 2% of the population of a metropolis. [3] The total number of street vendors in the country is estimated at over 1 crore. [4]

Role of Street Vendors

The role-played by the hawkers in the economy as also in the society needs to be given due credit. They are a form of convenience for the urban poor and middle class providing them daily necessities at cheap prices at an accessible place and time. Infact studies show that lower income groups spend a higher percentage of their income in making purchases from street vendors. [5] This is primarily because their goods are both affordable and easily accessible. Thus, street vending is an illustration of one segment of the urban poor subsidizing the necessities of another segment. [6]

In certain urban areas they have been unofficially legitimised with the urban local bodies charging them with a fee. However, they are treated as unlawful entities and are subjected to continuous harassment by the police and civic authorities leading to a violation of their fundamental rights and directive principles of state policy under article 19(1)(g), article 21 and article 39 (a) and (b). This points to the pressing need for the State to intervene and regulate this space.

Regulation: Insurmountable Hurdles?

Delhi has 3,00,000 street vendors while Mumbai has over 2,50,000. [7] The average earnings of these vendors are between Rs.40 and Rs.80 per day. [8] Women engaged in this trade earn even less in comparison to their male counter parts. Studies by SNDT University, Mumbai and ILO show that a large section of these vendors suffer from ailments related to stress and overwork such as hyperacidity, migraine, hypertension, loss of sleep, etc. [9] These entrepreneurs work in a constant state of fear and anxiety of being evicted.

Rent seeking is high, and in a study conducted it was found that street vendors pay as much as Rs.600 crore and Rs.400 crore respectively in Delhi and Mumbai as bribes to police and local authorities. [10] Legalisation of street vending would lead to a loss of revenue for these corrupt officials and hence there seems to be a lack of political will from within the system to change the status quo. Additionally, resident associations of the upper and middle classes are against the legalising of street vending and given their considerable influence have been able to exert pressure on the authorities against the same.

Legalisation of street vending is contrary to the vested interests of powerful groups. This would explain the historic reluctance of the executive and legislature to adequately regulate this space.

Part II: ‘Irregular’ Regulation of Street Vendors by the State Organs

Until recently, street vendors existed in a rights vacuum. Intermittently, we are witness to a few Supreme Court rulings endorsing the role of street vendors and their rights under article 19(1)(g). The court has stated that if properly regulated these street vendors can add to the convenience of the general public and they have the right to carry on trade or business as per article 19(1) (g) of the Constitution.

The executive has after much coaxing from the judiciary and rights activists taken infantile steps towards regulating this space. More recently the Ministry of Urban Employment and Poverty Alleviation has drawn up two policies- the National Policy for Urban Street Vendors of 2004 and 2009 and a model legislation, the Model Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2009.

The researcher is of the view that it is due to neglect by the executive and legislature to regulate this space the onus has repeatedly fallen on the judiciary to make detailed directions in this regard.

Judicial Intervention

In 1989, the Supreme Court ruled in favor of a common street vendor and his fundamental right to vend his garments at Janpath in New Delhi. [11] Sodhan Singh brought a public interest litigation before the Supreme Court that frequent evictions and confiscation of his goods violated his fundamental right to carry on business and trade as guaranteed by article 19(1)(g) and right to life and personal liberty under article 21. The court acknowledged the role that these small traders play in adding to the comfort and convenience of the general public by offering articles of everyday convenience at a comparatively lesser price and at convenient locations. The court recognized the right of street vendors to carry on their trade and business under article 19(1)(g) subject to certain reasonable restrictions as stated in article 19(6). The court cautioned that this right should not be denied on the ground that the streets are meant exclusively for passage. However, at the same time the court stated that vendors do not have a fundamental right to occupy any place permanently and they can have temporary arrangements without disrupting rights of other people.

This judgment was a break through as for the first time we see street vendors being cast in a affirmative role and a recognition of their right to use public spaces. However, the recognition of the rights of street vendors seemed to have no visible impact on the behavior of local authorities towards them.

The 1985 case of Olga Tellis [12] is not directly relevant to street vendors, however, it does point to dejure recognition of the governments duty to provide an affected impoverished class with rehabilitation. Here the court held that though the slum dwellers do not have a right to erect permanent structures on the roadside, they are entitled under article 21 to rehabilitation by the government keeping in mind their right to livelihood. Hence, we see not the recognition of a fundamental right to housing but of the right of access to livelihood.

In the cases of Bombay Hawkers Union v. BMC [13] , the Supreme Court enumerated certain guidelines for the government as well as for the vendors. The vendors were prohibited from erecting any permanent structure and were to cooperate with the local authorities to keep the public spaces clean. The court suggested that the government should create hawking zones. In Gulamali Gulamnabi Shaik v. Municipal Commissioner [14] , the Supreme Court instructed the government to design a framework to regulate street vendors by issue of licenses and demarcation of space for them to ply their trade. Municipal Corporation of Delhi v. Gurnam Kaur [15] has emphasized the need for the creation of hawking zones to achieve the dual goals of a cleaner city and reduced congestion on roads.

Response of the Executive

In 1998, the National Alliance of Street Vendors of India (NASVI) was formed in Ahmedabad at the initiative of SEWA. In 1999, NASVI conducted a survey on street vendors in seven cities. Based on this data the NASVI and Ministry of Urban Development organized a workshop. It is at this workshop that the first National Task Force on Street Vendors was set up with the mandate of drafting a National Street Vending Policy. [16] The policy was drafted by late 2002 and finally accepted by the union cabinet in 2004. [17] At this juncture national elections were called and the Manmohan Singh led Congress government came to power. They were receptive to the need for a national policy and the National Commission on Enterprises in the Unorganised Sector was entrusted with the task of finalizing the policy and drafting a model law.

Recent Developments

In October 2010, the Supreme Court delivered the Genda Ram v. Municipal Corporation of Delhi [18] judgment which though recognizing the right of the street vendors under article 19(1)(g) also emphasized the reasonable restrictions available under article 19 and the parallel right of commuters to move freely on roads as per article 19(1)(d). The court stated that this space should not be regulated under fluctuating schemes of the court just because the vendors are impoverished and powerless. Hence, the court has directed the government to pass the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2009 [19] by 30 June 2011. This direction raises critical questions about the functioning of our democracy and the value of judicial activism, which will be addressed in Part IV of the paper by the researcher.

Given this direction it becomes imperative for us to analyse the Bill and understand the implications of enacting it as in its current form. The bill does not include key recommendations made in the National Policy for Urban Street Vendors by the National Commission on Enterprises in the Unorganised Sector. The researcher will highlight these omissions and their implications. Besides that she will analyse the Model Bill on five broad criterions: institutional structure and it’s viability, substantive rights provided, enforcement mechanism, procedural mechanisms and public value created by this Bill. This Bill does not seem committed to empowering the street vendors and ensuring that they are no longer faced with impoverishment due to the failure of the state.

Part III: Analysis of the Policy

The National Policy for Urban Street Vendors was drafted in 2004 and the Ministry of Urban Employment And Poverty Alleviation made a marginally modified version available in 2009. These policies seek to guarantee that urban street vendors find recognition for their contribution to society. It is envisaged as a mechanism for urban poverty alleviation by providing support to dignified livelihood. It is based on these policies that the Model Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill 2009 has been formulated. In this chapter the researcher will analyse the objectives of the policy and the mechanism detailed for their implementation and the manner in which they have been translated into the model Bill.

Definition

The policy defines a street vendor as a person who offers goods or services for sale to the public without having a permanent built up structure but with a temporary static structure or mobile stall or head load.

The Bill puts forth a more detailed definition of street vendors in section 2(1)(j):

“A person engaged in vending of articles, goods, wares, food items or merchandise of everyday use or offering services to the general public, in a street, lane, sidewalk, footpath, pavement, public park or any other public place or private area or from a temporary built up structure or by moving from place to place and includes hawker, peddler, squatter and all other synonymous terms which may be local or region specific; and the words “street vending” with their grammatical variations and cognate expressions, shall be construed accordingly.”

The researcher is of the view that this is a wide and all encompassing definition. Certain key features of the definition are:

Street vendors are entitled to sell any good or offer any service to the public without any restriction.

It is interesting that the definition entitles street vendors to ply their trade in any ‘public place or private area’. It will be interesting to see how the judiciary will construe the term ‘private area’. How will this be balanced against an individuals limited legal right to property as recognised by article 300 of the Indian Constitution? The conditions under which private places can be designated as vending zones has been left to be determined by the appropriate government via a scheme. [20] Can the relevant authority designate a private space as a ‘vending zone’ as defined by section 2(1)(l) [21] ? It seems unlikely that ‘any such space’ could be stretched to include a private space if the principles of ejusdem generis.

The definition points to need for an expansive approach to identifying an individual as a street vendor.

Legal objectives

The policy aims to give street vendors legal status by amending, enacting, repealing and implementing appropriate laws. The policy states that no street vendor can be forcefully evicted. If eviction has to be carried out to serve a public purpose various guidelines to ensure adequate remuneration have been enumerated in the policy. It is noteworthy that there is no mention of these safeguards in the Bill; as per section 3(1)(n) the appropriate government is to frame the relevant guidelines.

To fulfill this objective of giving street vendors legal status the policy suggests the amendment of certain laws. Section 283 of the Indian Penal Code punishes the nuisance of causing danger or obstruction in public way or the line of navigation. Similarly, section 34 of the Police Act makes obstruction in any street or public place punishable. The policy highlights that these two provisions create the contradiction between a legal ‘licensed’ vendor and ‘illegal’ obstruction or causing nuisance resulting in physical eviction of even licensed vendors. The policy recommends that central government and all states should amend these laws by adding a rider as follows: “Except in case of street vendors /hawkers and service providers with certain reasonable regulations”.

The Bill does not indicate any move towards this direction. It would possibly be ambitious to expect such a mention in the text of the Bill. Perhaps at the time of passing this legislation, the Parliament will undertake the required amendments to the above-mentioned laws.

Provision of facilities

The policy seeks to ensure that the street vendors are treated as an integral part of the urban distribution system by:

Providing legitimate hawking zones in urban development/ zoning plans

Providing allied facilities

Provision of hawking zones

Following the Supreme Court orders, some cities drafted guidelines for regulating urban vending activities. However, these guidelines do not recognize the fact that the demand for the vendor’s wares/ services is highly specific and varies with location and time, i.e. presence of natural markets. To overcome this problem the policy suggests that:

The demarcation of hawking zones should be city/town specific.

The natural propensity of the street vendors to locate in certain places at certain times in response to patterns of demand for their goods/services should be taken into account.

City authorities should provide sufficient spaces, designated as ‘vendors markets’ in layout plans.

Locations should not be designated as ‘no-vending’ zones for frivolous reasons. The public benefits of declaration of a no-vending zone should clearly outweigh the potential loss of livelihood that it would involve.

Section 2(1)(b) defines ‘holding capacity’, while section 2(1)(l) defines vending zones; both are subject to designation by the planning authority. The determination of norms for the earmarking of vending zones has been left to the planning authority. [22] There seem to be no guidelines as to how this demarcation will be undertaken and whether the principle of natural markets will be adhered to. If the local authorities situate the vendors in areas that are not natural markets it would adversely impact the livelihood of the vendors.

Creation of a Town Vending Committee

The policy notes that the designation of vendors markets / no-vending zones should not be left to the sole discretion of any civic or police authority. It must be accomplished by a participatory process such as a Town Vending Committee. The policy prescribes the membership of the Committee. It also states that the hawker’s representatives should preferably constitute atleast 25% to 40% of the total number of members of the Committee. Some of the suggested functions of the Committee are:

Ensuring that the space allotted for vendors’ markets are consistent with formation of natural markets.

Framing quantitative norms, i.e. amount of space to be provided for vendors’ markets after proper surveys.

Framing qualitative guidelines, i.e. facilities to be provided at vendors’ markets by the civic authorities.

Monitoring the hawking activity of a particular ward.

The Bill allocates the responsibility of identifying and designating vending zones, specification of specific timings for vending, determination of quantitative norms for various categories of vendors, assessment of holding capacity and identification of vending zones as restriction free, restricted or no vending zones to the Town Vending Committee. [23] The planning authority has the responsibility to monitor the functioning of the Town Vending Committee with regard to the planning norms. [24] The problem is that section 9 makes the allocation of this responsibility by the appropriate government to the Town Vending Committee optional. The strength and effectiveness of the institution would be determined by the amount of authority the government chooses to empower it with. Given the disinclination of powerful groups towards the legitimization of street vendors, it is unlikely that the Town Vending Committee will be able to emerge as a strong empowered institution.

Regulation

The policy envisages three modes of regulation:

Licenses: The policy seeks to avoid imposing numerical limits on access to public spaces by discretionary licenses.

Registration: The policy discusses the registration of all vendors in each city.

Self compliance

Licenses

Traditionally issuing licenses to vendors was seen as an instrument to give them ‘legal’ status, in an environment where urban vending is illegal under various laws. The policy observes that numerical limits to such licenses were justified on the grounds of avoiding congestion in public places. However, this has given rise to an elaborate regime of rent seeking. The policy discusses a nominal fee-based regulation of access. This would allow market forces like price, quality and demand to determine the number of vendors that can be sustained.

Under the Bill the mode of grant and revoking of licenses has been left to the appropriate government. [25] There is scope for continued abuse as the granting of licenses on payment of a fee has been left to the local authority and the Town Vending Committee has been excluded from the process. [26] The involvement of the Town Vending Committee would have made the entire process of granting licenses fairer, transparent and more effective.

Registration System

The policy suggests that the power to register would be vested with the Town Vending Committee. Vendors should be registered at a nominal fee to be decided by the Committee based on any reliable means of identification. This will ensure a direct linkage between the urban local bodies and hawkers for collection of registration fee, monthly maintenance charges, fines, etc.

Chapter IV of the Bill is devoted to the ‘Registration of Street Vendors’. The Bill states that the appropriate government may assign the granting and revoking of registration of certificates to the Town Vending Committee. [27] If the government does not assign this responsibility to the Town Vending Committee it will render it without teeth. Neither does the Bill does recognize the possibility of collection of a fee for registration. [28]

Self-Compliance

The policy underlines the need to promote self-compliance amongst Street vendors with regard to:

Hygiene and quality control

Scale of operation: Overuse can cause complications. Therefore, hawkers should respect the quantitative norms as a measure of self-regulation.

This has not been specifically addressed in the Bill; however, the authority to declare norms for maintaining public health and hygiene has been given to the appropriate government. [29] Additionally, the responsibility of ensuring that the standards laid down are maintained has been left to the Town Vending Committee. [30]

Organization

The policy promotes organizations of Street vendors to facilitate their empowerment by provision of access to group insurance/ social security, financial services/ housing and vocational training and capacity building for awareness as well as skill up-gradation/ development of small and medium enterprise

The policy emphasizes the need for insurance given that street vendors are part of the unorganized sector and hence are extremely vulnerable. In addition it points to a pressing need to provide them with social security. The policy suggests that the contributory system would be the most appropriate for these vendors. Two modes are available to collect contributions: collection of the contribution of street vendors by the registration office on monthly basis or by the street vendors’ unions assisted by NGOs or self-help groups. The policy also suggests the need for a special insurance scheme to cover the vendor’s products.

With regard to provision of financial services the policy recognizes that since the street vendors are a part of the unorganized sector they have little access to credit from the formal sector financial institutions. Thus, they have to depend on private moneylenders and are subject to high interest rates. The policy also discusses the possibility of the Vendors’ Associations being assisted by NGOs. In addition it also envisages assistance under the SJSRY Scheme [31] by SHGs to help create a financial interface between the vendors and formal sector financial institutions. This will allow vendors to gain access to credit not only for income generation but also for housing.

The policy also points out the importance of skill upgradation for micro entrepreneurs like street vendors. Emphasis is laid on upgrading technical and business skills. This will help the vendors increase their income as well as to look for alternatives forms of enterprise.

All of the above has been addressed in the Bill in a cursory manner. As part of the functions of the Town Vending Committee it is supposed to promote awareness about credit through institutional mechanisms, determine the terms and conditions for provision of insurance, maternity benefits and other social security schemes, lay down guidelines for organizing associations and self help groups of street vendors, as also conducting of training programs for them. [32]

The implementation of these complementary programs would essentially hinge on the proactive nature of a given Town Vending Committee. Given that forty percent [33] of the Town Vending Committee is to be comprised of street vendors a lot would hinge on their initiative.

Rehabilitation of Child Vendors

The policy emphasizes the need to take measures for promoting a better future for child vendors. It suggests the achievement of the same by making appropriate interventions for the rehabilitation and schooling of such child vendors. The policy prohibits the issue of a vendor identity card to a child below 14 years for conduct of business.

The Bill clearly states that one can be registered as a street vendor only on the completion of eighteen years. [34] However, nowhere in the Bill is any reference made to the rehabilitation of the existing child street vendors, as was recommend by the policy.

Major Flaws

Based on the above discussion, the researcher will underline three basic issues, which the Bill ignores:

Preservation of natural markets: The markets are located where customers find them useful. Consequently, one finds street vendors outside railway stations, hospitals, temples, and bus depots where people find it convenient to but daily necessities. The policy underlined the importance of keeping these natural markets intact. Unfortunately the Bill does not refer to this principle as discussed above.

Licenses: The policy suggests regularizing the existing street vendors by issuing licenses and then accommodating new vendors as required. The Bill does not recognize the rights of existing vendors, possibly leaving open enormous room for abuse of discretion by the local authorities and spur rent seeking activities. Additionally the issue of licenses has been assigned to the local authorities and the Town Vending Committees have been left out of it.

Eviction: The policy emphasized that eviction should be an action of last resort and a procedure was suggested for eviction. Such a provision is imperative to protect the rights of this powerless section of society. As in the absence of regulation the local authorities can evict street vendors indiscriminately.

In terms of substantive rights, the Bill comes up empty, with most issues being left to the executive to implement via schemes. This is a recurrent problem faced with the contemporary legislation. The institutional structure of Town Vending Committees though mandated to be set up could be rendered ineffective if the appropriate government decides in its discretion not to assign the suggested responsibilities to the Committee. Enforcement in terms of penalties has been detailed in an entire chapter- Chapter VII. Clearly penalties have more relevance than rights in our society! The procedural mechanism has some good and some bad. Registration is dealt with comprehensively in Chapter IV and more importantly it has been laid down that the principles of natural justice have to be adhered to. An application for registration cannot be rejected without a hearing. Unfortunately, when it comes to licensing the Town Vending Committee has been excluded and from this process and neither has the suggestion of a fee-based issue been acknowledged. In terms of public value that this Bill would add if enacted, the researcher feels that it is certainly a step forward in the direction of effective regulation however, lack of enumeration of strong rights for street vendors, its practical value if questionable.

Part IV: Underlying Theme

Judicial activism has borne the brunt of much criticism. This criticism is based on the well-founded notion of separation of powers, that every organ of state is structured in a manner so as to efficiently process certain kinds of information. The moment one organ encroaches into the domain of another the transaction costs are higher and the outcome is inefficient.

In the present context, the judiciary has repeatedly been called upon to regulate street vendors. This is the prerogative of the executive and legislative branches of the government. However, due to their continued inaction the responsibility of regulating this space has been thrust upon the courts and they have endeavored to regulate this area by means of judicial schemes. This is an instance of judicial activism. Given the criticism, should the court in such a scenario refuse the nation’s citizens who come knocking at their door saying the executive and legislature may have failed you, however, it is beyond my power to provide you justice? In this part,