Empower Street Vendors to Get India’s Urban Economy Moving

Context: Government policy attention and public patronage should combine forces to generate millions of roadside jobs in our cities and improve the conditions of street vendors in India.

Role and importance of street vendors in India:

• Reduce the transaction costs of everyday purchases: By making goods and services available at doorsteps or at places that are conveniently accessible.
• Provides employment: Street vending is a form of micro-entrepreneurship that can address the unemployment challenge confronting India.
• Ensure equitable distribution of economic gains: across its production and distribution value chains.

Issues faced by street vendors in India:

• Systemic and institutionalized contempt: With urban planners focusing on building cityscapes that are attractive for investments, street vendors experience contempt.
  • Most urban planners see street vendors as a nuisance, and they adopt a ‘tolerate, regulate and evict’ approach in dealing with them.
  • For e.g. they are subjected to harassment by police and local governments.
• Poor implementation of the law: Ground level implementation of India’s first law- Street Vendors Act, 2014, which legally recognized street vending as a profession, has remained patchy. 
  • Lack of institutionalized support: results in a market failure that needed to be addressed through government intervention.
• Impact of COVID: The pandemic has exacerbated the condition of street vendors; most of them exhausted their savings to survive, with many forced to enter a steep debt cycle. 

Way forward:

• Address market failure on credit availability: through efficient implementation of schemes like PM SVANidhi.
  • Under it, street vendors are provided with a micro-credit facility is designed to enable them to jump-start their commercial activity.
  • 2 million vendors have availed of this credit facility, with 40% of them being women.
• Need for robust public patronage: To achieve their full potential and such patronage would build a strong business case for their growth
  • For e.g. In the 1970s, food trucks in the US, largely run by poor Americans, started receiving strong public patronage. 
    • According to the US government census, sales from food trucks increased by 79% between 2012 and 2017.
    • In 2018, mobile food service businesses reported an average annual payroll of $20,872 per employee, compared to $19,777 for all legal forms of organization.
  • Similarly, in Chengdu (China), pro-street vendor policies created 100,000 jobs and increased interest in micro-entrepreneurship.