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Lok Sabha passes Street Vendors Bill 2012
Posted On: 30-09-2013 00:00:00 13

As per a report in the Mint, there are an estimated 10 million street vendors across India. In order to bring this community into the economic mainstream the Lok Sabha has passed the Street Vendors Bill 2012. A few of the measures that are envisaged by the bill include:

Every city municipal corporation will be required to form a "Town Vending Committee" made up of the municipal commissioner and representatives of local planning authorities, resident welfare associations and street vendors themselves. Every person intending to become a vendor would have to apply to the committee for a certificate and a location. The new rules allow street vendors to participate, through their representatives, in municipal decision-making and will save them the perpetual threat of eviction and confiscation of goods.

Second, the bill requires all city municipal corporations to undertake a survey of street vendors and to make room for them in a town plan, up to a number amounting to a maximum of 2.5% of the local population.

The bill is one of the first pieces of legislation in India to make a place for the claims and needs of the street vendors in urban plans. The article quotes an observation based on a seven-city study of street vendors in India to validate the space allocation: “Vendors depend on an estimated 2% of urban land, but these sites are mostly legally barred to them. The seven-city study found that only Bhubaneshwar and Imphal made provisions for street vendors in their city development plans, but these were absent in the plans for Delhi, Patna, Bangalore, Mumbai, Ahmedabad and Kolkata. The plans earmark spaces for hospitals, parks, offices, residential colonies, and bus and rail terminals, but neglect that around all of these, vendors naturally congregate, and these vendors provide essential services to people at low costs. The urban plans provide for malls and covered shopping arcades, but the imagination of town planners and officials excludes all shops which are run by the poor, for the poor.”

Thirdly, town plans will need to "ensure that the provision of space or area for street vending is reasonable and consistent with existing natural markets." This means that street vendors can’t just be picked up and "relocated" to some distant zone. Rather, space must be made for them in those urban neighborhoods where they are usually found.
Some Indian federations of traders have opposed the law, arguing that street vendors are able to supply goods and services at a cheaper rate because they don’t pay taxes. But street vendors do pay a kind of tax, only these levies don’t go into state coffers. To support this point the articles quotes from a 2006 essay written by Sharit Bhowmik, the Indian scholar who has overseen empirical work on the lives of street vendors : “ The non-official/illegal status of street vending along with low levels of unionization has given rise to an alarming rate of rent seeking. [One] study on street vendors...found that they pay between 10 to 20% of their earnings as rent...Legalizing the profession and encouraging trade unions are the means through which rent seeking can be reduced. The local bodies should levy taxes on street vendors which would increase the revenue of these bodies. But these are also the precise reasons why the authorities may resist such moves they stand to lose out on their extra income through bribes.”

Net, net, the measure acknowledges that street vending is an economic reality that works to the advantage of both sellers and consumers, providing productive employment to a large population, and at the same time allowing for cheaper goods for the urban population. Kudos to the government for finally enacting this bill.


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