Street Vendor: A Dark Horse In Strengthening India's Informal Economy
SME World|October 2019
Street Vendor: A Dark Horse In Strengthening India's Informal Economy
'Street vendors' are often harassed for number of reasons. They are accused of encroaching pavements, creating traffic problem and illegal trading activity.
Sumitra R

The local bodies also confiscate their precious assets –'trading merchandise' acusing them for violating norms. In most cases, the vendors have to take substantial loan from private lenders to recover the confiscated goods or to restart their business at a hefty cost. Moreover, they have to regularly bribe the authorities to carry out business on the streets. A substantial portion of their income is spent on bribing, repayment of loans taken from moneylenders.

Street Vending – Opportunity for the unemployed and illiterate

Lack of employment opportunity for less skilled people, uncertain livelihood in rural areas, have forced significant portion of population to opt for street vending activity. They lack requisite skill and knowledge required to work in formal sector. Compared to other means of livelihood, the investment in street vending is less and process to start business is very easy.

This section of society contributes to the survival of other section. Several studies show that, a large segment of urban population – mainly the lower income groups and urban poor buy their merchandise from their street vendors as the price are reasonable in the absence of any overheads.

Vendors are contributors to the growth of small business segment. They help in the survival of nano enterprises whose products are often marketed by the vendors. A lot of merchandise that are sold by the street vendors like snacks, moulded plastic goods and households items are manufactured by nano enterprises or home based business units. These business units employ large number of workers as they operate with limited capital and cannot afford to use modern technology. These units also suffer from inability to market their products on their own. The street vendors help them to sell their products to the end users. Though the vendors are considered as 'problem for a good governed state' but they are indeed 'panacea for several problems'. The authorities ignore their contribution to economic cycle of society.

The Debt Trap

Apart from the challenges of bribery, displacement and uncertainty about turnover, there are other key challenges such as storage, source of finance and business cycle. Finding place of storage is a big problem for street vendors. They have to either store the merchandise at their house or at the vending place. Jassuben, a street seller of savouries in Gandhinagar, said that she carries the unsold items to her home because she fears that storing at any vending place made lead to theft or damage to the items. Though in some places storage facility is available but at a cost high rent. Authorities do not provide a storage facility to the street vendors.

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October 2019