Photo credit: Meena Kadri

What Indian economic phenomenon is at once marginal, even illegal, and enormously independent and entrepreneurial? That would be the street vendor, the small capitalist of the poor, and reservoir of off-the-books penalties that grease the machine of every municipal authority and police station in urban India.

There are an estimated 10 million street vendors (another term is the more pejorative “hawkers”) in the cities of India, functioning mostly in breach of a host of urban laws governing licensing, selling and zoning — and challenging bourgeois ideas of what a metropolis should look like. Street vendors have long battled to be recognized as a professional guild, not a shadowy underclass. Earlier this month, after more than a decade of agitation, the National Association of Street Vendors won a significant victory when the Lok Sabha, the lower house of parliament, recognized the rights of street vendors by passing the Street Vendors Bill, 2012.

The measure acknowledges that street vending is an economic reality that works to the advantage of both sellers and consumers, providing productive employment for many and cheap goods and services for the urban poor. The law contains several significant provisions designed to bring street vendors into far less ambiguous legal and economic terrain, and attempts to break down the high wall that currently divides them from city municipal corporations and resident associations.
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When the big picture on India’s economy is taken into account, it is pragmatic, as well as just, to not expose street vendors to the levels of harassment they currently face, and to bring them into the tax system and the ranks of the urban citizenry. After all, they are the stars of India’s vast “informal economy” — those without contracts, social security or employer benefits — inhabited by more than 80 percent of the country’s 450 million workforce.

It is beyond the capacity of any government, or of Indian business, to integrate into the formal sector such a large pool of what classical economics would call “reserve labor” — a group that is growing at a rate of 1 million people a month. Street vendors, by contrast, can claim to be a class of 10 million workers who generate employment for themselves and value for the poor around them. An essential, if underacknowledged, part of the story of Indian capitalism, street vendors have long deserved a new deal from the Indian state, and at long last they’ve got one.

Source: Bloomberg