Street Vendors: Some Hardship with Some Hope

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Street Vendors: Some Hardship with Some Hope

Image Source: The Hindu

Around the world, street vendors are an important yet often overshadowed component of the urban economy. They support themselves and others with little capital by selling low-cost goods and services to millions of citizens daily. Despite their significant contribution to the local economy, street vendors are often poor, discriminated against, and neglected, and they lack legal protections, which worsen their situation. This article focuses on the various financial challenges street vendors face, the causes of their marginalisation, and the reforms that can improve their situation.

Most of the vendors are without stores or government licenses and rely on one-on-one cash transactions. Around 10 million people work as street vendors in India alone, making up a big part of the unorganised sector.

Legal Insecurity and Informality

The absence of legal recognition is one of the most revealing economic problems facing street vendors. They do not have vendor licenses or identity cards issued by the urban local bodies because they are working in the unorganised sector. As a result, they are susceptible to:

Status as a refugee and abuse by police and local authorities, requests for bribes and needs under threat of removal and confiscation of their property, frequently without payment.

Vending is not regarded as a legitimate business activity in any major city, but rather as an invasion of public space. Even with the implementation of progressive laws like the Street Vendors (Protection of Livelihood and Regulation of Street Vending), vendors are out in the open, and this creates unpredictability in their revenues and does not lead to long-term investment in their businesses.

Unreliable and Insufficient Income

Most street vendors lead a hand-to-mouth existence, making just enough money each day to get by. Their pay is determined by:

  • Foot traffic from customers, which can vary depending on the weather, neighbourhood activities, or modifications to city planning.
  • Stock availability, which may be vulnerable to supply chain problems, mobility, and health, since family problems or illness would lead to lost income.
  • Vendors lack pensions, paid holidays, and job security in contrast to formal employees. They might not be able to purchase stock for the following day due to their low income, which would keep them trapped in a cycle of dependency and poverty.

Restricted Availability of Financial and Credit Services

Generally speaking, street vendors are unable to obtain formal credit channels such as bank loans, credit cards, or electronic payment systems. Banks view them as high-risk since they lack collateral, proof of residency, and income certificates.

Consequently, most of them turn to moneylenders or informal lenders who impose usurious interest rates of 5% to 10% daily. However, they must pay back all of their profits. Although some NGOs and microfinance organisations assist, there is little coverage and no awareness among vendors.

Furthermore, savings, insurance, and investments in larger stocks are all hampered by the inability to access banking. Their lack of access to financial services keeps them in a trapped financial cycle.

Neglected Infrastructure and Unfavourable Urban Policies

Technically, street vendors set up shop in crowded places with a lack of sanitary facilities, running water, or proper infrastructure, dealing with pollution, harsh weather, and traffic jams, and with a lack of proper storage rooms or vending areas.

Street vendors are rarely taken into consideration in urban planning, and when they are, it’s usually to prioritise formal retailing, tourism, or exploitation over actual livelihoods. Plans for road constructions, street beautification, or mega events frequently result in the mass evacuation or displacement of vendors because they are seen as a setback to modernisation.

These laws neglect the reality that street vending serves as an important source of goods and services for millions of citizens, in addition to being the poor’s primary means of obtaining goods.

Prejudice Based on Gender

Many of them are the only providers for their families, and the majority are women. They are also at risk in other ways: increased vulnerability to sexual harassment by clients and management, reduced access to credit, legal recourse, and decision-making forums, and juggling unpaid household chores with paid employment.

Female vendors may be excluded from vendor unions or communities because they are more likely to work in low-income areas, such as those selling vegetables or home goods. Because of gender discrimination, they are economically disadvantaged.

Competition from Online and Physical Stores

Street vendors are up against more competition as contemporary malls, shopping centres, and websites grow. They must:

  • Lower costs to draw clients, provide a discount or credit while maintaining narrow margins. Deal with clients who would rather do business online or cashless.
  • Physical stores can buy in bulk and pay for advertising, rental, and shipping costs, but sellers rely on direct sales and minimal profit margins, leaving little room for innovation or expansion.

The COVID-19 Effect

COVID-19, the pandemic of 2020, had disastrous effects on street vendors. Lockdowns resulted in:

Complete income loss for some months, perishable stock spoilage without compensation, debt accumulation to cover necessities, and declining health without access to a hospital or safety net.

They were left out because they were not registered or even made aware, even though the government publicly announced relief packages like PM SVANidhi (PM Street Vendor’s AtmaNirbhar Nidhi), which offered limited loans to vendors. Recovery has not been balanced, especially for those who lost their capital or original vending locations.

Absence of Voice and Representation

There is no collective representation or community for street vendors when it comes to planning and making demands. Although groups like the National Association of Street Vendors of India (NASVI) have made their presence felt, the majority of vendors continue to be marginalised when it comes to local presence. They are vulnerable to marginalisation if they lack a voice for their issues.

Self-help groups, communities, and associations are crucial for negotiating with local governments and offering legal support. However, their creation must be followed by coordination and leadership that involves participation and execution.

Suggestions for Policy and the Future

A many-sided, collaborative strategy is required to address the financial difficulties faced by street vendors. Among the main recommendations are:

  • Increase coverage for programs such as PM SVANidhi by streamlining the application process.
  • Encourage banks, both public and private, to develop financial products tailored to particular vendors.
  • Encourage digital payments and financial literacy to increase loyalty and accountability.
  • Provide separate vending sites with waste management, water, storage, and shelter. Include vending areas in the master plans for the city. Build facilities that are accessible, especially for women and differently abled traders.
  • Educate customers on pricing, hygienic practices, product diversification, and customer interaction.
  • To grow their business, establish connections with websites, NGOs, and suppliers. Use delivery apps or technological platforms to link customers and street vendors.
  • Provide pension plans and health insurance to unorganised labourers. Install health camps and mobile health units in areas with a high concentration of vendors.
  • Provide child care facilities and maternity benefits to female vendors. Promote associations and vendor cooperatives that can bargain with the government. Ensure redressal procedures and legal assistance.
  • Encourage local and state governments to consult with vendors by offering incentives.

Local governments must consider street vendors as an integral part of society rather than obstacles. In the future, street vendors have the potential to be transformed from marginalised entrepreneurs to empowered contributors with the right framework, infrastructure, and social awareness.

About Authors: Priyatam Khound and Navishka Jain are second-year BA Media and Journalism students at the Department of Media Studies, Christ University, Bangalore. They are passionate about reporting on social justice, grassroots issues, and underrepresented communities.

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Aryan Gulati
Aryan GulatiFreelance Journalist
Aryan Gulati is a dedicated media student based in Meerut with a wealth of experience in various newspapers and media houses. He has numerous published articles and specializes in political and crime news writing, demonstrating a strong commitment to impactful journalism.

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