Street vendors deserve the benefits of an open economy

Ironically, it was a street vendor who would go down in history as one of the first people to face charges under it. On July 1, an FIR (First Information Report) was registered by the Delhi Police under Section 285 of the BNS against the vendor for creating a disturbance under the foot over bridge of the New Delhi railway station.

Such vendors have an urban look in India and can be found on almost every street, selling a variety of goods from fruits and snacks to clothes and daily necessities. Many public spaces resemble bustling markets with pushcarts, tripods and shoppers around makeshift stalls. Given this reality, keeping public roads unobstructed is a challenge.

After all, countless marketers do it openly every day. Of course, there is legislation in the form of the Street Vendors Act, 2014 to govern street vending in India. Additionally, some states have their own rules.

However, there seems to be a lack of cooperation from local administrations to implement the 2014 central law, leaving many streets in chaos with a free-for-all. Rather than the legal distribution of hawking rights, a merchant’s ability to operate in a particular public space is often dictated by the arbitrary permission of a public official.

Legislation was created to regulate all this confusion. It provides for the setting up of city vending committees by local governments, which will carry out surveys to map out all vending zones, where it is permitted, where certain restrictions apply, and where this activity is illegal.

Traders can, as expected, obtain certificates to operate at these locations by paying a fee within a specified period. If they have such licenses to show to the police, they have a chance to thrive. It is suspected that the regime’s test will eliminate bribery fostered by asymmetric law enforcement at the street level, with entire networks of police and officials lining their pockets with pay.

How did the law work? The response varies across urban India, but its performance is largely unsatisfactory. Given the multiplicity of authorities involved, its fair and equitable application is never going to be an easy task.

There is another difficulty. Interfering with street interactions of demand and supply stifles trade, which explains why traffickers who are trafficked by policemen attract sympathy. This activity is often informal but still an important source of livelihood for many of India’s poor. Leniency for traders should not hinder others – and no one should block any lanes – while allowing markets to operate as freely as possible within those legal constraints is helpful.

As long as demand and supply meet, this business activity serves the right purpose. We have to keep it in order. Also, ensure that the mechanisms we use do not act as restrictive tools. For big businesses, India abandoned its old license raj in the early 90s.

We freed up India Inc’s supply response to demand by shedding myriad rules that invoke a cascade of permissions that cover everything from what a company can do to how much. You can also see street trade. If licenses are necessary to keep the tracks free, these should not be rare or difficult to obtain. Let’s balance all interests equally.