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Part 1: Laws Liberty & Livelihood : A Call for A Bottom-up Agenda of Economic Reforms


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Part 1: Laws Liberty & Livelihood : A Call for A Bottom-up Agenda of Economic Reforms

  1. 1. Laws Liberty & Livelihood A Call for A Bottom-up Agenda of Economic Reforms MANUSHI SANGATHAN E-mail: Website:
  2. 2. Poverty is as unnatural as water flowing upwards. Some outside force is required to make water go against its natural tendency. Similarly, the main force behind groveling poverty in India is devious policies that facilitate crime, corruption and tyranny that emanates from Government offices. Poverty is an Unnatural Condition
  3. 3. <ul><li>All over India around one crore persons, plus their dependents, rely on street vending for their livelihood. </li></ul>Vital Role in the Economy Vendors not only create self employment at their own cost and enterprise but also give a boost to the farm sector and small scale industry by providing an efficient, low cost channel of distribution for their products.
  4. 4. Vendors provide vital and efficient network of distribution for a variety of consumer goods at affordable prices.
  5. 5. Vendors bring items of daily needs at convenient locations, including doorstep of the consumers thus help consumers save time and money on commutes. Vehicular pollution would be worse if all of us had to travel for daily necessities.
  6. 6. Vendors provide freshly cooked nutritious meals at far lower prices for the urban poor and the middle class than available in regular restaurants. Street foods turn out cheaper than home cooked food if one counts the time saved.. Vital Role of Street vendors… Food vendors like the one above above sell two paranthas and sabzi with pickle and small salad at Rs 10 per plate. The snack of sprouted daal comes at Rs 5 per plate. Urban poor cannot survive without them because most live in hovels without cooking facilities..
  7. 7. At an average turnover of Rs 1100 per day , the total all India turnover of business by street vendors would amount to Rs 4,015,00 crores .
  8. 8. They represent optimum utilization of space… Selling on bicycle… Ready made garments against a railing
  9. 9. <ul><ul><li>As per India’s municipal laws it is unlawful to vend or hawk in the streets without a license. </li></ul></ul><ul><ul><li>Clauses on street vending based on the British municipal law of 1820’s. </li></ul></ul><ul><ul><li>Most urban local bodies stopped issuing licenses decades ago. </li></ul></ul><ul><ul><li>No.of vendors in Delhi: 3 to 5 lakhs. Licenses issued in Delhi: no more than 3000. Mumbai : 250,000 vendors, 15,719 licenses Patna 80,000 vendors; 2000 licenses after long struggle. Similar situation prevails all over the country. </li></ul></ul>Legitimate Occupation Declared Illegal
  10. 10. Trade plays the same role for our economy that blood circulation plays for the human body. Just as obstructing the flow of blood supply to any body part can damage or the entire body or even cause death – so also putting needless restrictions on trade damage the entire economy The illegal status of vendors and unrealistic quotas on their numbers makes street vendors vulnerable to bribes, beatings and extortion. The number of vendors at any given location is in direct proportion to the footfall of customers and market demand for their services. Trade Flow Vital for the Economy
  11. 11. In Delhi alone the terror unleashed by the License-Quota-Raid-Raj for vendors leads to loss of income through bribes and confiscation of goods worth Rs 500 Crores per annum plus long periods of enforced idleness. Ahmedabad : Rs 80 crores Mumbai: Rs 400 crores
  12. 12. Routine Assaults on Account of “Illegal Status” <ul><ul><li>An example of the farce under the guise of “Clearance Operations” </li></ul></ul><ul><ul><li>Municipal Corporation’s “Operation Ujaad” </li></ul></ul><ul><ul><li>near Sewa Nagar, May 14, 2002 </li></ul></ul><ul><ul><li>The uprooted vendors are back to business on June 14, 2002 </li></ul></ul><ul><ul><li>How did this happen? </li></ul></ul><ul><ul><li>Each vendor paid Rs. 2000 lumpsum to the extortionist mafia which additionally upped the bribe rate by about Rs. 200 per month. Today, vendors pay between Rs.1500-2000 per month as “Protection Money” in this market and yet remain insecure. </li></ul></ul>
  13. 13. Anil Kumar sells two pathuras and a plate of chanas with pickle for Rs. 10. He and his two helpers start cooking at 4 a.m. By 8 a.m. they are ready to provide food to working poor living in nearby bastis. On an average, Anil works nearly 16 hours a day. The bribes he has to pay are as follows: Police .…Rs. 1000 per month MCD health Inspector … . Rs. 400 per month MCD general Inspector .…Rs. 200 per month Another unnamed govt. official .…Rs. 100 per month MCD sweeper .…Rs. 60 per month or Rs. 2 a day. Total … .Rs. 1760 per month   A Typical Example of Payoffs
  14. 14. Recent Ban on Street Foods in Delhi On February 6, 2007, the Municipal Corporation of Delhi managed to manipulate the Supreme court into banning the sale of street foods in Delhi The reasoning given? Street foods are unhygienic and spread filth. Therefore, only pre cooked food will be allowed.
  15. 15. Studies have shown that Street foods have lower bacterial contamination than restaurant food because it is cooked fresh and in full public view whereas restaurant foods are much less safe because their kitchens are hidden from people’s gaze. Pre cooked food likely to be far less hygienic unless and can be managed only by big companies. Food vendors have not disappeared, only bribe rates have escalated.
  16. 16. Demoralisation, Loss of Capital and Erosion of Savings <ul><ul><li>A sample of the economic and political impact of a routine M.C.D. “raid” on the lives of vendors: </li></ul></ul><ul><ul><li>During a raid conducted on December 3, 2004, in which the local police participated, the following goods were confiscated under 20 different challans, one for every confiscated item, from two vendors one who runs a roadside food stall in Sewa Nagar and another who runs a cycle repair shop. The list reads as follows: </li></ul></ul>One rehdi • - one gas cylinder, 18 broken bamboos, one broken tin sheet • four saucepans, • one small kadahi, one pan • one wooden counter, one iron stool, • one board, • one broken bench one torn plastic sheeting • one plastic sheeting • one plastic sheeting • one wooden box • two bamboos • one box • one gas stove • one rehdi • one rehdi • one broken bench, one gas light,one wooden stool, some tools in a bag Fine demanded for return of goods : Rs. 19,000 Cost of starting business again for Meena : Rs. 8 to 10,000 Minimum loss of income for 25 days of enforced idleness: Rs. 4000 It takes days or weeks for a vendor whose wares have been confiscated to arrange for loans and start all over again Minimum fine required for release of one rehdi : Rs. 2100
  17. 17. Vendors on the run with their goods hastily packed in spread sheets as soon as they see police and municipal inspectors come to clear them. Those who can’t pack up and run fast end up having their goods confiscated to the accompaniment of beatings and abuses. Made to Feel Like Criminals
  18. 18. This young boy, like many others carries the socks he sells in a sack so that he can run and save his goods when the confiscation brigade attacks him This woman vendor carries the readymade goods she sells in two cloth bags that hang on her arms to escape her goods being snatched away. Desperate Changes in the Mode of Vending Due to Daily Assaults
  19. 19. Challans Rarely Mention the Location of Vendors Rajkol widow and sole earner of family– Repeatedly faces confiscation of goods and summons before magistrate as a criminal Municipalities Give New Definition to the Word “Criminal”
  20. 20. Typical Scenes During Clearance Operation Click for movie clip
  21. 21. One of the many Clearance Operation in Sewa Nagar, 1996 Click for movie
  22. 22. Constant Groveling and Humiliation Click for movie
  23. 23. Daily Economic War on Vendors Click for movie
  24. 24. <ul><li>An oft-repeated justification by the administration for removing vendors is that the shopkeepers of established markets object to the presence of traders since their business is adversely affected due to the supposed obstructions caused by vendors. The truth is that vendors offer stiff competition to shopkeepers by offering goods at lower prices. After getting the vendors removed through the intervention of police and municipal officials, the shop owners use the vacated space in following ways: </li></ul><ul><li>Hire a man on a minimal salary to vend the wares of their own shop while giving the appearance of being a vendor; </li></ul><ul><li>Charge exorbitant rents from vendors for sitting outside their shop. </li></ul>Siding with Traders against Vendors This shopkeeper has put up an extra vendor-like counter outside his own readymade garment shop to sell small electronic items.
  25. 25. This vendor selling low cost mobile phones pays Rs 10,000 per month to the shop owner in front of whose establishment in Nehru Place he is allowed to put a small display counter. Siding with Traders against Vendors… This young man pays Rs 100 -150 per day to the trader in front of whose shop he sits on a small stool displaying his business of cartridge refilling on a small cardboard box in the DDA owned shopping cum office complex, Nehru Place.  
  26. 26. <ul><li>1985, Bombay Hawkers Union Versus Bombay Municipal Corporation Judgement of the Supreme Court ). </li></ul><ul><li>Gainda Ram & Others vs MCD & Others 1986 decided by the Supreme Court on May 12, 1993 .. Laying down guidelines for tehbazari . Claims under this still not settled </li></ul><ul><li>August 30, 1989, Sodhan Singh & Others vs NDMC 1987 Decided on . </li></ul><ul><li>August 2001, Former Prime Minister Vajpayi’s New Policy for Delhi Street Vendors in response to Manushi’s campaign. </li></ul><ul><li>January 2004, National Policy for Street Vendors adopted by the Central Cabinet. </li></ul>Important Landmarks in Vendors’ Struggle The country over vendors organizations have fought long drawn out legal battles to get vending licenses. High Courts in virtually every state of India are flooded with petitions by individual vendors as well as local unions, some like Ahmedabad’s SEWA are genuine and played a vital pioneering role in advocating vendors’ cause but some unions use these cases to fleece vendors. Many of these battles have also reached the Supreme Court leading to following landmark judgements.
  27. 27. Supreme Court pronouncement in Sodan Singh and others Vs NDMC But the licensing procedures approved by the Supreme Court though well meaning are inherently flawed. They facilitate extortion rackets. “… the fundamental right of livelihood under Art 19(1)(g) of the Constitution cannot be denied to street /pavement hawkers,…”
  28. 28. Absurd Eligibility Criteria for Getting a Vending License <ul><li>Municipal inspectors often confiscate goods without issuing official receipts. Or let the vendor save his goods if bribed. </li></ul><ul><li>Vendors try to run away as soon as they see the municipal or police authorities swoop down on a market. </li></ul><ul><li>Most vendors are uneducated, live in crowded jhuggis where it is difficult to safely store documents. </li></ul><ul><li>They were not informed that a document showing economic assaults on them would acquire such high value a decade later. </li></ul>Documents demanded to prove “squatting” between 1970 to 1982 or since 1983: challans of “removal charges” or receipts of confiscation of goods issued to hawkers by the MCD, NDMC or police each time the police or municipality removed them by force or took away their goods. These challans were required to specify that the goods were confiscated from the same spot from the same person year after year
  29. 29. This Criteria Facilitated a Massive Extortion Industry <ul><li>Application forms sold in black. </li></ul><ul><li>MCD touts took thousands of rupees from each vendor to prepare bogus challans and prepare the “file of documents” required for eligibility. Each file cost Rs 20,000 to 40,000. More money demanded for moving the file and final allotment. </li></ul><ul><li>Only 85000 vendors from MCD areas managed and 10,000 persons from NDMC area able to procure required documents. Most of these rejected as bogus claimants. </li></ul><ul><li>The vast majority could not manage the ‘pay offs’ required for applying and more pay offs for actual allotment. </li></ul><ul><li>Only 2300 vendors got clear tehbazari that too after years of legal procedures. Many of these tehbazaris sold at exorbitant prices because of short supply. </li></ul><ul><li>578 cases still pending for allotment; This admitted by the MCD in its submissions to the Supreme Court on 1.5.2006 </li></ul>
  30. 30. In the Gainda Ram case, Supreme Court appointed Justice Thareja to review the N.D.M.C allotment of tehbazari claims and Justice Chopra performed a similar job for MCD areas. The reports prepared by both of them are scathing in their criticism of the functioning of the two municipal bodies: To quote Justice Thareja : “I thank Almighty who gave me the strength, courage and patience to complete the sensitive and arduous task… against all internal and external forces of dishonesty, threats, temptation, attempts to change the course of justice, lack of punctuality of staff which resulted in consuming five and a half years in completing the task. I had a concept in mind that in a democratic set up the Government is honest and fair and does not litigate with its citizens. The experience of working for local self government has changed my perception” (p.II). Judicial Indictments on the Track Record of Municipal Agencies
  31. 31. Additional Sessions Judge Chopra also indicted the functioning of MCD in the following words <ul><li>In quite a large number of cases the Applicants who should have been held eligible in terms of the scheme approved by Hon’ble Supreme Court of India have been held ineligible and denied allotment of squatting sites in violation of the norms and the scheme approved by Hon’ble Supreme Court of India. </li></ul><ul><li>There is substantial percentage of applications that have been held eligible wrongly in spite of absence of proof of continuous squatting. Some of them have been held eligible on the basis of manipulated or fabricated documents… . Most of these persons were held eligible in violation of the norms laid down by the Supreme Court of India and in many cases there was a designed and deliberate departure from the scheme. </li></ul>
  32. 32. Manushi got sucked into this battle accidentally. In 1996-97 Madhu Kishwar was commissioned by Doordarshan to make a series of documentary films. Since she happened to witness several Clearance Operations in her neighbourhood during that period, she per chance shot some of that on camera and made a half hour documentary on the plight of street vendors and cycle rickshaw pullers in Delhi. The film entitled: “Udarikaran: Kewal Oopar ka Udar” (Liberlisation only for the top players of our economy?) was telecast over the National Network of Doordashan. This brought numerous vendors and cycle rickshaw owners knocking at Manushi doors to help them find a solution to this problem. How Manushi Got Involved in Vendors’ Rights Struggles
  33. 33. One of several Public Hearing of Street Vendors and rickshaw pullers organised by Manushi in starting April 2001. The panel consisted of eminent citizens presided over by the Central Vigilance Commissioner, Mr. N. Vittal Manushi’s interventions have led to a paradigm shift in the battle of vendors. did not fight just for the rights of our members or any particular group of uprooted vendors. Instead we demanded that the entire edifice of License Quota Raid Raj be dismantled thus extending the agenda of economic reforms to self employed poor.
  34. 34. August 2001 , Prime Minister Vajpayee announces New Policy Framework for Street Vendors and Rickshaw Pullers in response to Manushi’s campaign
  35. 35. Extract from Prime Minister Vajpayee’s letter and Concept Note sent to the Lt. Governor dated August 23, 2001 “ Recently there has been a spate of articles in the media about the operation of the licensing regime for hawkers and rickshaw pullers in Delhi (e.g. article titled: &quot;Poor Excuses&quot; by Tavleen Singh in India Today, 9 July 2001, &quot;Regulate street hawkers&quot; in Times of India 16 July 2001). [Both these articles are based on MANUSHI study and facts that emerged through the Lok Sunwayi of street vendors and rickshaw operators]. A study by a high profile NGO, Manushi, titled: &quot;How the License Quota Raj Impacts the Urban Poor&quot; was also released. Sh N. Vittal, Central Vigilance Commissioner, has written to the Delhi Chief Minister, Smt. Shiela Dikshit, drawing her attention to the problems. The broad points made in these articles, the Manushi study, and Sh. Vittal’s letter are as follows: Continued on next page
  36. 36. <ul><li>The policy of restrictive issue of licenses for hawkers and rickshaw pullers is a perversion of the SC judgement in Saudam Singh vs. NDMC and others, 1987, which ruled that hawking, etc. represented a fundamental right to livelihood, and was subject only to reasonable regulations to avoid potential social costs of these activities (e.g. street/pavement obstruction). </li></ul><ul><li>(ii) The restrictive licensing system enables rents to be collected by the officials who process, issue, and enforce licenses. These rents are estimated in the Manushi study to be approx. Rs 50 crores a month. (While the study followed a rather informal methodology/approach, the figure is not beyond credibility, coming to c. Rs 1000 per month per hawker. </li></ul><ul><li>(iii) Hawkers and rickshaw pullers are also subject to atrocities by these functionaries, e.g. destruction or misappropriation of the hawkers wares or impounding/destruction of rickshaws, by these functionaries. </li></ul><ul><li>(iv) That it is time that the licensing system is reformed so that the hawkers and rickshaw pullers, belonging to the poorest sections of urban society, are enabled to pursue their modest livelihoods without extortion. This would convey the message that policy reforms benefit the poor, and not only the middle class or well-to-do. </li></ul>Extracts of Prime Minister’s letter continued from previous page
  37. 37. Extracts from Former Prime Minister’s letter to LG Dear Shri Kapoor, The policy of restrictive issue of licenses for hawkers and rickshaw pullers is a perversion of the SC judgement in Saudan Singh Vs NDMC and others, 1987, which ruled that hawking etc. represented a fundamental right to livelihood and was subject only a reasonable regulations… The restrictive licensing system enables rents to be collected by the officials who process, issue, and enforce licenses . Hawkers … are also subject to atrocities by these functionaries, e.g. destruction or misappropriation of the hawkers wares.. . That it is time that the licensing system is reformed so that the hawkers … belonging to the poorest sections of urban society, are enabled to pursue their modest livelihoods without extortion . This would convey that message that policy reforms benefit the poor, and not only the middle class or well-to-do… Accordingly, I advise that the Government of the national Capital Region of Delhi, addresses this task of policy reform urgently. Yours sincerely, A.B. Vajpayee Dated August 23, 2001
  38. 38. Key Feature of PM’s New Policy <ul><ul><li>Let the laws of market demand and supply determine the number of vendors and rickshaws in the city rather than bureaucratic quotas. </li></ul></ul><ul><ul><li>The metropolis may be divided into “green”, “amber” and “red” zones, free access, fee based access and prohibited access, respectively. </li></ul></ul><ul><ul><li>There must be an absolute prohibition on municipal and police authorities from impounding, or destruction, or seizure, of goods and equipment, except when permitted under other laws. </li></ul></ul><ul><ul><li>Any person who wishes to be a street hawker may do so by a simple act of registration involving two steps: (a) reliable identification by any means and (b) payment of a nominal fee to cover costs for issue of a photo identification card. </li></ul></ul><ul><ul><li>Purpose of the registration is to provide reliable identification for the purposes noted above. It is not a permit to ply the trade. No such permit is needed. </li></ul></ul><ul><ul><li>A registered street hawker who wishes to operate in “amber” zone, may do so by paying a fee, upon which a sticker to the effect may be affixed on the registration id. </li></ul></ul><ul><ul><li>Numbers of street hawkers/cycle rickshaws in the “amber” zones may be regulated by adjustment of the amount of fee periodically. Penalties for plying in an “amber” zone without payment of fee may involve a financial penalty, in addition to the fee but in any case there must be an absolute prohibition on municipal and police authorities from impounding, or destruction, or seizure of goods and equipment. </li></ul></ul><ul><ul><li>The hawking fee may be scaled to different categories of street hawkers, e.g. those pushing carts or those using pedaled vehicles.Thus the number of vendors to be regulated by increasing the license fee rather than putting an unrealistic artificial ceiling on the numbers that can operate in the city. </li></ul></ul><ul><ul><li>Non-government organisations with a record of working for the welfare of these groups may be authorized to interface between them and the concerned authorities. </li></ul></ul>
  39. 39. Prime Minister Vajpayee had assigned the responsibility on the L.G. of Delhi However, the entire administration went overboard in trying to sabotaging the policy and made sure things got worse for vendors. Before declaring vending zones, the city administration started declaring large parts of the city as non-hawking zones – including prime shopping areas like Connaught Place. For example, on 28 th Jan 2002 the Nehru Place vendors were told that since the Prime Minister Mr Vajpayee is visiting to inaugurate the organisation called Astha Kunj, they were required to vacate their complex for a day or two because of security reasons. However, the vendors were never allowed to return back to their places. Soon after Nehru Place was declared a ZERO Tolerance Zone for Vendors. Operation Sabotage
  40. 40. Central Government adopts a new National Policy for Street Vendors, 20th January 2004 Even while policy announced for Delhi vendors was being sabotaged, National Task Force for Street Vendors was set up by the Ministry of Urban Development and Poverty Alleviation in 2002. Member of this Task Force included Sewa, Manushi, Hawkers Sangram Samiti of Kolkatta and Bombay Hawkers Union etc. This resulted in a National Policy for Street Vendors which was approved by the cabinet in January 2004.
  41. 41. <ul><ul><li>Key features of this policy are as follows: </li></ul></ul><ul><ul><li>Lays down rules for ‘regulation’ instead of ‘prohibition’ of street vending. Licensing to be replaced by a simple registration process. </li></ul></ul><ul><ul><li>Recommends adoption of a system of registration of hawkers and non-discretionary regulation of access to public spaces. </li></ul></ul><ul><ul><li>Requires setting up of Ward, Zonal and Town Vending Committees with representation of street vendor organisations and by other stake holders. These committees are to provide tehbazaris to 2.5% of working population in an area. </li></ul></ul>Key Features of National Policy
  42. 42. <ul><ul><li>Mandates that street vendors cannot be evicted in the name of beautification or cleaning drives. They can be evicted only if the land is needed for explicit public purpose. It also states that if vendors are evicted, they should be simultaneously rehabilitated to restore their livelihood to previous level. </li></ul></ul><ul><ul><li>Stresses the need for easy access to credit and insurance as also water and sanitation. </li></ul></ul><ul><ul><li>Emphasizes self-governance and by vendors of hawker zones. </li></ul></ul><ul><ul><li>Calls for amendments in police and other laws which are archaic and are being misused by officials to harrass and collect hafta . </li></ul></ul>Key Features of National Policy…
  43. 43. Excuses for Denial of Licenses <ul><ul><li>Despite Supreme Court judgments requiring that each city set up hawking zones, no city government has yet taken concrete steps to implement this policy. The situation deteriorated further after the adoption of the National Policy for Street Vendors by the Central Government in January 2004. </li></ul></ul><ul><ul><li>Reasons offered by officials for non-action on this issue: </li></ul></ul><ul><ul><li>Hawkers bring chaos, squalor and cause obstructions for other road users. </li></ul></ul><ul><ul><li>Legalizing their existence will mean rewarding illegal encroachments on “ government land”. </li></ul></ul><ul><ul><li>Such old fashioned bazaars ought to be got rid of and replaced with modern shopping complexes. </li></ul></ul><ul><ul><li>Cities will be flooded with vendors if life is made easier for them in cities. So many vendors cannot be accommodated without causing a total civic breakdown. </li></ul></ul>
  44. 44. The Bogey of Security Considerations Street vendors are the first ones to be attacked and removed the moment there is a bomb blast or any such violent incident in any part of the city. In actual fact: <ul><li>Hawkers bring greater safety and security to any neighbourhood. </li></ul><ul><li>Deserted colonies are more crime prone; Areas with high density of hawkers such as Chandni Chowk, have far fewer incidents of serious crimes. </li></ul><ul><li>Hawkers the first to notice unusual movements, activities or persons because their livelihood depends on safety and peace on the streets. </li></ul><ul><li>K.P.S. Gill: “By getting the hawkers and rickshaw pullers of Punjab to act as the eyes and ears of the police, we were able to defeat terrorism in Punjab.” </li></ul><ul><li>But when hawkers are terrorised by the police, they fear and avoid contact with police rather than warn them of dangers. </li></ul>