The story of illegal hawkers
The story of illegal hawkers
Illegal hawkers are not illegal - let me explain.
Hawkers serve two purposes in any city - convenience and lower costs access for low-spending people. These include school children (pocket money), low-income earners, etc. The hawkers place themselves in the flow of traffic (increases convenience) and use basic store frames (pop-ups, carts etc.)
Most hawkers are illegal for two reasons.
First, they should not be there. They have no permission and no allocated space. Second, they pay no taxes and generally are suspect on the health and hygiene front. This situation is a result of a combination of bad urban planning and the high cost of doing business in India.
Sensible urban planning is required.
When we observe the flow of crowds in and out of cities and localities, we realise that it is advisable to place convenience stores along the flow path. It is advisable to keep high-end retail in locations where people have space. It is also critical to take repair shops and refurbishment centres away from glitzy areas and busy promenades.
There are smart tricks required to enable this sort of outlay because convenience stores have a low margin (like repair shops) but are required to be in high-traffic areas (unlike repair shops). There are too many nuances related to this issue we shall deal with some other day.
But the second reason is the BIGGEST pain point.
The cost of doing business legally is high in India.
It should be easy for a street vendor to create a legitimate business entity, bid for shop locations suitable for convenience shops and get relevant permissions easily. Today, it is quite difficult. Most of the street vendors, small tailor shops, and home-based businesses find it difficult to trudge through the bureaucratic swamp to create legitimate businesses. These entrepreneurs are often ill-qualified to deal with this range of complexity.
The illegal hawkers and street vendors are forced to be illegal.
There is hope
The government has improved the ease of doing business for organised business. The rankings have improved, though we have a long way to go. There are incentives in place to provide help for startups (high on tech, talent and access to capital but low on experience).
The Open Network for Digital Commerce (ONDC) is creating channels for smaller but legal businesses to jump on digital platforms. It makes market access easier.
Bringing hawkers and street vendors into the formal, legal economy should be the next step. It will unleash a lot of stifled economic potential.