Social security for street vendors


back to issue

STREET vendors form a very important component of the urban informal sector in India. It is estimated that the total number of street vendors in the country is around 10 million.1 They comprise around 2% of the total population in the metropolitan cities. This paper broadly defines a street vendor as a person who offers goods for sale to the public at large without having a permanent built-up structure from which to sell. Street vendors may be stationary in the sense that they occupy space on the pavements or other public/private spaces, or mobile in the sense that they move from place to place by carrying their wares on push carts or on their heads.

The terms ‘street vendor’ and ‘hawker’ have the same meaning and are often interchanged. We will discuss the problems of street vending and then deal with some of the initiatives taken for providing social security. In the latter part we will deal with the National Policy for Urban Street Vendors/Hawkers and the issue of social security.


In most Indian cities the urban poor survive by working in the informal sector. Poverty and lack of gainful employment in the rural areas and in the smaller towns drive large numbers of people to the cities for work and livelihood. These people generally possess low skills and lack the level of education required for better paid jobs in the formal sector. Besides, permanent protected jobs in the formal sector are shrinking, hence even those having the requisite skills are unable to find proper employment. For such people work in the informal sector is the only means of survival. For the urban poor, street vending is one way of earning a livelihood, as it requires minor financial input and minimal skills though the income too is low. A large section of street vendors in urban areas are those with low skills and who have migrated to the larger cities from rural areas or small towns in search of employment.

There is also another section of the urban population that has taken to street vending, namely, those once engaged in the formal sector.2 These people, or their spouses, were once engaged in better-paid jobs in the textile mills in Mumbai and Ahmedabad and engineering firms in Kolkata. Formal sector workers in these three metropolises have had to face large-scale unemployment due to closure of these industries. Many of them have become street vendors in order to eke out a living. A study on street vendors conducted in these cities shows that around 30% of the street vendors in Ahmedabad and Mumbai and 50% in Kolkata were once engaged in the formal sector.3 A study conducted by SEWA in Ahmedabad shows that around half the retrenched textile workers are now street vendors.


Over the past few decades we have observed that there is a substantial increase in the number of street vendors in the major Indian cities. Mumbai has the largest number of street vendors estimated at around 250,000. Kolkata has more than 150,000 street vendors. Ahmedabad and Patna have around 80,000 each and Indore, Bangalore and Bhubaneshwar have around 30,000 street vendors.4

The total employment provided through street vending becomes larger if we consider the fact that they sustain certain industries by providing markets for their products. Many of the goods sold by street vendors, such as clothes and hosiery, leather and moulded plastic goods and household goods, are manufactured in small scale or home-based industries. These industries employ a large number of workers and they mainly rely on street vendors to market their products. In this way street vendors help sustain employment in these industries.

Street vendors are mainly those who are unsuccessful or unable to get regular jobs. This section of the urban poor tries to solve their problems through their own meagre resources. Unlike other sections of the urban population they do not demand that government create jobs for them, nor do they engage in begging, stealing or extortion. They try to live their life with dignity and self-respect through hard work. The study on street vendors in seven cities5 shows that their average earnings range between Rs 40 and Rs 80 per day. Women vendors earn even less. These people work for over 10 hours a day under gruelling conditions on the streets and are under constant threat of eviction. This plays havoc with their lives. A study of street vendors in Mumbai conducted by SNDT Women’s University and ILO6 shows that an overwhelming majority of them suffer from ailments related to stress – hyperacidity, migraine, hypertension, loss of sleep, among others.


The poorer sections too are able to procure their basic necessities through street vendors, as the goods sold are cheap. The study on street vendors in seven cities mentioned above7 showed that the lower income groups spend a higher proportion of their income in making purchases from street vendors mainly because their goods are cheap and thus affordable. Had there been no street vendors in the cities the plight of the urban poor would be worse than what it is at present. In this way one section of the urban poor, namely street vendors, helps another section to survive. Hence, though street vendors are viewed as a problem for urban governance, they are in fact the solution to some of the problems of the urban poor. By providing cheaper commodities, street vendors are in effect providing subsidy to the urban poor, something that the government should have done.


Street vendors have existed since time immemorial. In recent times however, they have come to be regarded as a public nuisance by certain sections of the urban population. NGOs representing the elite sections, especially the residents’ associations of the middle class and upper middle class, are most vocal about eviction of street vendors from their vicinity. In most of the large cities, such as Mumbai, Delhi, Kolkata, Chennai, Bangalore, these associations aggressively argue for restoration of pavements as public space only when street vendors ‘encroach’ on them.

At the same time these associations too blatantly encroach on public space by employing private guards who regulate entry of people through public roads that access their residential areas. They cordon off public space such as roads and lanes by erecting fences and gates.

Unfortunately, such encroachments are often condoned by the police and municipal authorities. In several middle class or upper middle class residential colonies in Delhi the local ‘citizens’ welfare associations’ build gates on public roads that lead to the colonies and have security guards who regulate entry of people. This is done to prevent mobile vendors or anti-social elements from entering the colonies, but the public at large too are harassed because of these forms of private regulations of public spaces. However, the municipal authorities and the police in fact encourage such forms of encroachment and use of private guards as they see it as a way of maintaining law and order. This was assumed to be the basic duty of the police.

The constant tirade by these elite NGOs that street vendors deprive pedestrians of their space, inconvenience traffic and encourage anti-social activities finds favour with the media which highlights this issue. The municipal authorities too act promptly on their advice by evicting these street vendors, depriving them of their livelihood. The inconvenience caused to the majority of the population who find it convenient to purchase from street vendors is never a consideration. The fact that no committee of slum dwellers (they would represent the majority of the population in any city) has ever complained against street vendors is of course irrelevant to the municipal authorities as well as these self-proclaimed defenders of public space (who collectively constitute less than 5% of the population).


The Supreme Court has taken a different position. More than a decade ago, the New Delhi Municipal Committee evicted a common street vendor, Sodhan Singh, who sold garments at Janpath in New Delhi. He appealed to the Supreme Court through a public interest litigation claiming that the action violated his fundamental rights, more specifically his right to carry on business or trade (article 19(1)g of the Constitution of India). In a very significant judgment, the court ruled that, ‘If properly regulated according to the exigency of the circumstances, the small traders on the side walks can considerably add to the comfort and convenience of the general public, by making available ordinary articles of everyday use for a comparatively lesser price. An ordinary person, not very affluent, while hurrying towards his home after a day’s work can pick up these articles without going out of his way to find a regular market. The right to carry on trade or business mentioned in Article 19(1)g of the Constitution, on street pavements, if properly regulated cannot be denied on the ground that the streets are meant exclusively for passing or re-passing and no other use.’ (Sodhan Singh versus NDMC, 1989).8

The above extract from the Supreme Court judgment is significant because it emphasizes several important aspect of street vending and use of public space. The judgment notes the positive role of street vendors in providing essential commodities to common people at affordable prices and at convenient places. Moreover, the judgment notes that street vending, if regulated, cannot be denied merely on the ground that pavements are meant exclusively for pedestrians. The most important aspect is that street vendors are exercising their constitutional right to carry out trade or business hence it should be regulated properly and not abolished.


Despite the Supreme Court’s ruling, street vendors conduct their business amidst insecurity. Whenever eviction drives are conducted their wares are confiscated or even destroyed. Even where street vending is permitted by the municipality, the police has the authority to remove them. Section 34 of the Police Act empowers the police to remove any obstructions on the streets. Hence, even if the municipal authorities demarcate areas as street vending zones, the police has the right to evict street vendors in these zones. Even licensed street vendors can be evicted under this law. The section reads: ‘No person shall cause obstruction in any street or public place by… exposing anything for sale in or upon any stall, booth, cask, and basket or in any other way whatsoever.’

In order to overcome these restrictions, street vendors organize themselves into unions or local associations that enable them to continue their activities. These organizations are mainly localized bodies representing street vendors in specific areas of the city. Most of these unions or associations are independent organizations though some of the unions are affiliates of the larger trade union federations. Since street vending is not officially permitted, the main role of these organizations is to negotiate with the local authorities (officers in the municipal wards and police stations) for occupying public space. In general it is found that the rate of unionization is low. The different studies conducted on street vendors in Mumbai, Delhi and Ahmedabad show that less than 20% of them are members of unions. Most of these members are males as female vendors constitute a small section of the profession. In most cases they marginalized.


Ahmedabad is an exception as female vendors constitute a sizeable section (40%) and they are also unionized mainly due to the efforts of Self-Employed Women’s Association (SEWA). The existence of SEWA as a union of women in the informal sector has encouraged females from the urban poor to take to street vending. Ironically, Ahmedabad is the only city where the male vendors have the lowest level of unionization!9

There are other means through which street vendors manage to conduct their trade. Vendors in an area form their informal associations that negotiate with the local authorities. This invariably means offering rent (bribes) to the authorities for warding off eviction drives or forewarning them of impending drives. These associations collect money from their members and pay it as rent to the concerned authorities. There are others forms of extracting rent. In some cases local musclemen, more often than not with the backing of a political party, collect protection fees through threats. Their links with the local authorities ensure that those who pay will not be disturbed and those who refuse will face eviction either by musclemen or the authorities. The level of unionization is low mainly because street vendors feel that they can survive through paying rents rather than forming unions that will fight for their rights.


The non-official/illegal status of street vending along with low levels of unionization has given rise to an alarming rate of rent seeking. The study on street vendors10 mentioned earlier, found that they pay between 10 to 20% of their earnings as rent. In Mumbai the total rents collected amount to Rs 400 crore annually. In Delhi, Manushi, an NGO, conducted a public hearing in 2001 on problems of street vendors and cycle rickshaw pullers in the city. It was found that Rs 50 crore is collected monthly as rent from these people.11 These findings were later endorsed by the Central Vigilance Commission. In Ahmedabad, however, where female vendors are unionized, rent seeking is much lower.

Legalizing the profession and encouraging trade unions are the means through which rent seeking can be reduced. The local bodies should levy taxes on street vendors which would increase the revenue of these bodies. But these are also the precise reasons why the authorities may resist such moves – they stand to loose out on their extra income through bribes.


One of the main reasons for poor organisation among hawkers is because theirs is a competitive occupation. Unlike factory workers who can be united for a common cause, street vendors tend to view each other as competitors. Each vendor feels that the other should be evicted as fewer the number of vendors the more they can sell. Hence they prefer to negotiate directly with the authorities for carrying out their trade in a particular area. Organisations that they form could only help in this process.

However, there are other reasons for unionising street vendors. If the role of the union is to mainly devise means for keeping hawkers on the streets, it will be an uphill task in the long run. There may be other unions with greater political backing who are more efficient in these tasks and who could take over. Hence, not only do hawkers compete with each other, their unions too are competitive and constantly trying to use all types of resources to achieve their objectives and displace the others.

There is evidence that if the union or member-based organisation takes up other issues along with unionisation the hawkers benefit in the long run. We can mention two such membership-based organisations in this regard. One is SEWA, a trade union that encourages other activities, such as micro credit and child care as a part of it programme of unionisation. These are seen as complimentary to trade union activities. The other is the National Alliance of Street Vendors of India (NASVI).12 This is the main federation of street vendors’ unions in the country and it was mainly responsible for pressurising the government to have a national policy for street vendors.

SEWA, as a union, is different from a regular trade union. Since it operates among women workers in the unorganised sector, it realised right at its inception that it could not make much headway through traditional forms of movements. Therefore, apart from unionising the women, SEWA helps them to start self-help groups for micro credit and other activities. SEWA’s micro credit programmes have been quite successful as they have helped poor women mitigate their immediate problems of capital. Earlier these female hawkers had to borrow from moneylenders at high rates of interest.


Ill-health is another problem faced by the women. For women their bodies are their wealth; if they fall ill they lose their income. SEWA therefore started health schemes for its members in the form of group insurance and insurance during hospitalisation. The women also find that illness among their children is a major source of expenditure. The union, therefore, organised crèches and schemes that ensure regular check-ups for children, especially infants in the 0-1 year age group. Regular checks of height and weight are carried out to detect malnutrition among children.

The union alone cannot render these services. It depends on support structures for carrying out the activities. Hence, SEWA has promoted NGOs and cooperatives that would be responsible for these activities. For example, SEWA initially started an NGO to take care of health related activities. This later was converted to a cooperative as, being a membership-based organisation, this would involve democratic participation in its functioning. The cooperative conducts regular training programmes for its members to educate them on problems relating to health, nutrition and child care.


Similarly, the network of self-help groups (SHGs) has prompted SEWA to start a cooperative bank run exclusively by women and only catering to women workers. This has enabled street vendors access to institutional credit through their micro credit groups. In addition to these activities, SEWA has organised schemes for provident fund and pension.13

NASVI too has organised social security schemes for its members in some areas. NASVI is a federation, hence it cannot have a uniform policy for all its constituents. We will discuss one of its larger constituents, namely, NIDAN in Patna. NIDAN is a membership-based organisation that has a sizable following among hawkers in Patna and other towns of Bihar. Group insurance is one of the more successful schemes of NIDAN. It has organised street vendors into groups so that they can avail of hospitalisation costs and life insurance.

Initially NIDAN undertook extensive training programmes to acquaint street vendors with the different insurance schemes of Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). It then helped its members to get involved in insurance schemes. Given the levels of corruption in our society, they were uncertain whether they could recover any costs from the insurance companies as they were poor and illiterate. However, when members saw some others receiving their claims, their confidence grew. They knew that if their union stood by them they could recover costs from the insurance companies. As a result NASVI was able to organise several insurance groups among street vendors in Patna and other towns.

In August 2005, NASVI adopted a scheme that gives multiple benefits to its members. The scheme includes insurance coverage on health, house and property, death (accidental and natural) and coverage for permanent and partial disability. This scheme was initiated by some of its member organisations in Bihar. They initially organised training programmes on 22 and 23 August 2005. One third of the participants were women. The members were given details of the programme, its claim procedures and how to enrol new members. The annual premium varied between Rs 100 to Rs 70 which is very affordable for even the poorer street vendors.

The cases mentioned above are some of the successful attempts of street vendors to gain social security for themselves and their families with the help of the unions. These are scattered instances that undoubtedly have their positive side. However, what is needed is a broader and wider thrust that would include a larger number of street vendors from different parts of the country. This is feasible only if the government takes the initiative. The National Policy for Urban Street Vendors that was adopted by the government on 22 January 2004 and later endorsed by the UPA government, too has provisions to this effect. We will look into these in the following sections.


The national policy tries to follow the guidelines of the Supreme Court judgement. It is an important document as it tries to restore some dignity to street vendors. Its introduction states: ‘The role played by the street vendors in the economy as also in the society needs to be given due credit but they are considered as unlawful entities and are subjected to continuous harassment by civic authorities.’ It further states that ‘this policy tries to ensure that this important section of the urban population finds recognition for its contribution to society, and is conceived of as a major initiative for urban poverty alleviation.’14 (Emphasis in original).


The main objective of the policy is to ‘provide and promote a supportive environment for earning livelihoods to the street vendors, as well as ensure absence of congestion and maintenance of hygiene in public spaces and streets.’ This may appear contradictory. The police and municipal authorities, backed by the so-called citizens’ groups who fight for appropriation of public spaces, would argue that street vendors cause congestion and create unhygienic conditions. If street vendors are allowed to function, streets cannot be free of congestion. This is not at all true. If hawking is properly regulated and the right environment created, it can certainly be a positive contribution to urban life, as the Supreme Court judgement notes. Moreover, urban development plans must take street vendors as a part of the planning process and only then can there be any semblance of order. At present, street vendors are treated as irritants to urban planning and organisation.

Provisions for hawking need to be made in the urban plans and the existing street vendors need to be settled. The policy tries to tackle these problems through democratic means and collective action. Normally hawking and no-hawking zones are designated by the civic or police authorities. These are done in an arbitrary manner and in many cases the interests of street vendors and the needs of consumers are not considered. In many cases the authorities deliberately demarcate hawking zones in areas that are least likely to have to have consumers.


The policy stresses that ‘designation of vendors markets/no-vending zones should not be left to the sole discretion of any civic or police authority but must be accomplished by a participatory process.’ Ward committees in large cities and town committees in smaller towns will take care of these issues. These committees will have representatives of the municipal authority, traffic and local police, associations of shopkeepers, traders and residents’ associations including association of slum dwellers and representatives of street vendors. The representation of street vendors will be from membership-based organisations. These representatives will constitute between 25 to 40% of the total number of members of the committee. One-third of the members representing street vendors will be women.

It is often found that apart from forcible evictions, street vendors are removed from the streets under the guise of beautification of pavements. Potted plants or decorated signs are placed on the pavements to prevent street vendors from plying their trade. At times shops or residential plots encroach on the pavements by cordoning off a portion in order to plant trees or flowers. These forms of encroachments often hinder pedestrians more severely than those by street vendors. The policy, therefore, states that, ‘no hawker/street vendor should be arbitrarily evicted in the name of "beautification" of the cityscape. The beautification and clean up programmes undertaken by the states or towns should involve street vendors in a positive way as a part of the beautification programme.’


It was mentioned earlier that Section 34 of the Police Act empowers the police to remove any obstructions on the streets. Hence, even if the municipal authorities demarcate areas as hawking zones, the police have the right to evict street vendors in these zones. This section needs to be amended in order to remove the anomaly between a legal vendor and illegal obstruction. Even licensed street vendors can be evicted under this law. The policy has recommended that all states should amend the Police Act of their respective state and add the following rider: ‘Except in case of street vendors and service providers with certain reasonable regulations.’ Similarly the central government should amend Sections 283 and 431 of the Indian Penal Code and include the rider. The state governments have been advised to ‘remove the restrictive provisions in the municipal acts to make street vendors inclusive in the city plan/cityscape.’

Several state governments have laws that are detrimental to street vending. These need to be changed in order to legalise and regulate hawking. The worst offender in this regard is the Government of West Bengal. Hawking or street vending in Kolkata is controlled by the Municipal Commissioner under the provisions of the Kolkata Municipal Corporation Act of 1980. This act prevents any type of vending on the streets. It was under these provisions that on the night of 16-17 November 1996 the infamous Operation Sunshine took place. More than a hundred thousand street vendors were forcibly evicted from the streets that night and property worth several crore rupees was destroyed or confiscated. This was, by all accounts, the most brutal action taken against the urban poor in any part of the country.

Matters did not end with Operation Sunshine. In 1997, the state government proposed an amendment to the Kolkata Municipal Corporation (KMC) Act. This was Bill No. 33 of 1997, known as The Kolkata Municipal Corporation (Second Amendment) Bill, 1997. This later became an Act. Section 371 of the KMC Act was amended. This section contains regulations on street vending. The original section forbade the use of any pavement for hawking goods. The amendment expanded this to include, ‘any basket, receptacle or goods on pavement, street, park or garden for display or sale’ (Section 371, sub-section 1). This section further states (sub-section 1A) that any hawker contravening or abetting in contravening sub-section 1, shall be punished with rigorous imprisonment for a term extending up to three months or fined Rs 250.

In the Statement of Objects and Reasons, the Act states in 2(ii) that in order to prevent encroachment in public places, ‘it has been decided to declare any such encroachment by the street vendors, stall holders and other organisations as cognisable and non-bailable offence.’ It is ironic that although alleged rapists and murderers are granted bail in some cases, street vendors selling wares on the street are regarded as more dangerous criminals. This is perhaps an indication of the attitude of the state government towards the urban poor.


One way of legalising street vendors is by issuing licenses to them. The municipal authorities are thus able to keep a check on the number of vendors and can also earn revenue through license fees and other charges. However, the experience with licensing has been very negative. In cities like Mumbai, the municipal authorities have stopped issuing licenses for several years. As a result, the number of licensed vendors is around 14,000 whereas the total number of vendors (on municipal lands) was around 1.25 lakh. Moreover, the census of street vendors conducted by Tata Institute of Social Sciences-YUVA in 1998 found that approximately only 8,000 of the vendors covered possessed licenses.


The situation is more or less similar in other cities. In Patna street vendors can obtain licenses but only after filling a cumbersome form every day, before starting their business. The vendor is required to give minute details about the place of business, nature of business, description of goods sold and so on. Given the low level of literacy of street vendors, one wonders how many of them can perform this intricate task every day.

Rent seeking is possible only when vendors are illegal. However, the licensing system, even if liberalised, may itself provide new avenues for rent seeking. The draft policy notes: ‘…numerical limits to such licenses, which are sought to be justified on the argument that congestion in public places would thus be avoided, has given rise to an elaborate regime of rent seeking. In the first instance, rents are derived from the issue of licenses, since the demand exceeds the (often arbitrary) numerical limits of such licenses. Second, given the demand for services of street vendors exceed the supply from licensed vendors, a number of unlicensed vendors seek to operate, and rents are extracted during enforcement by allowing them to operate without licenses.’

The policy, therefore, recommends that instead of licenses, there should be a simple system of registration of street vendors and non-discretionary regulation of access to public spaces in accordance with the planning standards and nature of trade/service. Registration of street vendors will be done by the ward committees as these are best suited to assess the situation at the ground level and vendors will be provided identity cards. The registration fee is to be nominal and will be fixed by the Urban Local Body (ULB). Registration will be renewed every three years. The registration fees, monthly maintenance charges and fines, if any, will be collected by the ward committee on behalf of the ULB. A portion of the revenue collected will be allotted to the ward committee for its operations.

Another aspect connected with legalisation is eviction. Besides causing financial hardship and impoverishment, eviction creates loss of dignity for the vendor. The policy lays down that evictions should be avoided but where relocation of street vendors is necessary a minimum notice of 30 days should be served to them. It further notes that the vendors or their representatives should be involved in planning and implementation of relocation and efforts have to be made to ensure that the vendors in the new locality have the same earnings as the pre-evicted level. The states too have been asked to take comprehensive measures to check and control the practice of forced evictions.


Street vendors can be assets to the urban system if they are given the opportunity to contribute to its development. Being a part of the marginalised urban poor, they are treated as trouble-makers whose sole purpose is to create chaos on the streets. This attitude is prevalent not only towards street vendors but also other sections of the marginalised. The civic authorities and the urban elite, in fact, seem to regard the majority of the urban population as obstacles to improving the urban environment. Whenever the question of citizens’ initiatives for improving cities arises, the reference is invariably to the middle and upper middle class. It is these people and their representative NGOs who can take on the responsibility of improving the cities. The vast majority of the urban population is not only kept out of these initiatives but are, more often than not, regarded as the problem. In other words, this majority is denied citizenship.


The fact is that no plan for improving the city can be successful without the participation of the urban poor. They need to be integrated into the planning process and in the campaigns for a better environment. The experience of another marginalised section of the urban workforce, namely, rag pickers, has shown this. Rag pickers have been regarded as a nuisance and routinely blamed for spreading garbage. They are harassed by the civic authorities and middle class residents associations. In fact these people, who form the poorest section of the urban population, are engaged in activities that are very positive for the environment as they collect recyclable materials from the city’s garbage.

Instead of victimising them for their activities, the civic authorities could instead incorporate them in keeping the city clean. There are instances where this has happened and the results have been positive. In Ahmedabad, SEWA, has been able to include rag-pickers in the ‘clean city’ campaign. In Mumbai, the Stree Mukti Sangathana too has involved rag-pickers in beautification campaigns in some parts of the suburbs. Such moves are not only beneficial for the urban environment, they also try to restore citizenship to the marginalised.

In the case of street vendors too, their involvement in keeping the pavements clean could be beneficial for the urban population. But this cannot be done if hawking is ipso facto regarded as illegal. If hawking is legalised and regulated, street vendors could be given the responsibility of keeping their environment clean. This would be readily accepted by them as no hawker likes to work in unclean surroundings. The policy in fact recommends that beautification programmes should necessarily involve street vendors and their organisations.

The main highlight of the policy is its stress on self-regulation among street vendors. This aspect becomes more important in the case of food vendors who need to operate under hygienic conditions. The policy stresses that instead of having health inspectors, food vendors must ensure hygiene through self-compliance. It states, ‘though quality control is essential, the practice of "health inspector" may not be suitable for the hawkers.’ This is mainly because such inspections encourage rent seeking rather than the objective of promoting hygiene. Street vendors, therefore, need to take up the responsibility of quality control. If this is violated, the ward committee can take action by imposing fines or by asking the offenders to close their business.


As street vendors are a part of the urban informal sector they have little or no access to institutional credit. This makes them dependent on private moneylenders who charge high rates of interest or they depend on their savings as working capital. The policy, therefore, suggests that banks should encourage street vendors to form SHGs for income generating activities. It further states that vendors’ associations should be assisted by NGOs and they should be covered in government schemes for poverty alleviation. The attempt should be towards forming federations of SHGs to create ‘a financial interface between the vendors and formal sector financial institutions to gain access to larger credit not only for income generation but also for housing, whenever the need arises.’


The policy notes that the need for social security is high for the informal sector. Social security generally covers medical care, sickness, maternity benefits, employment injury, inability and survivors’ benefits, old age pension etc. The social security laws granting these provisions are generally applicable only to workers in the formal sector. These schemes are financed partly through workers’ contributions and through contributions from their employers. If these schemes are applicable to street vendors they would be run solely through their own contributions as they are self-employed.

The policy states that there are two options for enlisting street vendors for social security benefits. Welfare boards could be created for street vendors on the lines of those existing for construction workers or beedi workers. Vendors could deposit their contributions in banks. At the end of the month, the bank will transfer the amount to the welfare board. Such an arrangement would require enactment of a law.

The other option is that the unions of street vendors should be assisted by NGOs or other agencies to promote SHGs. These could be networked and developed into a financial institution which will look into extending credit and also deliver other products such as insurance, old age pension etc. The government must provide matching contribution. The policy also suggests that special insurance schemes should be developed to cover the loss of goods of street vendors due to natural and manmade disturbances.

The main lacuna in the policy is the suggestion that social security schemes should be financed by contributions from street vendors as they are self-employed. In other sectors, employers contribute to the schemes along with their workers. If hawkers are the contributors, the amount will be meagre and insufficient to run any of the schemes efficiently.


The only other party that can match the vendors’ contribution is the government. However, we have seen that the government’s involvement in social security is restricted to granting old age pensions. It is therefore necessary to find other sources to fund the schemes. One could look towards Kerala for likely solutions. The state is well-known for its numerous welfare boards for different sections of workers in the informal sector. It is also found that when these boards are funded by contributions from workers and the employers, the latter delay their contribution or at times do not contribute. One finds a similar situation in the contributory provident fund schemes in the organized private sector. The employers often skip paying their contributions to the fund. The workers suffer because their fund amount is considerably reduced. Hence, one has to be wary about seeking contributions from single employers.

The experience of Kerala shows that there are different means of acquiring the employers’ contribution. In some of the boards, such as construction, the financial situation is much better because the employers’ contribution is collected as a cess. It is mandatory that one per cent of the cost of any construction work in the state has to be deposited to the welfare board for construction workers. This has ensured that the employers’ contribution is collected regularly. A similar scheme could be framed for street vendors. The wholesale markets where street vendors buy their goods can be asked to contribute a part of their sale revenue as a cess for the vendors’ welfare board.


The most important aspect of the policy is the stress on organising vendors. It recognizes the fact that unionisation is necessary for organising social security schemes and for protecting their rights. It, however, stresses the interplay between the union and NGOs or SHGs. These organisations are seen as complimentary to trade unions as it helps them get benefits for their members. The national policy can be considered as a landmark for street vendors because for the first time the government has addressed the problems faced by an important section of the urban proletariat and tried to put forth solutions. There is, however, always a slip between acceptance and implementation. The state governments are the key players because this policy is related to the ULBs and laws regulating these bodies are made by the respective state legislatures. In the final analysis it is clear that this policy can be implemented if the central government shows the political will to direct the stage governments to implement it. Alongside, the street vendors have to organise themselves and pressurise the state governments from below to implement the policy.



1. Government of India, National Policy for Urban Street Vendors/Hawkers, Ministry of Urban Employment and Poverty Alleviation, 2004. www.meupa/

2. See Sharit K.Bhowmik, Hawkers in the Urban Informal Sector: A Study of Street Vendors in Six Cities, National Alliance of Street Vendors of India, 2000.; Sharit K. Bhowmik and Nitin More, ‘Coping with Urban Poverty: Ex-Textile Mill Workers in Mumbai’, Economic and Political Weekly, Mumbai, 36(52), 2001; Jan Breman, ‘An Informalised Labour System: End of Labour Market Dualism’, Economic and Political Weekly 36(52), 2001.

3. Sharit K. Bhowmik, 2000, op cit.

4. Ibid.

5. Ibid.

6. SNDT Women’s University – ILO, ‘Street Vendors in Mumbai’ (unpublished report), Mumbai, 2000.

7. Sharit K.Bhowmik, 2000, op cit.

8. GOI, 2004, op cit.

9. Sharit K.Bhowmik, 2000, op cit.

10. Ibid.

11. Manushi Nagarik Adhikar Manch (tr. Manushi Citizens’ Rights Forum), ‘Memorandum Submitted to the Lt. Governor of Delhi on Behalf of Delhi’s Street Vendors and Rickshaw Pullers and Owners on 2 October 2001.’

12. The description of work done by SEWA and NASVI are based on interviews when I visited Ahmedabad and through interaction with members.

13. Ela Bhatt, We Are Poor, But So Many, Oxford University Press, Delhi, 2006.

14. The quotes in this section are from the National Policy, GOI, 2004, op cit.