Informal Sector And Economic Growth

Informal Sector and Economic Growth

Mumbai, Ahmedabad

Presented By:

Prof. Madhu

HAWKERS – INFORMAL SECTOR

Hawkers are those people who offer goods or services for sale from public places, primarily streets and pavements. In most Indian cities the urban poor survive by working in the informal sector Hawkers perform a number of services for the urban population

 Mobile units

 Processed food items

 Semi static units

 Unprocessed food items

 Static units (stalls)

 Non food items

ECONOMIC DIMENSION 

Hawkers play an important role in the distribution of small goods in all parts of the cities/ town



Survival strategies for those who work in that



Alternative to unemployment



Availability of necessary goods at affordable cost

SPATIAL DIMENSION 

Concentration at location having high pedestrian traffic



Conflict with formal/defined activities



Failure of city government to provide required services at requested location



No space reserved for hawker in formal residential areas



Services required by residents



Hawker tend to ‘encroach’ on pavements and other public spaces

CATEGORIZATION 

Operation in terms of traders, petty productions and services



Type of goods the hawker sell



Movement of hawker (mobile viz a viz static hawker)



Business areas (Larri/Galla/Pathari)

SOCIO ECONOMIC DIMENSION 

Hawking taken up by migrants (49%)



Recent migrant are absorbed at transport nodes while not so recent are found in commercial areas



Dominated

by

Males,

women

employed

in

vegetables 

Hawking mostly near to home



Able and mature workforce, 48% in the age group 20-30, 30% in the age group 30-40



Older hawker sold more competitive goods requiring higher investments



Women usually had smaller investments (loans repaid daily/weekly)

OPTIONS 

Hawking was preferred to casual work (formal sector)



Better source of income (25%)



Independent work (10%)



Inheritance with work (23%)



No other options (11%)

SOME STASTICS… Total number of people employed 317 mn Organized sector Unorganised sector

27 mn 290 mn

(8%) (92%)

TISS YUVA Survey 91 India

Informal sector - 75% of the total working population of Ahmedabad city constitutes 8 – 10% of total earnings. Workers size

Lakh

%

Workers in organized sector

3.4

23

Workers in unorganized sector

11.6

77

Unorganised Workers Own home

41 %

Regular place like shop factory

11.5 %

On the road footpath

47.5%

The reason for the non acceptance of the hawkers is the spatial distribution of the hawkers in the different parts of the city. Distribution of hawkers Macro – describes citywide distribution of hawkers. uneven distributed hawker tend to concentrate in areas of high population density, at nodes of high transport triangles, adjacent to activity such as entertainment complexes etc. Micro – pattern of hawkers within individual hawker concentrations

TURNOVER OF VENDORS IN SOME INDIAN CITIES City earning/day (Rs)

Estimated

Annual

Average

employment turnover generation (crores)

Ahmedabad

80, 000

1, 007

63

Patna

80, 000

421

50

1, 590

66

Delhi

1, 20, 000

Mumbai2, 00, 000 Calcutta

2, 118

1, 00, 000

65 1, 518

65

Mumbai – 1961 65 % in Organized sector & 35 % in Unorganised sector 1991 65 % in Unorganised sector & 35 % in organized sector ‘Fact file -street vendors’, July 2000, Ministry of labour,

1 – 50 50 -150 151 -250 > 251

Thesis – Hawkers in Ahmedabad

Intensity of HAWKERS in diff locations of AHMEDABAD city - 1988

Thesis – Street vendors in Ahmedabad

HAWKERS in diff locations of AHMEDABAD city

INFORMAL MUMBAI Around two-thirds of hawkers (65%) reside 10 kms. or more from their places of work Hawkers in the working class areas of Central Mumbai reside in oneroom tenements (chawls) or in hutments in the vicinity. Most of the hawkers do not employ others on wages Around half of the street vendors (51%) belong to Other Backward Classes and the number of Scheduled Caste vendors is low Low skilled migrants seeking employment in the city, Increase in hawkers is the growing number of urban poor. By providing cheaper commodities hawkers are subsidizing the urban poor, something which the government ought to do. In Mumbai the average middle income consumer spends around Rs. 1,500 per month.

WHAT TO DO ??? Ban on hawkers not only lose their livelihood but the consumers are also be inconvenienced. Plans must take into account the idea of natural markets in urban areas. Municipal markets, major bus stops, hospitals, public places emerge as natural markets which need to be developed. While formulating urban plans it is necessary to take into account the right of hawkers to public space Giving them a legal status & recognition by providing them licenses or identity cards Setting up certain financing mechanisms like payment of certain fees for standing at an area & promotion of credit schemes.

BASIC PLANNING PRINCIPLES – applicable for both formal & informal commercial development Accessibility to the markets Population supporting the markets Cost of the land occupied by the market Infrastructure available Availability of the land for further expansion Present landuse in the catchment are of the market.

FORMAL APPROACH The BMCA (1949) as applied to AMC and other cities does not allow hawker except when granted license The Police Act 1949 enables the commissioner of police to remove any obstruction on public street with out notice No license issued in Ahmedabad since 1960’s, hence most hawker are ‘illegal’ AMC collects annually an amount of Rs. 5 cr by civic authorities (SEWA). This payment is over and above the hafta.

POLICY ISSUES Ignorance of poverty issues and able to provide more employment in formal markets In absence of strong organizational set up, hawker fail to consolidate, have to fall back on informal network Absence of availability of finance (at low rates) keep the hawker poor, and not able to move out of the poverty cycle Specific relationships found between the type of land use, type of activity, and extent of hawkers Space to be provided in the physical plays for hawker Possibilities of night markets Linking the hawkers by an organizational structure with non govt. organization