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 27 mn (8%)
Unorganised sector 290 mn (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 Estimated Annual Average

employment turnover
earning/day generation (crores)
(Rs)
Ahmedabad 80, 000 1, 007 63
Patna 80, 000 421 50
Delhi 1, 20, 000 1, 590 66
Mumbai2, 00, 000 2, 118 65
Calcutta 1, 00, 000 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 one-

room 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