After the 1991 liberalisation, the poor do not seem to have gained as much as the rich. The truth is there has been hardly any liberalisation for the working poor. For them it has been all LPQ (Licences, Permits and Quotas) and little LPG (Liberalisation, Privatisation and Globalisation). Street entrepreneurs (hawkers, cycle rickshaw pullers, small shop owners and many others) still suffer under the weight of regulations, restrictions and harassment by government and lack basic economic freedom in the areas of their livelihood.
Exit LPQ; Enter Liberalisation
Delhi has more than half a million cycle rickshaws providing an affordable and accessible transportation service to the poor and the lower middle class. The Municipal Corporation of Delhi has mandated that cycle rickshaws have to be licensed and fixed a limit of 99,000 licenses. Less than 75,000 licenses have actually been given out. This makes more than 80 per cent of Delhi’s cycle rickshaws illegal. This government created illegality exposes the pullers to constant harassment and extortion. Studies suggest that on an average a bribe of Rs. 200 per month is paid by each cycle rickshaw puller. That makes the total amount extorted by the municipal and police officers at Rs. 80 million a month! This is the burden of the license-permit quota (LPQ) rajof economic unfreedomon the poorest of the poor in Delhi.
The need to do away with the license raj can be explained with the following example. Why are there approximately five lakh rickshaws in Delhi, and not four or six lakh? Simply because the market demand is for five lakh rickshaws. The licensed capacity is 99,000, but what impact did it have on the actual number of rickshaws? If the road capacity was 50,000 or 1.5 lakh, how many rickshaws would actually be on the road? About five lakh! Irrespective of whatever the sarkar decides, the people get what they demandfive lakh rickshaws. It is simple demand and supply. If we abolish the license system, there will still be about 5 lakh rickshaws in Delhi because any additional rickshaw puller would not make enough to stay in that vocation. The licensing system does not control the number of rickshaws; it only empowers government officials against the poorto harass and to extort.
Respect property rights of street entrepreneurs
Unlicensed street entrepreneurs don’t have any right over the means of their livelihood. They are faced with the constant threat of eviction or seizure. Hawkers are routinely evicted from their spaces, and their wares confiscated, as if they didn’t belong to them at all. This is either because of the illegal status that most of them suffer from with more than just a little help from our government regulatory machinery and/or under the guise of beautifying the city by clearing it of encroachments. It is not true that hawkers free ride on public space. They pay substantially to the authorities involved and suffer losses due to frequent evictions. Once caught, their wares are confiscated and returned to them only after payment of a penalty.
Do any of these make sense, at all?
Decentralize management of public space
Centralized decision-making can never accommodate preferences of all members of a community. In this context, it is imperative that the locus of decision-making regarding the use of public space be changed from a single municipal body to multiple wards. The Ward Committees are a good example of decentralized, local, participatory governance. Comprising of elected members representative of a hawkers union, RWAs, MTAs, Housing Societies/Cooperatives etc. and citizens of that ward who elect the members of the Ward Committee, they enable people of a specific ward to know its problems, to identify its needs and prioritise them, and take decisions on subjects which can best be handled at that level. The Ward Committee can collectively take decisions, among other things, on where and how many hawkers and rickshaw pullers they want in their area. This is a much better option than decisions based on bureaucratic whims that arbitrarily decide which market comprises encroachers who need to be evicted.
Registration versus Licensing
If the government desires to know how many people are employed in a profession, it can put in place a registration system. Everyone practicing a trade in the city will fill up a registration form. The registration system is very different from the licensing system the registration system does not require any prior permission, it simply provides information to government. Also, if a person is not registered, that does not make him illegal and outside the purview of law!
In this context, CCS’s Livelihood Freedom Campaign demands that the Unorganised Sector Workers Bill 2004 not overlook the plight of street entrepreneurs and in the spirit its objective to provide for the safety, security and welfare of these workers, include at least the following provisions-
- Remove all licenses and restrictions on entry-level professions.
- Respect the property rights of street entrepreneurs to their machinery and merchandise.
- Decentralize the management of public space by creating ward-level governing committees.
Occupational delicensing and deregulation should take priority in the agenda of the government, rather than embarking on massive employment generation schemes that hardly benefit the people they are meant for.
Champion Livelihood Freedom!
On the one hand the government pours money into rozgar yojnas and subsidy schemes for the urban poor, and on the other hand, it prevents people from earning an honest living. The money for such schemes ironically comes also from the poor since indirect taxes contribute more to the exchequer than the direct taxes. Instead of taking money from a section of the poor in the name of helping the other section of the poor for their employment and welfare, the government should first let the poor earn their living themselves.
Economic freedom is more valuable for those at the bottom rung of the economic ladder. Nobody appreciates free enterpriseabsence of government regulations and controlsmore than the poor unlicensed hawker. The rich can always find a way around government controls, the poor have no way out.
Delhi Municipal Corporation Cycle-Rickshaw Bye-Laws 1960 Section 17A
Any cycle rickshaw found plying for hire without a licence or found driven by a person not having proper licence as provided under bye-law 3(1) and (2) shall be liable to be seized by the Commissioner or a person duly authorised by him in his behalf. The cycle rickshaw, so seized shall be disposed off by public auction after dismantling, deformation of such process including smashing it into a scrap after a reasonable time as may be decided by the Commissioner from time to time.
Delhi Municipal Corporation Cycle-Rickshaw Bye-Laws, 1960 Section 3
No person shall keep or ply for hire a cycle rickshaw in Delhi unless he himself is the owner no person will be granted more than one such licence.
Mumbai Municipal Corporation Act, 1888: Prohibition of deposit, etc., of things in streets Section 313, Technical condition(iii)
They [hawkers] should not hawk within 100 metres from any place of worship, holy shrine, educational institution and general hospital and within the periphery of 150 metres from any Municipal or other market.