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This street vendor manages his finances to save via SIP for his son despite mafia 'tax'

Hawker’s life is a hard one, but they'll not have it any other way. Here's what it takes to be a street vendor.

Last Updated: Jan 14, 2019, 06.48 PM IST|Original: Jan 14, 2019, 06.30 AM IST
The hawker’s life is a hard one in a big city, but they will not have it any other way.
By Uma Shashikant

We step out for a cutting chai. The buzz of activity and the tea-seller’s enthusiasm belies the hardships associated with the business. So what does it take to be a street vendor?

Dosa stall owner Murugan tells me his story. He ran away from home to escape an abusive father. Watching films convinced him that anyone could make money in Mumbai. He arrived in the city as a 16-year old, a business plan in his head and a few hundred rupees in his pocket. He wanted to sell peanuts and gram on trains, multiply his money, and live on railway platforms.

What our entrepreneur did not know was that public places in Mumbai are run by a mafia of municipality workers, local politicians, policemen and thugs. Someone would always find out who is trying to make money in a given locality and come to claim their share.

However, there was an element of benevolence in this mafia. If they sensed you had it in you to generate a steady income for them, they would rally around and support you. Murugan was too young and inexperienced and so was promptly assigned to work as a helper for an established street vendor. The presence of a large number of vendors from South India helped, and Murugan fondly recalls how he was embraced by the community in Dharavi.

He quickly learned the language and the trade. Every arrangement was informal and everyone knew how to work with the system.

Who could set up stall where, and how many could be in a place was decided by the municipal worker and the policeman. They had the powers to raid, shut down, confiscate and close a business. But they also saw vending spots as business opportunities from which to earn a regular income, popularly called hafta.

The crunch was capital, which typically was provided by the dada, the local politician. The chain moved all the way up to the member of Parliament. The vendors had no access to the big names, However, there were a lot of ‘workers’ who took the promising migrant small businessmen under their wings.

The workers helped the vendors get a place, gave capital to begin business, negotiated with everyone else, managed competition by restricting entry to new operators, and became the informal source of strength.

Murugan told me that many streetside operations are not owned by those who operate them, but by someone higher up. The vendor merely earned a daily wage, handing over the profits to the owner. But that was much better than being jobless in the village.

A vendor’s day begins anywhere between 2 and 4 am. Supplies are bought using the local finance network, that lends at usurious rates. It is not uncommon to borrow Rs 100 in the morning and return Rs 103 in the evening. Compute the annual rates for yourselves. Money is not easy to come by in this trade.

The stalls run rain or shine, as that is the only way the daily bread is earned. The much publicised Mumbai spirit of coming back to work even after a crisis, has its roots in the economic necessity of protecting one’s space, hanging on to clients, and earning the income on a daily basis. Almost all of them work long hours.

There are no facilities to support the vendors. They access water and power from public resources, and pay informally for these. But they have no other overheads, which is why our cutting chai at Rs 6 is unbeatable in both taste and price, compared to the apology of a chai that big brand names across the street offer. They should stick to the freshly pressed coffee and not attempt the abominable machine chai.

Murugan tells me that the biggest threat comes from the elite residential owners and NGOs that spring up to raise a voice. Local communities do not see street hawkers as conveniences available at their doorsteps, as they don’t consume the ware. Most clientele for people like Murugan are people who pass by, but don’t live in that area. Hawkers make the public space safer, being present all the time, and knowing who walks the area. But this benefit does not counter balance the cost such as encroached footpaths, noise and garbage generation. There is no one to negotiate and smoothen this frayed relationship.

From time to time, movements to remove street vendors pop up and gain momentum. Police swoop down and confiscate the wares amidst much drama. After a few days, our street vendors have to buy back their goods at the auction, and set up shop again. It hurts many of them seriously.

Typically, the local mafia we mentioned knows how much a vendor makes. They either convert him into a daily wage employee if he is vulnerable, or take away a third of the earnings as pay offs. Murugan tells me he is also in the 30% tax bracket like us.

There is a Supreme Court judgement which rules street vending as a right, but no one cares to implement. Local governments come up with vendor zones, which make no business sense as customers won’t walk into a plaza of shops that is tough to access, for a service that lasts a few minutes at the most.

But Murugan is a happy man, as he earns his living with a sense of ownership. He sees what he manages to keep from his earnings as his fair share. He prefers it any day to working in a factory or as a daily wage earner soliciting uncertain work every morning.

He is married and has a son, who goes to an English medium school. Murugan has a bank account and an SIP for his son. Someone from the offices nearby sold the product to him. The optimism that our children will do better than us is what drives many of us.

(The author is Chairperson, Centre for Investment Education and Learning)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of

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