Street Vending – A Boon Or A Bane

Street vending – A boon or a bane

RAWALPINDI, (UrduPoint / Pakistan Point News - 12th Jan, 2025) Having its pros and cons on society and economy, street vending has grabbed prominence in the society, at the same time creating important market linkages as well as causing revenue gaps for country's economy.

Categorized into moveable and static types, the impactful street vending had always been a vital entrepreneurial arc around the sector markets while subtending central focus on targeted population.

The sonorant carts loaded with goods or food items move through streets with melodious calls by the hawkers that reflect an announcement for door step delivery of the goods. On the other hand, static stalls decorated with a range of products that surround the arterial markets offer customers a must stop-over point.

Although street vendors provide wide ranging products and services to people with easy access and price compatibility, majority of them are uneducated and migrated from rural areas for better earning opportunities in urban societies and grab considerable market share.

“Factorized in industrialization and urbanization, the street vending shares around half of country’s economy,” claimed Dr Nasir Iqbal, Associated Professor and head Macro Policy Lab Pakistan Institute of Development Economics (PIDE). “They also remain a lifeline for country’s majority population by earning more than the officially announced minimum wages.”

Seeing them as providers of quality goods at masses doorsteps on economical rates to lower and lower middle class, Dr Nasir observes, “under the given circumstances, particularly when inflation rate if high, street vending serves people with moderate prices goods.”

“Buyers rush’ is an indicator to compare markets in terms of essentiality and affordability of goods as well as attraction for buyers,” Dr Nasir said. “But it is commonly witnessed that even at main markets and busy centers like Saddar, Commercial Market and Raja Bazar, there is equal rush of buyers both at plazas and shopping malls as well as the carts or make shift roadside selling points of street vendors.”

However, Dr. Bushra Yasmin, Professor of Economics at Fatima Jinnah Women University, brings forth both sides of story and opines that city’s main bazaars serve as a hub for both formal and informal connections between buyers and sellers, fostering strong economic linkages that benefit shop owners and street vendors alike. But, the same time she also mentions to revenue gaps as majority of vendors is unregistered despite doing billions of rupees business daily.

“The availability and affordability of low-cost items through vendors is a key feature making it attractive as compared to big markets and brand chains,” she remarked. “But, despite a considerable contribution in a market chain system, the street vending remains un-charged, causing revenue gaps in national economy.”

No matter that she also spoke of hitches faced by of street vending like business insecurity due to lack of legal protection.

“But, studies also reveal that economic loss due to this informal trade amounts to around 50 percent of monthly revenue and 200 percent of net monthly profit.”

She mentions the Raja Bazaar as beneficial hub from consumers perspective but states that informal vendors cause traffic congestion, pollution and other problems.

Giving solutions, she said, such challenges can be addressed by adopting green vehicles and implementing a more efficient delivery schedule. “Understanding the complex dynamics and developing solutions that benefit both businesses and residents can help the market thrive without further deteriorating the living conditions of its inhabitants.”

Seeing from customers’ perspective, many among us feel comfortable in buying goods from these vendors.

“I mostly purchase vegetables, fruits, utensils and other minor routine items from these vendors,” said Tahir Rauf, a retired government employee. “They meet needs of large chunk of population at their doorstep saving them from unnecessary hassle of busy bazars and markets.”

“I think this source of cheaper shopping should be encouraged and channelized to secure their businesses as well as bring them into tax net,” he said. “Sometimes people do not afford costly goods at main shopping malls and big markets. At that time these vendors fulfill their needs with cheaper products and closer to their homes.”

Usman Shaukat, President Rawalpindi Chamber of Commerce and Industry (RCCI) realizes the importance of street vending for being a ‘stimulator to local economies by creating supply chain links, even if informal’ and suggests to mainstreaming informal economy and integrating such non-registered vendors into formal economic system.

“By classifying them into mobile and stationary vendors for tailored regulations, enacting laws to safeguard vendors' rights, collaborating with local governments and vendors’ associations can ensure a balanced policy,” he pleaded.

“As vendors are also the contributors to our economy, designated zones, business timing and loans on low interest rate can flourish their business and help them bring into tax net,” he said.

Usman Shaukat also offers RCCI’s advocacy for inclusive policies to balance vendors’ needs and urban management. “RCCI can arrange business training programs and hygiene awareness to help vendors improve their practices, advocate tax benefits and design partnerships to develop vending zones equipped with essential amenities.”

Since ages, street vending serves as an important tool in creating employment through small scale businesses. Encouraging and properly channelizing street and small scale vending can improve economic activity as well as add to revenue collection.

APP/hrm/maz (APP Feature Service)