The visible hand strikes the invisible hand of Sarojini Nagar….

Rhema Mukti Baxter has a nice piece over how Delhi’s iconic Sarojini Nagar market might never be the same again. What was just a haven to see Smith’s invisible hand working, has been interrupted by the visible hand of NDMC.

On Friday, the Sarojini Nagar market in South Delhi was missing its famous bustle. There were far fewer street vendors, thinner crowds, no jostling and none of the usual liveliness.

Dwiti Lal, a 22-year-old college student who wanted to buy a dress, was disappointed by the lack of choice. “I have to attend my juniors’ freshers party [for first-year students] and I came to the export market to shop,” she said. “I have not found enough pleasing options, which never happened before.”

Nayela Kiran also looked forlorn. “It’s just not the same,” said the 12-year-old, who was accompanied by her mother. “I wanted to pick up a Pokemon Go cover for my phone but the vendors who sell that are not around.”

This is not reaction normally elicited by the central market in Sarojini Nagar. The market is one of Delhi’s beloved shopping haunts, a one-stop destination that offers everything from rip-offs of big brands to export rejects and grey-market goods. Rows after rows of street vendors selling cheap wares makes it the go-to place for college students and bargain-hunters.

All this changed after the New Delhi Municipal Council decided to evict illegal street vendors. Now what remains are shops in the allotted spaces. Hot summer wind blows through empty spaces that were earlier crammed with traders and shoppers.

Though, this piece argues it is a regular thing before 15 August. But it does not just read like a regular 15 August activity.

NDMC is doing exactly the things which economics warns against:

Since July, the New Delhi Municipal Council has been conducting a survey to identify street vendors who have been authorised either through a licence or previous decisions of courts. Once the “genuine vendors” are identified, the Town Vending Committee of the municipality will pick vending zones for them and issue certificates. If it is found that there isn’t sufficient space for all, the muncipality will create a list according to seniority, with those vending for longer getting preference, The Hindu reported.

You actually don’t need economics training to figure the outcomes of this decision. Some signs are already there.

On Friday, vendors lined up in a park adjoining the Sarojini Nagar market with challans or licences as Devendra Prasad, an inspector in the NDMC Enforcement Department, vetted the paperwork.

Ram Mohan Gupta, 43, dressed in a starched white shirt and pleated pants, was one of the vendors in the queue. Gupta said he had a stall in a corner of the market since 1987 from where he sold hair accessories for women and girls. “Mujhe nahi pataa yeh humein baar-baar kyun pareshaan karte hain,” he said. “Yeh dekhna chahte hai ki jo paper hai woh mere naam ke hai. Main asal me huun. Mein mara nai huun.” I don’t understand why they trouble us time and again. They want to check if my papers are actually mine. And, if I am still alive.

Also around in the park was Raju Singh Chandravanshi, head of the All India Street Vendors Association, with a copy of the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. People flocked to him, looking for assistance. “I am here to assess the situation,” Chandravanshi said. “According to the Street Vendors Act, NDMC has to help regulate street vending and allow those with licences to function.”

Less vendors does not mean business for regular shops. People come to Sarojini Nagar for vendors and even pick things from shops. So, having vendors is central to the market:

KK Mishra, who rents a shared space in one of the shops at Sarojini Nagar Market, was also unhappy. He said that the shops sell clothes at a higher price than the street vendors outside. “Different people come to shop at different prices,” he said. “Because the sellers outside have been removed, people have stopped coming to the market. I usually make around Rs 5,000-6,000 a day. But my earnings are down to less than half.”

Sarojini Nagar type are best places to learn economics. There are hardly any better practitioners of economics than the merchants who sell things in these markets. They assess demand, supply, consumer behavior, pricing etc in real time along with some really stiff competition. We as economics students have just complicated things which even we don’t understand.

India has these informal markets springing across products across places. This is due to low transaction/establishment costs and taxes.  They provide enormous value to consumers as well much before the online portals came to the scene. Here in lies the dilemma as well. If you organise them formally, it increases their costs and makes their business unviable.  If you don’t, then there are issues of space encroachment and so on.

Not easy questions to answer. Ideally these several merchants should figure their own solution but that does not happen easily. The government intervention is bound to create its known inefficiencies. These are also questions/debates which are hardly discussed in economics curriculum. Organising markets does not happen as easily as explained in textbooks.

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