Delhi Sealing - a disaster in the making?

jeffktay

I meant to post about this last month, but somehow the weeks have slipped away effortlessly. My wife and I were in Delhi during the last few weeks of October, and we spoke to quite a few people to learn their thoughts on the sealing - pretty much everything we heard was negative, and we just wanted to spread the word through the international community in case we can do something to help. I'm not an expert on this situation, so if I've misstated any facts or anything needs clarification, please comment and respond.

Some basic information about the sealing:

If you've been there, you know how Delhi bustles with commercial activity - it's full of rambling districts where people have taken the initiative to start up all manner of small businesses, from furniture shops to bookstores to travel agencies and restaurants and pretty much everything you can imagine. I was told that 80% of all workers in Delhi are employed by small family-run businesses, and consequently there are literally millions of people who depend on these businesses for their livelihood.

A great many of these businesses are located in so-called noncommercial districts, where families have transformed the ground floor of their residences into storefronts while continuing to live upstairs. There are huge "noncommercial" areas of Delhi that are absolutely crammed with shops and stores just like this, some of them operating continuously for 40 or 50 years and enriching the communities around them.

Because these districts are not zoned for commercial use though, they've recently been targeted by the Municipal Corporation of Delhi as illegitimate business zones. All shops and storefronts in these areas are being sealed, some of them with the merchandise still inside the stores. If this goes through to completion, literally millions of people throughout Delhi will suddenly be left without a means to provide for their families.

I was told that the official reason for the sealing was the opening of a 25-year old court case in which a man living in a residential district filed a complaint against a shop opening down the street. Although unacted upon for the last quarter century, the officials chose to open the case and shut down every business that operated out of a so-called residential zone. We were told that many businesses were given just 3 days to stop all commercial activity and evacuate the premises.

The people we spoke to saw this as a convenient excuse, however. Almost without fail, they laid the blame at the feet of the WTO and on American pressure towards the Indian government, aiming to make the country more receptive to foreign business, which essentially can't compete on a level playing field with the locally grown shops and factories. Over and over we heard the same refrain - "Wal-mart is closing our businesses."

I'm sure the people I spoke to were biased against the sealing, but from what they told me it certainly seemed to be grossly unfair. Many told me that they would be happy to move their businesses to commercial zones if given the opportunity, but the point is that they have been given no such opportunity whatsoever - they've just been told to immediately close their doors.


I don't know if there's anything that we can do about this, but I'm hoping that by making more people aware of the injustice we can somehow bring pressure on the Delhi authorities to change this policy or offer constructive alternatives to the 44,000 small business that are targeted. If you can do anything to help, please do! This is the Delhi that we know and love that is being dismantled before our very eyes.

Again, if you see any innacuracies or misstatements here, please comment and make any corrections necessary. many thanks,

-Jeff

Dr.Barai

when one transforms his house into a commercial establishment a component of greed plays a role. so lawbreakers should be punished. better late than never.

snowcrab

Perhaps it's time for merchants to band together and petition for rezoning. They might be able to get some of the shops grandfathered in. Stands to reason that in forty years the business districts should have been legally allowed to expand anyway, there are lots of new people who need access to daily needs. But then, rezoning applications probably take 25 years to proccess also.

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Styler

Hi Doc,

It's not really lawbreaking. A shop or office running a business is given a Sales Tax / Vat No only after a Sales Tax Officer makes a physical Visit to the premesis and approves the business to run from there. This is a senior govt officer and when he approves the location of the store and the store is given a sales tax no to run a business from that premises, it is clear that the govt has sanctioned running a business from there. Moreover the Electricity dept, the water Dept, and the MCD (Municipal Corporation of Delhi) itself have been collecting taxes on Commerial property rates for these shops /office. This also gives legitimacy to the commercial establishment. If the MCD collects Commercial Property tax obviously it allows and approves the commercial premises to be running from there.

Now my thoughts on this are that if a shop is sealed, the owners will be affected but they would still have enough resources to still lead a normal life. The 20 odd Employees of the shop who get paid around $ 100 a month or less would the people who would be worst hit. They have no savings, they have no technical competence, and they only know how to sell clothes etc on the sales counter. When lacs of such people get unemployed, there will be no jobs for them. These people live month to month on salaries, pay the fees for their children , and pay for their monthly rations, bills etc by their small salary. When they loose their job what would they do ? I really feel for them.

Second point is, if you want to close all shops the people should at least be offered an alternative location. Nobody has thought of resettlement. Make a few commercial areas in all areas, and offer the shops to the people whoose shops are sealed. I'm sure they will be happy to move if there is an option.

I being an IT consultant run my office from a 250 sq feet room in my 1800 sq feet appartment. I have no public dealing, and it's just a couple of my employees and i who work from here. Till a few weeks back i was also having a sword on my head, that my small office would be sealed. According to a 1950 law professionals included only 4 professions i.e Doctors, Lawyers, Charted Accountants and Architects. Since there was nothing called I.T or management in 1950 we are not supposed to be professionals. Fortunately the Supreme Court has told the govt that it can expand the list of professionals to include IT Consultants and other professionals like me. But till the time the situation was unclear i would get police, mcd etc coming to my office and asking for bribes. They made a lot of money through this.

I tried checking the rentals for commercial office space for myself and for a 250sq feet space i was quoted a monthly rental of Rs 50,000/= or $ 1000 a month. I cannot afford to pay this much and i had thought if this dosn't get sorted out, i'll just leave the country that i love and move to the West -US or some place. I love my country and would love to be a part of it's development but if this is how it is going to be, and i'm not allowed to run a small office from the house i own i'd rather leave. Now i have the option to leave the country and go, but what will happen to the 3-4 people working for me, and learning from me. They will be the ones who will be worst affected and i feel for them too, but i won't havean option.

I think we all love India for it's organic growth and the freedom people have to do things freely. If this freedom is taken away and they think they will turn New Delhi into Paris or Washington DC, i'd rather move to Paris and Washington DC then.

Styler.

phantom

Well.... not many of you might know that there is a lot of support for this sealing drive in delhi. In fact a lot of residential associations have complained because of the problems a big showroom creates in the neighbourhood. Parking is one of them.

So, Last I heard was that around 2000 streets in delhi were granted commercial status by supreme court and the shops on those streets will not be sealed. But the encroachments will be bulldozed.

capt_mahajan

If traders broke the law, they should be prepared for the consequences. The fact that they may have bribed their way through everything all these years is meaningless.

Some similarities with foreingers buying in Goa illegally. Problem is, foreigners can't hold Goa to ransom like the traders attempted to do in Delhi.

Styler

There are so many laws in India, and some totally irrelevant to the times. If all the laws are implemented in the true spirit i assure you 95 % of the public would have broken the law. You know there is a law in Delhi that the top speed to drive is 55 Km/Hr. Now tell me how many people have broken this law ?

And i assure you i also got a Sales tax registration and the Service tax registration, and the Sales tax officer visited my office. I did not pay any bribe and at the time he came over i'm sure he also thought it's legitimate to run a small office from there. It's just after years a law which is totally irelevant is acted upon by the Supreme Court, and every body says that the traders have broken the law.

Moreover it's a simple question of Demand and Supply. There was demand for local shops and there were not enough commercial areas in the first place. Govt did not plan properly, so to meet the demand of the people these commercial establishments came up. Does Prohibition work, if a guy wants to drink he will find his liquour no matter what. So only because the community didn't have enough shopping options in the commercial areas set up the govt, did the shops come up. The govt is also to be blamed for not planning the city properly. Why is the govt not accountable for the lapses too.

Another important factor is that the govt has failed to generate enough employment opportunity and a lot of people who had no job opportunities, helped themselves setting up small shops in their homes and started earning a living. The govt failed to provide them with a livelyhood, and i think it has no right to take away the livelyhood they created for themselves. I think the people who are opposed to sealing are the ones in comfortable jobs. Ask them what would their reaction be if they would be made jobless.

phantom

Some of the point you stated are true. But the fact remains that the commercial activity in a residential area puts a strain on the resources. Everything from water to electricity is subsidized for the residential purposes. Not to mention the parking, which is becoming such a big hassle. I guess, govt. will develop the distt. centres all around the city. But the cleansing has to happen. You cant turn a blind eye on that.

capt_mahajan

I did say 'If'

It must be hard for people like you, collateral damage in all this. Many traders did break the law.

Good point (more so since that has been mine with friends and family in Delhi ). If the traders were to push for this, I think they will get a lot of support from the citizens of Delhi.

Nick-H

Very interesting thread which fill in a lot of background to the newspaper coverage I was reading.

Thanks, especially to Styler for his on-the-spot information.

One point: it is easy to say 'relocation' --- but in practice the areas for relocation are going to be far away from the customers, and top of the businesses already serving that area!

It can work, though. Some pavement traders here are being moved to empty land very close by. I say 'can work' --- we have yet to see!

BTW... even if I might give the impression elsewhere that Walmart is the cause of all evil ( ) --- I think it is a bit much to blame them for this when they are not even there yet! Unless...

<wanders off contemplating various possible conspiracies>

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just_an_old_boy

One sided arguement. There are more than enough shopping space in Delhi. How come the DDA/MCD shopping complexes are lying empty? IMHO, the traders could have negotiated with the govt. to have the DDA rents lowered.

Simply because some laws were broken, it doesn't mean you should continue doing so.

You are overlooking the civic nuisance caused by these traders. I can't take out my toddler for a walk because that sidewalks are either crowded or encroached upon.
My wife being a novice driver dreads taking out the car due to a bunch of illegaly parked cars outside our gate.
Sundry illegal eataries and food joints have made a mess of the area with garbage strewn around, some being dumped in the drains and a pack of aggressive dogs always lurking around.
The 'jobs' you talk about are basically rural migrants doing odd errands and manning shops. And it must go to their credit that they managed to turn the community places likes parks into a open air lavatory, simply because an illegally operating commercial establishment does not have that infrastructure.

It is pathetic that a bunch of foreigners are now pimping for these law breakers and these are the same self proclaimed 'tourist' characters that will photograph those crowded illegel market places overflowing with garbage and chaos to show it abroad as how backward India is.

phantom

Um...check your language mate.. i think you are going a little too far ahead of yourself.

Anyways, while i agree that sealing was necessary. There is the other side as well. The shopping complexes are empty not because of high rates, but because of the lack of infrastructure there. E.g. no lavatories, no provision of drinking water, no parking, no good entry or exit. The design doesnt offer them good exposure. A lot of problems. There should be a balanced way to deal with this (At least thats what we all expect). But in the real world, one person will most likely to be the loser for the other to gain anything.

capt_mahajan

just_an_old_boy, second phantom on the language. Also, generalisations like yours (bunch of foreigners) are inaccurate, meaningless, possibly racist and insular, all of which just annoy people without being productive.

Styler

I'm trying to find a decently priced commercial space in any DDA / MCD Market. Ive met a lot of property dealers in the last few months, and let me tell you there is none available. For the upper floors in small community markets in a place like Vasant Kunj, they are asking for Rs 1 Crore for a 300 sq feet space, and it's in a totally dead market. Small enterpreneurs can't afford those kind of prices. We'd have to simply shut operations. The price of the same place would be one-third 6 months back, but just because the sudden sealing drive, the prices have gone over the roof and there is no way we can afford them.
A titan showroom in in the illegal part of the South Extension Market was sealed. And Guess what being a loaded company they took a shoroom place in a legitimate Part of South Extension Market for Rs 28 Lacs a Month Rental. Is it not an absurd rate. Can anybody but the big Reboks, Levis and Titans pay this kind of rent. And eventually where's this money going to come from. It's just going to come from the increased prices that the customers will have to pay.

I want to make it amply clear, there is nothing wrong in cleaning up the city and the sealing drive. Just make available an alternate option.
There's no excuse for encroachment, i'm all for removing every inch of encroachment from pavements, parks, and any other public land. Where there are lot of shops, collect a fine and create parking space. Make sure the residents are not caused any trouble.
I am writing this from personal experience that i've checked out available commercial spaces and they are being quoted at absurdly high prices because of the sealing drive.

Styler

capt_mahajan

Wow. Not too many legitimate businesses will generate even a bank interest kind of return out of 300 sq ft in one corner of Delhi.