Lakhs Of Small Shopkeepers In Karnataka Unite To Vehemently Oppose Government’s Bid To Introduce License Raj Through Draconian Laws

*       Over 2.0 Lakh retailers to continue protests across the state

*       The proposed License Raj law will impact 2 lakh plus small retailers, their families; have a bearing on 10 lakh people

*       Small shopkeepers are already fighting a huge battle for survival against supermarkets , multi-national companies and high inflation

More than 2,00,000 small shopkeepers under the aegis of the Karnataka State Retail Beedi-Cigarette Merchants Association, which represents the Karnataka Chapter of the Federation of Retailer Association of India (FRAI), have been protesting across the state against various Municipal bodies bid to introduce ‘License Raj’. This is despite earlier assurance given by the government and authorities that the proposal for License Raj will be dropped and harassment against small traders would not be allowed.

“License Raj” Impact on Small Retailers

• Harassment of poor and uneducated micro retailers by enforcement officials at a time when the former have already losing income to organised Big Retail Chains and Super Markets.

• Sharp increase in the cost of doing business. 

• Adverse effects on the livelihoods of small retailers who will not be able to afford extra spending for getting a license or renew a license to sell tobacco products. 

• Shift in tobacco retailing business to foreign companies/supermarkets/ malls, hurting livelihoods of small shopkeepers.

The aggrieved retailers have been holding demonstrations in Mysuru, Hubli, Mangalore, Vijayapur among other cities, to voice their opposition against the proposed implementation of licensing regulation, despite earlier assurances against the same which will make it impossible for them to sustain their families. Shopkeepers in large numbers gathered in Bangalore today to carry out a demonstration against the draconian law.

The Karnataka State Retail Beedi-Cigarette Merchants Association strongly believes that the proposed regulation will be devastating for lakhs of small traders and their family members, who have already suffered humungous financial setbacks in the last couple of years and are barely managing to sustain livelihood in the given the high inflationary  condition. It is to reemphasize that too many tobacco laws will only increase the scope of harassments and corruption by enforcement officials. 

The Association is a body of over 2 lakh micro, small and medium retailers from across Karnataka. It also represents the livelihood of over 10 lakh poorest of the poor retailers and their families and is known for raising issues concerning their lives and livelihoods.

Explaining the concerns around the proposed draconian “License Raj” proposals, Mr. B. N. Murali Krishna, President, Karnataka State Retail Beedi-Cigarette Merchants Association, said, “On account of the provisions of the Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution Act, 2003, COTPA, our members are already being subjected to daily harassment by enforcement officials, who take advantage of their illiteracy and lack of awareness to extract gratifications. As per the proposed laws, tobacco product sellers will have to get a license, which will be renewed every year. In addition to that, multiple obligations on the part of the retailers, such as the display of license and maintenance of a suggestion book, along with heavy penalties in case of non-compliance, are being proposed.”

The Association believes that such measures will cause massive harassment to lakhs of poor and mostly uneducated micro retailers at the hands of enforcement officials. It will also lead to a sharp increase the cost of doing business at a time when retailers are reeling under the aftermaths of the Covid pandemic.

Mr. Murali Krishna added that based on the past experience with other laws, the very act of getting a license will be challenging for small sellers, who do not have the money to pay the fees and are not educated enough to complete the paperwork required for licensing. “More laws will also mean more opportunities for local officials to harass our members. Our Hon’ble Prime Minister and Hon’ble Chief Minister of Karnataka have taken several important measures to simplify processes for trading in Karnataka in the true spirit of ‘ease of doing business’ and ‘promotion of entrepreneurship’. However, the Urban Development Ministry and Municipal Corporation’s proposal to make licences mandatory for trading in tobacco products through the proposed laws its draconian clauses is in complete contradiction with the Prime Minister and Chief Minister’s vision for the state.”

If one reads the proposed Municipal orders and circulars  then it is very clear that the only objective behind this exercise is to cause hardships to small shopkeepers. The members of the Karnataka State Retail Beedi-Cigarette Merchants Association belong to the lowest economic strata of society. It will be impossible for them to afford extra spends for licenses and renewals.

The Association demands that the state government must provide alternate means of livelihood to its members before implementing such draconian License Raj rules, which will surely result in a loss of income for lakhs of traders. It has further claimed that its members sustain their livelihood by selling goods of daily needs like biscuits, soft drinks, mineral water, bidi, cigarettes, etc. The average earnings of a small and marginal trader is about Rs 6,000-12000 per month which is barely adequate to feed two square meals a day to an entire family. Such regressive laws being proposed will further derail their businesses and earnings.

The Association is shocked to see that the Government of Karnataka, instead of supporting small retailers, is trying to implement laws that will deal a deadly blow to them. It is of the view that the proposed licensing law for selling tobacco products is being brought/proposed because of pressure from anti-tobacco NGOs with vested interests. The development will only support shifting of tobacco retailing business to foreign companies/supermarkets/malls, hurting livelihoods of lakhs of small shopkeepers of Karnataka.

India already has one of the toughest anti-tobacco laws in the world, which includes 85% graphic health warnings on packets, no sale to minors, public smoking ban, no sale within 100 yards around educational institutions, etc. The Association strongly believes that the existing provisions under COTPA 2003 for tobacco control/trade are more than sufficient for regulating tobacco products. Therefore, there is absolutely no need to introduce any new regulation.

The Karnataka State Retail Beedi Cigarette Merchants Association humbly request the Hon’ble Chief Minister of Karnataka to stand by lakhs of  poor ,small shopkeepers of the State and his commitment that  the License Raj for selling tobacco products  will be  dropped forever and instead help our members sustain and recover in the given difficult high inflationary market conditions.