By Bhogtoram Mawroh
As anticipated, the first announcement made by the Executive Committee (EC) of the newly formed Khasi Hills Autonomous District Council (KHADC) was related to trading licenses. The new Executive Committee, led by the Voice of People Party (VPP), announced a ban on issuing new trading licenses to non-tribal traders for trades that Khasis can engage in. Unlike the demand by the Hynniewtrep Youth Council (HYC) asking KHADC to come up with provisions specifying that trading licences will be issued only to genuine non-tribals who are permanent residents of the state, the news report of the ban did not specify if it extended to only those who are not permanent residents of the state. So, it’s reasonable to assume that the ban is applicable to both the permanent as well as non-permanent non-indigenous residents.
Trading license has always been a highly lucrative political issue for all parties. When the Titosstarwell Chyne led EC was about to be brought down, the CEM (Chief Executive Member) himself, i.e., Titos, went on a personal inspection of trading licenses in order to identity non-tribal traders (non indigenous non-ST people) who were operating without one. After Pyniaid Sing Syiem became the new CEM, he did the same thing. He also went on a personal inspection spree to identify non-indigenous traders trading without obtaining a proper license. Unless the raid led by Titos failed to identify any unlicensed traders that Pyniaid’s team was aware of, the new raid conducted just a few weeks later made little sense. Instead, the tradition of harassing the non-indigenous population in the guise of trading license can be described as the initiation ceremony for proving to the local Khasi community their loyalty to the cause of the jaidbyriew. This time, however, rather than focusing on identifying traders operating without a license, the new VPP-led EC has declared its objective of completely eliminating the issuance of new licenses to non-indigenous traders. Although the directive was phrased with conditional language, implying that only trades where the local Khasi population can compete will be impacted, it could effectively exclude all future business opportunities for the non-indigenous population.
The VPP-led EC is technically correct in stating that no new trading licenses will be issued for trades that local Khasis can undertake. According to section 3A of the ‘The United Khasi -Jaintia Hills District (Trading By Non Tribals) Regulation, 1954’ the EC can refuse to grant a license if “there is any tribal who carries on the same trade or is willing to carry on such trade for which the application of license is made.” So, there are two parts to this statement: license can be denied if there are competing applicants for the same trade, and license can be denied if any indigenous tribal is willing to engage in the trade for which the non-indigenous trader is also applying. The first one is clear, though it has a lacuna, while the second is much more complex. However, both could result in the denial of all legitimate license requests.
I completely agree that when it comes to granting a trading license, preference should be given to an indigenous trader over a non-indigenous trader. The complication which arises, however, is that indigenous traders do not need to apply for trading licenses. They simply need to get the permission of the Rangbah Shnong for setting up their businesses. So, the competition never arises because they are never on the same platform applying for the same trading license. Also, even if there are already indigenous traders carrying on a similar trade, how does one decide if there is no space for an extra trader, whether indigenous or non-indigenous? Has the KHADC already mapped out the quantum of business that already exists and have concluded based on a rigorous calculation that any new business would lower the rate of profit of existing businesses? Maybe the market can accommodate more traders and therefore there is no danger to the rate of profit falling below a level which becomes unsustainable for existing businesses. If the market cannot accommodate more businesses, then we must exclude both indigenous and non-indigenous traders. Regardless of whether the business is operated by indigenous or non-indigenous traders, the market will naturally regulate itself if there is harmful competitive behavior. However, excluding non-indigenous traders without adequate data and analysis is comparable to racial profiling, which is unlawful.
One thing which one must not forget is that the legislation which regulates trade by non-indigenous non-tribals is about regulating the trading, not preventing them from carrying any business at all. This completely goes against Article 21 of the Indian Constitution which states that “No person shall be deprived of his life or personal liberty except according to procedure established by law”. As per the Olga Tellis v. Bombay Municipal Corporation (1985) judgment, right to livelihood is an integral part of the right to life under Article 21. Of course there are reasonable restrictions such as provided under, ‘The United Khasi-Jaintia Hills District (Trading by Non Tribals) Regulation’. But can this Act completely strip non-indigenous traders of their right to earn a livelihood without a valid and just reason? That could amount to violating Article 21, which is one of the fundamental provisions in the Constitution. The chances of violating the Constitution are greater in the second scenario when requests for licenses can be rejected if there is an indigenous trader “willing to carry on such trade” as desired by the non-indigenous trader.
In the second scenario, there is an assumption that indigenous traders are willing to do the trade which they are not currently engaged in. Take any trade, and we will find that there is potential for an indigenous person to participate in it. This includes any small business like selling on the footpath to setting up large factories which can employ hundreds of people. For example, in the last election, the richest candidate was Metbah Lyngdoh, who had declared assets worth 146.31 crore. There will be many who did not contest elections, but whose net worth will be much higher than this. So, theoretically, there is no business in the state that an indigenous person, if they want to, cannot do. So, following the logic of “willing to carry on such trade,” KHADC can reject every additional license request from non-indigenous traders. However, in reality, indigenous traders may not wish to pursue that business, either because they are already involved in other ventures or simply do not have an interest in it. The second category will include salaried people who have no acumen or desire to enter trades which requires a lot of effort and fortitude. Also, even if there are indigenous traders who want to enter the business, the market could accommodate new traders, both indigenous and non-indigenous. Therefore, rejecting requests for new licenses would be based not only on hypothetical reasoning without any data or analysis but also in opposition to market demands.
Does it mean that non-indigenous traders will stop doing business? As highlighted in the emotional letter sent to the newspapers by Homnath Gautam, which expresses concern over the current restrictions faced by the permanent non-indigenous non-tribals—who are already barred from purchasing land in areas under the Sixth Schedule, accessing government employment opportunities, and engaging in land transactions between non-tribals—this new directive would further prevent them from participating in trade as well. In order to survive they will be forced to leave the state in search of a dignified life elsewhere. Is that the goal? To drive the entire non-indigenous population out of the state, believing that doing so will solve all the problems?
Apart from the legal challenges that the ban might face, there are also unintended consequences which are not positive for the KHADC. One likely implication of such a directive is that it will lead to the proliferation of “Trading in Benami” which means the carrying on of any trade by a non tribal in the name or on behalf of a tribal. Non-indigenous traders who have the capital and the expertise will simply do business under the name of an indigenous person. There is anecdotal evidence suggesting that such illegal businesses are widespread. It not only results in a loss of revenue but also fosters an environment of corruption. Indigenous traders pay nominal professional fees, but license fees paid by non-indigenous traders generate a lot of revenue, ranging from a minimum of 3000-5000 rupees to a maximum of 40,000-50,000 rupees. The District Councils already lack sufficient funds. Disregarding the fact that right to livelihood for everyone is guaranteed by the Constitution, the ban is an economically disastrous move that will only lead to an increase in corrupt practices. This situation will be worsened by the fact that limited financial resources will make it challenging to pay staff salaries, cut spending on development projects, and shrink the state’s overall tax base. The expansion of an illegal economy will primarily benefit the ‘high level’, while ordinary people will bear the consequences.
The decision to halt the issuance of new licenses to non-indigenous traders for trades that, theoretically, local Khasis can engage in is a reflection of jaidbynriew politics. VPP, as the foremost jaidynriew party currently, had to take a stand on this. But it contradicts the Indian Constitution and their purported fight against corruption. It will be interesting to see what happens if someone challenges this directive in court. Will the ban be upheld, or will it be overturned?
(The views expressed in the article are those of the author and do not reflect in any way his affiliation to any organisation or institution)