Editorial Articles


Volume-39, 23-29 December, 2017

 
Empowering the Consumers

Dr. Sheetal Kapoor

December 24th is a landmark day in the history of consumer movement in India as on this day the Consumer Protection Act, 1986 came into existence. The Consumer Protection Act, 1986 was enacted by the Parliament to protect the interests of consumers against substandard products, increased prices through market manipulation, failed warranties, poor after sales service and unfair trade practices. It is a progressive and comprehensive piece of legislation covering all goods and services. Thus, 24th December is observed as National Consumer Day all over India. Consumer Protection Act (CPA) is considered as a benevolent social legislature for protecting consumers from the malpractices of the manufacturers. In order to meet the changing requirements of consumers in the emerging market environment the Act has been amended a number of times with the last amendment in 2002, providing more teeth to the laws and to cut down delays in disposal of cases by the Consumer Forums.
Markets can operate efficiently only when consumers are aware. Competitive markets require having information symmetry.  Consumers should be vigilant and well informed about the costs and benefits of each transaction they undertake in the market place enables greater efficiency of markets. Where the maximum consumers are aware and well informed, markets function more efficiently and competitive forces become sharp and have greater play thereby benefiting consumers. Errant members of the trade and industry are also warned that the law provides for legal action by aggrieved consumers and it may be more profitable to give consumers a fair deal than exploit them. In the present day, where every manufacturer is trying to maximise profits by resorting to aggressive and misleading advertisements and business practices involving use of unfair and restrictive trade there is an imperative need to build powerful, broad based consumer movement in the country. Once the level of awareness is raised and both rural and urban consumers become aware of their rights and responsibilities, pressure will automatically be brought on trade and industry and on the service providers to market quality goods and services at affordable prices. They will also then hesitate to indulge in unfair and restrictive trade practices.
Thus, the consumer or 'Grahak' in Hindi plays an important role in the economic system of a country. Without consumer demand, manufacturers would lack one of the key motivations to produce: and to sell to consumers. Many times consumers are equated to Gods in India. We come across statements written in many shops as "Consumer is King", "Consumer is Always right", "Grahak Devo Bhava".
Mahatama Gandhi also mentioned about the importance of consumers in market.
"A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work - he is the purpose of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to serve him." 
Evolution of the Consumer Movement in India
India has an old history of consumer protection. Consumer protection was part of its ancient culture and formed the core of its political administration. Kautilya's 'Arthasasthra' was the basic law of ancient India and the same was strengthened with provisions to protect consumers. Sale of commodities was organized in such a way that general public was not put to any trouble. If high profits (for the ruler) put general public in trouble, then that trade activity was stopped immediately. For traders, profit limit was to be fixed. Even for services timely response was prescribed; e.g. for architects, carpenters, tailors, washer men, rules for the protection of consumer interest were given. Ancient literature also mentions that in India there were regulators who supervised weights and measures. For shortfall in weighing or measuring, sellers were fined heavily. Weights and measures used in trade were manufactured only by the official agency responsible for standardization and inspected every four months. Sellers passing off inferior products as superior were fined eight times the value of articles thus sold. For adulterated things, the seller was not only fined but also compelled to make good the loss.
After Independence from colonial rule in 1947 Indian economic policy was based on giving protection to domestic industries and not opening of domestic markets for foreign competition.  In India, the consumer movement as a 'social force' began with the necessity of protecting and promoting the interests of consumers against unfair trade practices which was very different from how the consumer movement started in Western countries. In western countries, consumer movement was the result of post - industrialization and affluence of goods and services.
The basic reasons for the birth of the consumer movement in India are:
a)Rampant food shortages, hoarding, black marketing, adulteration of food and edible oil gave birth to the consumer movement in an organised form, in the 1960s. The problem became particularly acute during the time of Indo-China war of 1962 and Indo-Pak war of 1965.
b)Further lack of product choices due to poor development in technology and growing inflation in 1970's which lead to consumer unrest. Till the 1970s, consumer organisations were largely engaged in writing articles and raising their voice against rising prices.
c)The consumer movement since then put pressure on business firms, as well as the government to correct business conduct that caused consumer detriment.
d)A major step taken in 1986 by the Indian government was the enactment of the Consumer Protection Act 1986.
Salient Features of the Consumer Protection Act
One of the most important milestones in the area of consumer movement in India has been the enactment of the Consumer Protection Act, 1986. The Act empowers the consumers to take action to seek redressal for their grievances. Unless a consumer is well aware of his/her rights s/he may not be in a position to enforce their rights. The law can only be as effective as the level of consumer awareness. The higher and widespread the level of consumer awareness, the more willing consumers will be to articulate their rights during their transactions with trade and industry. The greater the articulation of consumer concerns, the more the level of their exploitation in the market will tend to reduce. Trade and Industry will also become more conscious in formulating their trade practices for fear of retaliatory action by consumers. As the awareness among consumers rises, business managers will factor such awareness in their decision making and create mutually beneficial offers for products and services so that consumers are satisfied. Consumer satisfaction is a prerequisite for loyalty to brands and companies.
Under Section 6 of the Consumer Protection Act, 1986 the protection of the six rights of consumers are being ensured. They are right to safety, information, choice, representation, redressal and consumer education, and provides for a simple, speedy and inexpensive redressal to the consumers' in the nature of a specific nature and also awards compensation, wherever appropriate, to the consumer. An exclusive three tier redressal machinery as an alternative to the civil court and other legal remedies available in the country has been established under the Consumer Protection Act. where an aggrieved consumer can seek redressal against any defective goods purchased or deficiencies in services availed, including restrictive/unfair trade practices adopted by such manufacturer and trader of goods/service provider. In the past thirty years more than 4.3 million consumer cases were adjudicated and decided by the consumer fora.
The Consumer Protection Act 1986 has defined the term consumer through 'goods' and 'services'. According to Section 2 (1)(d) of The Consumer Protection Act, 1986 'Consumer' means any person who :
1.Buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
2.hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for commercial purpose]. 
United Nations Guidelines on Consumer Protection (UNGCP)
UNGCP launched in 1985 was revised, after due deliberations by all stakeholders, in December 2015. The UN General Assembly on 22nd December 2015 approved the revised UNGCP 2015. India had actively participated in the process of revision of the UNGCP in 2015 and emphasized for having an oversight mechanism, which has been set up in the form of the Intergovernmental Group of Experts (IGE) under Guideline 95 of the revised UNGCP 2015. All the member states are de-facto members of the IGE. The first session of the Intergovernmental Group of Experts on Consumer Protection Law and Policy was held at the Palais des Nations in Geneva, on 17 and 18 October 2016 under the aegis of UNCTAD. Representatives from 66 countries and 5 intergovernmental organizations, including the heads of competition and consumer protection authorities, attended the high-level discussions. In the meeting, the Minister of State for Consumer Affairs, Food and Public Distribution, India, stated that the Intergovernmental Group of Experts provided a forum that facilitated engagement and mutual understanding, as well as the development of appropriate strategies to improve consumer protection. The Second IGE meeting held in July 2017, recognised the important role of relevant stakeholders, particularly with regard to the inclusive consumer protection policies to achieve the Sustainable Development Goals; It underlined the importance of designing and implementing specific measures aimed at the protection of vulnerable and disadvantaged consumers, recognizing that member States may adopt differing definitions to address specific domestic needs, and suggested further research in particular for this category of consumers in developing countries; It emphasized the importance of harnessing e-commerce to increase the welfare of consumers worldwide while limiting its potential risks and stressed the need to strengthen international cooperation, including informal collaboration, among agencies, to enhance consumer trust in e-commerce, and the initiatives taken to build trust in the digital economy.
Aimed at promoting the international cooperation in the field of Consumer Protection among the Asian countries, for mutual sharing of best practices, India in partnership with UNCTAD hosted an International conference on Consumer Protection on 26th and 27th October, 2017. Honourable Prime Minister Narendra Modi inaugurated the conference and mentioned that the "Protection of consumer interests is a priority of the government. This is also reflected in our resolution of the New India. Moving beyond Consumer Protection, New India will have Best Consumer Practices and Consumer Prosperity."
Way Forward
With the Indian economy and Indian industry growing leaps and bounds and with the changing market environment the Bureau of Indian Standards BIS Act, 2016 has been promulgated. BIS has also developed a consumer-friendly App called CARE, which can be used to access the information and lodge a complaint against an ISI marked product/ Hallmarked item. In order to protect the rights and interests of the consumers and promotion of uniformity and standardization of business practices and transactions in the real estate sector the Real Estate (Regulation and Development) Act, 2016 has been passed.  Further the government has launched INGRAM -Integrated Grievance Redressal Mechanism portal for bringing all stakeholders under a single platform. On one hand the National Consumer Helpline with its toll free number 1800-11-4000 or 14404 provides advice and guidance and empowers consumers. A smart consumer application has been launched to enable the consumer to scan bar codes and get all the details about the product.  Keeping into account the growing digital market in India and the asymmetry of knowledge amongst the various customer segments in India a New Consumer Protection Act, 2016 is likely to be passed by the Parliament soon. It is hoped that the new Consumer Protection Act would overcome the shortcomings of the existing law and it would give a big boost to the consumer movement.
(The Author is Associate Professor, Department of Commerce, Kamla Nehru College, University of Delhi. e-mail : sheetal_kpr@hotmail.com
Views expressed are personal.)
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