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CONSUMER PROTECTION AND CONSUMERISM IN INDIA BY: RUTVIJ RAJESH YEWALE
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CONSUMER PROTECTION AND
CONSUMERISM IN INDIA
AUTHORED BY: RUTVIJ RAJESH YEWALE
Roll No. 29
Progressive Education Society’s
Modern Law College
Ganeshkhind, Shivajinagar Pune
ABSTRACT
The process of development coupled with increasing liberalisation and
globalisation across the country
has enabled consumers to realise their increasingly important role in society andgovernance. However, concentration of the market
power in the hands of a select
few hasaffected consumers’
behaviour over time. In a developing country like India where the incidence of poverty and
unemployment is very high and the level of literacy is very low, the people face a volume of problems,
particularly in the context of consumer related issues. Unlike in the developed world, consumers in these
countries have not been able to play
a greater role in the development process. In this paper an analysis has been
to explore the consumer protection and consumerism in India.
INTRODUCTION
Consumer
rights are an integral part of our lives like the consumerist way of life. We
have all made use of them at some
point in our daily lives. Market resources and influences are growing by the day and so is the awareness
of one’s consumer rights. These rights are well defined and there are agencies
like the Government, consumer courts and voluntary organizations that work towards
safeguarding. While we like to know about our rights and make full use of them, consumer responsibility is an area which
is still not demarcated and it is
hard to spell out that all the responsibility is that a consumer is supposed to
shoulder. Consumer rights are the rights given to a "consumer" to protect him/her
from being cheated by
salesman/manufacturer/shopkeeper. Consumer protection laws are designed to ensure fair trade competition and the free
flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining
an advantage over competitors and may provide
additional protection for the
weak and those unableto take care of themselves. Consumer Protection laws are a form of government regulation whichaim to
protect the rights of consumers.1
The purpose of economic planning is to allocate resources, as far as
possible, for the maximum satisfaction of consumers’ needs. Any goods or services
produced in an economy are ultimately meant for consumers.
There is a logical, moral and political
force in the proposition that the consumers themselves should have the right to take decisions
1 https://consumeraffairs.nic.in/organisation-and-units/division/consumer-protection-unit/consumer-rights
about the allocation of
resources for their own needs. Realizing this need, the International Organization of Consumer Unions,
now known as Consumers International, took the initiative and under its consistent
lobbying, the United Nations adopted a set of Guidelines for Consumer Protection on April 9, 1985 which were revised in 1999. The Guidelines address the interests and needs of
consumers worldwide and provide a framework for Governments, particularly those of developing and newly
independent countries, to use for elaborating and strengthening consumer protection policies and legislation.
HISTORICAL BACKGROUND
In the early
years when welfare legislatures like the consumer protection Act did not exist, the maxim Caveat emptor (let the buyer
beware) governed the market deals. We find the
seeds of consumer protection during the Mughal times and especially
during the time of Khiljis. It is
said that Sultan Ala-ud-Din Khilji (1296 A.D. to 1316 A.D.) had introduced strict price control measures based on
production costs. He had also established separate shopping centers in Delhi for (1) grain,
(2) cloth, sugar, dried fruits,
herbs, butter, and oil,
(3)
horses,
slaves, and cattle, and (4) miscellaneous commodities. The supply of grain was ensured
by collecting tax in kind in the production areas and keeping
it in the royal storehouses. Hoardings of grain were
forbidden. Elsewhere the growers were ordered to sell their grains for cash in their fields at fixed prices and were
not allowed to take any grain home
for private sale. The market controller, the state intelligence officer, and
the Sultan’s secret agents, each
submitted independent reports on these shopping centers to the Sultan. Even a minor violation of the rules was not tolerated.2
The shopping center for cloth, known as the sara-i-adl, was established near one of the royal palaces on the inner side of the Bada-un-Gate. All goods, including foreign imports, were first taken there and their price fixed. Every merchant was registered with the commerce ministry and had to sign a bond guaranteeing a regular supply to the goods in which they traded. The Hindu Multani merchants were advanced money by the treasury to import rare commodities for the sara-i-adl, some price were subsidized. Costly fabrics and luxury goods could be sold only to those who have obtained permits from the Government. The prices of cattle were also fixed and unscrupulous merchants were deprived of their trading rights.
The shopping center for general commodities was under the direct control
of the commerce ministry.
Ala-ud-Din’s Minister of commerce was also the Superintendent of weights and Measure
and the Controller of the Commercial transactions. He was assisted
by superintendent for each
commodity. Prices and weight and measure were checked by sending
the children employed in the royal pigeon-house to buy petty articles. The
prices fixed for the Delhi market
were also applied in the provincial
capitals and towns.
During the
British regime (1765-1947), also known as the ‘Colonial Era’, Government’s economic polices in India were concerned
more with protecting and promoting the British
interests than with advancing the welfare of the native population. The
administration’s primary
per-occupation was with maintaining law and order, tax collection and defence. Accordingly much of the legalisation
enacted during the British regime was primarily aimed at serving the colonial
rulers intend of the natives. There
were, however, some pieces of legislation which protected the
overall public interest through not necessarily the consumer interest. Prominent among these were: the Indian Penal
code, 1860, the sale of Goods act, 1930,
the dangerous drugsact, 1930 and the drugs and cosmetics act, 1940. In a sense, the sale of good act, and the principles of the law of torts were more for the protection of the trader than the
consumer.3
THE POST INDEPENDENCE SCENARIO
– The struggle for India’s
independence was over by 15th August, 1947. However, the attainment of independence was not an end in itself.
Due to the increased emphasis on industrialization during the second five year
plan, there was tremendous growth and
establishment of heavy industries. As a result there was a considerable amount of migration
of rural population to the urban areas in search of employment,
as India is characterized by a vast amount of disguised unemployment in the agricultural sector. Growing urbanization due to heavy industrialization resulted
in proliferation of human
needs-of basic necessaries and also of luxuries. Due to the shortage of certain necessaries and even their
non-availability at reasonable rates with growing menace of adulteration, it was found necessary to
empower the Government to control their production, quality, supply, and distribution. Therefore
the decade of 1950s, right from the very beginning, saw the enactment
of a number of laws to safeguard
the interests of the consumers
from various angles.4 The enactment of the Banking
Companies Act,1949 (later
3 https://www.meritnation.com/cbse-class-12-commerce/economics/indian-economic-development-ncert- solutions/unit-i-indian-economy-on-the-eve-of-independence/ncert-
4 https://ncert.nic.in/textbook/pdf/hess210.pdf
called The Banking Regulation
Act) to amend and consolidate the Law related to banking matters as well as the Industries(Development and
Regulation)Act,1951 to implement the Industrial
Policy Resolution of 1948 were among the earliest stapes taken by the National Government in India in the direction of consumer protection.
With the continuous industrialization and urbanization, environmental
problems also came more to the
forefront, but seldom got any worth while attention of Indian planners and
policy makers till the fateful
incident of Bhopal in 1984. Thus the Bhopal catastrophe, perhaps for the
first time, focused considerable attention on the industrialization
hazards, environmental pollution,
Government responsibility and business accountability. The Union Carbide
tragedy also highlighted the potential
risks to the lives of the citizens
or consumers from the operations transnational corporations
in foreign lands.
Now with the opening up of the Global Market and economics and
progressive removal of international
trade barriers, two phenomenon’s
have been witnessed with.
First, there is influx of foreign
brands and franchises. Second, within India, there is increasing
competition among manufacturers which
has benefited consumers in the form of
improvement in quality of goods and resources. Thus in turn has witnessed more
and more legislations aimed at regulating the manufacturing and trading activities and providing protection to consumers at large. Now the maxim caveat emptor has been replaced
by, “let the seller beware”. As a result of this change in scenario business
has now come to besubstantially regulated
by Government and Authorities in
favor of consumers.5
MEANING AND REASONS FOR CONSUMER PROTECTION
Consumer protection means safeguarding the rights and interests of
consumers. It includes all the measures aimed
at protecting the rights and interests of consumers. Consumers
need protection due to the following reasons6:
1.
Illiteracy
and Ignorance: Consumers in India are mostly illiterate and ignorant. They do not understand their rights. A system is required to protect them from unscrupulous businessmen.
6 https://ncdrc.nic.in/bare_acts/1_1_2.html
2.
Unorganized
Consumers: In India consumers are widely dispersed and are not united. They are at the mercy of businessmen. On the other hand, producers
and traders are organized
andpowerful.
3.
Spurious
Goods: There is increasing supply of duplicate products. It is very difficult
for an ordinary consumer to
distinguish between a genuine product and its imitation. It is necessary
to protect consumers
from such exploitation by ensuring compliance with prescribed norms of
quality and safety.
4.
Deceptive
Advertising: Some businessmen give misleading information about quality, safety and utility of products. Consumers
are misled by false advertisement and do not
know the real quality of advertised goods. A mechanism is needed to
prevent misleading advertisements.
5.
Malpractices
of Businessmen: Fraudulent, unethical and monopolistic trade practices on the part of businessmen lead to
exploitation of consumers. Consumers often get defective, inferior and substandard goods and poor
service. Certain measures are required to protect the consumers against such
malpractices.
6.
Freedom
of Enterprise: Businessmen must ensure satisfaction of consumers. In the long run, survival and growth of business is
not possible without the support and goodwill of consumers. Ifbusiness does not protect consumers' interests,
Government intervention and regulatory measureswill grow to curb unfair trade practices.
7.
Legitimacy
for Existence: Business exists to satisfy the needs and desires of consumers. Goods are produced with the purpose of
selling them. Goods will, in the long run, sell only whenthey meet the needs of
consumers.
8.
Trusteeship:
Businessmen are trustees of the society's wealth. Therefore, they should use this
wealth for the benefit of people.
The Guidelines developing policies for consumer protection7
7 https://unctad.org/topic/competition-and-consumer-protection/un-guidelines-for-consumer-protection
·
Promotion of sustainable consumption
·
Measures relating
to specific areas like water, food and pharmaceuticals.
These areas have been translated into the following
eight consumer rights
by theConsumers’ International8:
1)
Right to Basic Needs;
2)
Right to Safety;
3)
Right to Choice;
4)
Right to Information;
5)
Right to Consumer Education;
6)
Right to Redressal;
7)
Right to Representation; and
8)
Right to Healthy Environment
CONSUMER PROTECTION AND CONSUMERISM IN INDIA
|
POVERTY AND
UNEMPLOYMENT
|
|
CONSUMERS ARE NOT ORGANISED
|
An examination of the
important problems facing the Indian consumer would make clear the need for more effective government intervention
and consumer movement to safeguard consumer
rights.9
The
following factors make the plight of the Indian consumer miserable10.
1. Short supply of many goods and services, especially of essential items,
is a very serious problem afflicting
the Indian consumer. The
demand-supply imbalance has produced
all the associated evils of profiteering, hoarding and black-marketing, corruption, nepotism, irresponsiveness and
arrogance towards consumers.
Although the situation has improved as a result of the increase in competition due to liberalization, it is still far
from satisfactory.
2. The Indian consumer is also the victim of lack of effective or workable competition. “Competition among sellers, even though imperfect, may be regarded as effective or workable if it
offers buyers real alternatives sufficient to enable
them, by shifting
their purchases form one seller
to another,
10 https://consumeraffairs.nic.in/sites/default/files/file- uploads/consumer_information/Consumer%20Handbook.pdf
substantially to influence quality,
service, and price. Effective competition depends also upon the general availability of essential information; buyers cannot influence the behaviour of sellers
unless alternatives are known. It requiresthe
presence in the market of several sellers, each of them possessing the capacity
to survive and grow, and the preservation of conditions which keep alive the threat of potential
competition among sellers is thus to be found
in the availability of buyers of genuine
alternatives in policy among their sources
of supply.”
3. Many products with which consumers in advanced countries are quite familiar are still new to a very large
segment of the Indian consumers. The unfamiliarity of the consumers
with product features
makes the sale of substandard, inferior or even defective
products easier in India than in advanced countries.
4. Due to low literacy levels and unsatisfactory information flows, the
Indian consumers, by and large, are not conscious of all their rights. This encourages irresponsible and unscrupulous business
attitudes and tactics.
5. It has been said that the legal process in India is comparatively time- consuming and cumbersome. This discourages the consumers from
seeking the redressal of their grievance by means of the judicial process.
6. Consumerism in India is not well organized and developed.
7.
Though the public sector had not been
developed and expanded to serve the
public interest by providing effective competition to the private sector, increasing production, improving
distribution, etc., it failed to produce benefits
that werecommensurate with the investment.
8. Though there are a number of laws to safeguard the interests of consumers, they are not effectively implemented and
enforced to achieve the objectives. The above factors are effective State intervention and consumerism to ensure the rights of consumers.
GOVERNMENT MEASURES
In
India, the Government has taken a number of
measures to protect consumer interests. The various Government measures may be classified
into
(i)
statutory
regulation of private business, and (ii) development of the public sector.11
Statutory Regulation: The government has enacted
nearly 50 laws which can
be interpreted in favour of consumer. Government of India has armed itself with a number of statutory weapons
to control the production, supply, distribution,
price and quality of a large number of goods and services. It is empowered to regulate the terms and conditions of sale, the nature of
trade and commerce, etc. Some of
such acts have been as
follows.
Growth of Public Sector: There had been a significant growth
and expansion of the public sector in
India. One of the most important objectives of
the public sector was the enhancement of consumer welfare
by increasing
11 https://iritm.indianrailways.gov.in/instt/uploads/files/1436167821091- Notes%20on%20Consumer%20Protection%20Law.pdf
production, improving
efficiency in production, improving efficiency in production
and supply, making available goods and services at fair prices, curbing private monopolies and reducing
market imperfections, improving the
distribution system, and so on. The public sector, in fact, is expected
to implement the societal marketing concept12.
There is, however, a
general feeling that the public sector in India has still a long way to go to realize these objectives. It has
established monopolies or near-monopolies in public utilities, whose performance is far from satisfactory.
CONCLUSION
Invariably, consumers are a vulnerable lot for exploitation, more so in
a developing country with the
prevalence of mass poverty and illiteracy. India too is no exception to it. Instances
like overcharging, black marketing, adulteration, profiteering, lack of proper services
in trains, telecommunication, water supply, airlines,
etc are not uncommon here. From time
to time, the government has attempted to safeguard consumer's interests through legislations and the CPA 1986 is
considered as the most progressive statute for consumer protection. Procedural simplicity and speedy and inexpensive
redressal of consumer grievances as contained in the CPA are really unique and have few parallels in
the world. Implementation of the Act reveals that interests of consumers are better protected
than ever before.
However, consumer awareness
through consumer education and actions by the
government, consumer activists, and associations are needed the most to make consumer protection movement a success in the country.
12 https://dpe.gov.in/sites/default/files/Chapter-1-Overview%20%26%20Profile_Final_0.pdf
REFERENCES
Article Information
CONSUMER PROTECTION AND CONSUMERISM IN INDIA BY: RUTVIJ RAJESH YEWALE
Authors: RUTVIJ RAJESH YEWALE
- Journal IJLRA
- ISSN 2582-6433
- Published 2024/04/24
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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