Introduction to Consumerism

The marketing concept is a philosophy of providing services to mutual gain. If this concept is followed, it can help the economy to satisfy the diverse and continuous needs of its ever- growing number of consumers. However, not all marketing practices follow this theory.

Very often, firms are seen engaging themselves in questionable marketing practices and transactions, which though may seem innocent in themselves, have profound implications on the society at large. For instance, if one were to consider the sale of cigarettes as a transaction between the marketer and the smoker, the transaction involves public interest also. This is because the smoker may be shortening his life by smoking. This will cause harm and places a burden on the smoker's family and the society at large. Lastly, other people in the presence of the smoker may have to inhale the smoke, feel uncomfortable and can also be prone to cancer through passive smoking. Hence the government's decision to ban such transactions especially at public places. This only goes to show that private transactions may invite profound questions about public policy and intervention.

Public policy does affect the field of consumer behaviour when the public policy-makers are confident that Government intervention in the marketing transactions is necessary, so as to ensure that such transactions are beneficial to the society as a whole. With the changes occurring in the socio-economic environment, very often market place abuses are brought to the notice of the policy decision-makers, either through the media, consumer awareness groups, consumers themselves or through the public recognition of the need for the economic or social-welfare programmes.

In order to advocate its role as a public decision-maker, the Government uses intervention in the form of regulation measures, and consumer education programmes to communicate and encourage desired behaviours. The regulation measures include prohibiting certain types of marketing practices (selling of unsafe goods), make certain practices mandatory (provide information on the food label), and restrict against indulging in certain practices like misleading and deceptive advertising. Consumer education can be done by using various media to communicate, inform and educate them about the importance of eating healthy food, the importance of pre-natal care, to live in harmony with nature, i.e., environmental conservation, importance of education, the reasons behind drug abuse, etc. The people at large believe that it is the Government's responsibility to promote and protect the public interest and also to contribute for the general welfare.

Social critics have accused the marketers of hurting and harming the consumers by engaging themselves in practices such as: high prices, deceptive practices, high pressure selling, shoddy or unsafe products, planned obsolescence and poor services. Thus, firms are confronted with important changes in the socio-political environment, which has led to the growth of consumerism and legislative measures to protect the consumers. Originally, the consumer movement had its conspicuous beginning and had picked up momentum in the United States. Slowly this awareness spread to the other countries, resulting in the growth of consumerism and the growing awakening and the demand for consumer protection.

This consumer awareness and the impact, though still in the infancy stage, has started growing in India. Here, there is felt a growing consumer awareness and feeling of being exploited. Several organisations are active in conducting researches and exposing substandard quality of products and other activities like indulging in adulteration practices, etc. These consumer organisations are also involved in responding to public outcries against dishonest or unethical business practices. They also play an active role in redressing consumer grievances.

Consumerism in India

In the words of Peter F. Drucker, the father of management science "Consumerism is the shame of the total marketing concept". Every organisation should take marketing decisions keeping in mind the company's requirements, the consumers' long-term interests and lastly the society's long-run interests. Neglecting the consumers and the society's long-term interests will not only prove to be a disservice, but also give cause to raise the wrath of the consumerists. So, it would be preferable if companies recognise societal problems as presenting opportunities. As stated by Peter Drucker, "Consumerism actually should be, must be and hope will be the opportunity of marketing. This is what we in marketing have been waiting for. "

In India, as a developing economy, it is felt that the plight of the consumers are not different from that of their counterparts in the rest of the world. Inspite of the fact that not all Indian consumers are well-educated and hence, unable to comprehend and understand the complex methods of marketing, they are also exploited and very often become victims of false claims for products, misled by deceptive advertisements, deceitful packaging, poor after-sales service and so on. Because of the above felt abuses, there is observed and seen a growing consumer awareness leading to the growth of consumerism and an increasing demand for consumer protection in India.

Consumerism can be said to be still in its infancy stage. But the consumer movement is slowly gathering momentum. It is a social force used to protect the consumers against the unfair marketing practices occurring in the transactions between the sellers and the buyers. At times, there is a deliberate attempt on the part of the marketer to adopt misleading, false or deceptive advertisements, where only half-truths are offered to the consumers, so as to give a different impression and create a different image as compared to the actual fact. It has been observed that the Indian consumers are cheated to the tune of Rs. 2000 crores annually through various devises invented by the clever businessmen and traders, unsafe products, adulteration, misleading advertisements, black-marketing, false warranties, etc. In 1990s also, after the liberalisation of the economy, the market was again flooded with varieties of goods and services. The difference in the scene now is the continuous entry of new competitors, willing to make enormous investments for long-term market shares, fast falling margins cutting into the profitability of many marketers, rapid rise in the consumer earnings, fall in the savings rate resulting in generating increasing amounts of disposable income to be spent on consumer products and services. The advent of the information age has brought with it real time images of the global lifestyle; and thus making high spenders and budget shoppers spend lavishly on products and services.

Under the above circumstances, "Survival of the fittest" was the motto. This resulted in marketers using wrong means to increase their market share rather than facing the situation of being wiped out from the market place. The following situational factors also aided the marketers:

• The vastness of a country like India, along with an imbalance in the distribution of income and wealth and backwardness of the people came in the way of organising consumer awareness and movements

• The high rate of illiteracy and ignorance among the majority of the population

• Onslaught from the unscrupulous businessmen due to the traditional outlook of the people to suffer in silence, lack of education and information

• Unable to understand the technical complexity of the goods and thus, accepting the information given by the manufacturers or sales persons on face value

• Indian consumers getting carried away by the clever advertising and promotional tactics used by the marketers

It must be remembered that while on one hand the manufacturer has got the right to design manufacture, distribute, advertise and price the product, the consumer has got the right to decide whether or not to purchase the product. However, the consumer is not in a position to exercise this power, while purchasing a product or service. This is because of either the lack of information or excess of indigestible information or conflicting information received from one or more competing firms. This has resulted in the rise in consumerism. To quote Mr. T. Thomas (Ex-Chairman, HLL). "It is worthwhile to note that consumerism, like several other social movements, e.g. Independence Movement, Civil Rights Movement, etc. has been the result of a social conflict and cannot therefore, be wished away. It will be till the conflict facing the consumer is resolved".

The Indian Consumer

Philip Kotler had long back emphasised that the original marketing concept has to be broadened to include the societal marketing concept. According to him, alongwith the inclusion of the long-run consumer welfare concept, the businessmen must also consider including social and ecological considerations in their product and market planning. By doing this, they are not only meeting their social responsibilities but also taking care so as to avoid hurting their long- term interests as producers. Only if such a concept is practiced will an enlightened marketer be able to prevent the rise of consumerism.

But consumerism today, as a collective action of the consumers to protect their own interests indicates failure on the part of the business system, which includes the public policy-makers and the Government to guarantee and ensure the legitimate rights of the consumers. And this is also the reason behind consumer seeking protection. To ensure consumer protection, the onus of responsibility lies on the shoulders of three groups of people namely: the business, the Government and the consumers themselves.

There are several problems faced by the Indian consumers, thus making it necessary to have an effective and more involvement from the Government and consumer movements to safeguard the consumers rights. The factors responsible for the sad plight of Indian consumers are given hereunder:

• Very often, India faces a severe imbalance in the demand and supply of essential commodities. This has produced evils in the form of hoarding and black-marketing profiteering, corruption, nepotism, red tapism, irresponsibility and arrogance while dealing with the consumers.

• With low literacy levels and incorrect and unsatisfactory information generated, many of the Indian consumers are not consciously aware of their rights. This further encourages businessmen to develop indifferent attitudes and behaviour towards their consumers.

• Though the market is flooded with many goods and services, there is seen an imperfect and ineffective competition. For, in a perfect (competition) market, the buyer may be in a position to substitute one product for another with visible differences in the quality, service and price of the products. But in the existing scenario, apart from the lack of general essential information, there are very few sellers available in the market, who can keep the competition alive and also work to avoid the threat of potential competition by offering equally good alternative products and services to the consumers. Thus, the Indian consumer becomes a victim of ineffective competition and is forced to make a choice from the available few alternative goods and services. This holds true, more often for consumables purchased in the medium price ranges.

• In the absence of proper information and unfamiliarity with some of the new product features, consumers, at times, become easy victims and accept substandard, inferior or even defective products.

• Consumerism is still in its infancy stage and hence, not well-organised and developed as in the developed countries.

• The legal framework and system in India is a time-consuming and tiresome process. Thus, consumers are hesitant to seek redressal of their grievances by taking the help of the judiciary.

• The Government had started the public sector undertakings (PSUs) to serve the public interest by providing effective competition to the private sector, increase production, etc. However, these units are yet to produce benefits that will be commensurate with the investments. The basic objective behind investing and encouraging the growth of public sector was to encourage the concept of consumer welfare. But as far as performance is concerned, many of the public sector monopolies are making the life of consumers miserable. To quote a few examples, the services provided by some of the State-owned electricity boards is very poor. Very often, consumers are compelled to make hard payments for the services hardly received by them. The state of the public roads in the various cities and towns are always uneven with many potholes, thus causing more inconvenience and harm to the people and all the vehicle users, who make use of the roads.

• The existing laws which have been framed to protect and safeguard the interests of the consumers at large, are not being effectively implemented and enforced to achieve the said objectives.

From the above discussions, we can see that many of the above pitfalls can be removed if active participation is there from the business, Government and the consumers.

• The business, comprising of all the manufacturers and intermediaries must take up the responsibility to ensure efficiency in production and quality of the output. They must also abstain from resorting to unhealthy practices like charging exorbitant prices, or hoarding and black marketing. Thus, voluntarily the businessmen themselves should take up the responsibility to ensure that qualitative goods and services reach the ultimate consumer in time and at reasonable prices.

• The Government can come to the help of the consumers and prevent them from being exploited, by passing certain legislations to protect the consumer and also by having certain statutory bodies to prevent firms from exploiting the consumers. The Government has also included consumer protection as an item of the 20-point programme. A Consumer Advisory Council has been set up by the agencies, including the State Governments, the Textile Committee and the Department of Science and Technology Added to this, the Government is seeking to increase the awareness of the consumers rights through various media. Doordarshan has been organising programmes like Lok Samasyani, Jansad, Janavani, etc.

• And lastly, consumers themselves should assert their rights and protect themselves from business malpractices. They should accept consumerism and work towards making the businesses and Government more responsive to the rights of the Consumers. Various consumer movements have also been organised in many parts of the country and there are as many as 237 or so consumer organisations working towards consumer protection.

Reasons Behind Rise of Consumerism

Consumerism as a social force can help to:

• Make the business community more honest, efficient, responsive and responsible. The manufacturers and sellers will be compelled to adopt fair trade practices, when consumers learn to exercise their rights and are not taken for granted.

• Consumerism can also be viewed as an opportunity for businessmen to serve the consumers in a better and more efficient manner. It will prove to be a weapon for marketers to effectively implement the societal concept of marketing.

• In case of imperfections in the demand and supply situation in the market, concerned marketers can help the consumers to get rid of the traders who resort to practices such as hoarding, black-marketing, etc.

• Consumerism will also ensure that the Government takes the necessary measures to protect consumer interests by guaranteeing their legitimate rights.

Deceptive Advertising

Advertising is a vehicle through which the marketer seeks to communicate, inform, appeal and guide consumers in their decision-making process. But at times, the advertiser will mislead the viewer by imparting incorrect information. An unfair ad is one in which the advertiser withholds information, which may result in causing harm to the consumer. A deceptive ad contains explicit or implied claims or omissions which are likely to mislead a consumer acting reasonably under the circumstances.

For instance, the claim made sometime back by Colgate toothpaste to be 102% better as compared to the competitors or the claim of HLL that in Wheel detergent powder, lemon is an inbuilt ingredient which helps in removing the dirt. The above mentioned instances are just two of the many advertisements which were used by businesses to take their consumers for a ride.

Unfortunately, till recently there was no proper legislation to put a check on the misuse of advertisements by the marketers. Now the MRTP Act empowers the MRTP Commission to deal with such false claims or in the event of misuse of advertisements by advertisers.

Over and above this, the advertising professionals have also adopted a self- regulation mechanism by observing a code of conduct which is to be followed for advertising products. The Advertising Club of India (ACB) in 1982, formulated a regulatory code of conduct for the profession and was to be applicable to all those concerned with advertising - advertisers, the ad agencies and the media. The advertising code is as follows:

• The concerned people (in the advertising) have to make 'honest' claims and should not mislead the consumer.

• The portrayal of the advertisements should be within the accepted standards of public decency.

• Ensure and safeguard against the excessive promotion of products, which are considered to be dangerous or hazardous to the society or individual.

There have been instances when companies had to seek the help of the MRTP Commission when competitors made false or misleading claims about them in the advertising campaigns made by the latter, observe fairness in competition between different brands of the same product or a product and its substitute. 

As seen above, the advertising code will seek to meet two purposes:

• Ensure consumers protection against spurious advertising

• Works as a guarantor that a self-regulation measure is adhered to and guarantee that the set standards of morality are upheld.

Those connected with the advertising profession have also established a public body (à public limited company, The Advertising Standards Council of India (ASC)), whose job is to ensure the implementation of the advertising norms and standards. This is a non-profit organisation set up by 43 members who are connected to advertising in one way or the other. By formulating a regulating code, it has got the necessary authority to adjudicate on whether an advertising is offensive in nature. The final decision taken by the ASCI will be binding on its members. It also poses to deal with the Government, in case of any disputes.

The above mentioned code of conduct was worked out, inspired by a similar code of the Advertising Standards Authority (ASA), U.K. The ultimate aim being to ensure the adoption of fair advertising practices in the best interest of the ultimate consumers.

Apart from the above, there are three professional bodies concerned with the three types of people connected with the advertising world in India - the advertiser, the advertising agency and media of advertising. The ISA - The Indian Society of Advertisers, is the only representative body of advertisers. The AAAI, the Advertising Agencies Association of India are the agencies who undertake advertising on behalf of the advertisers. And the INS - the Indian and Eastern Newspapers Society which refers to the media or the organisations of newspapers, magazines and other publications.

Advertising, if used properly can contribute to consumer welfare, because in a persuasive language it can inform the consumers and tell them what to buy, how to buy, where to buy and why to buy along with the price to be paid for the products or services. But all the problems start only if advertising is misused or deliberately gives wrong information to the consumer. Box 14.1 had thrown light on how the MRTPC cautioned BPL against giving false claim in its ad. In the words of Rothenberg "Advertising does not work by entertaining or assaulting the intellect of its audience... Nor does it work through subliminal manipulation. Instead, as the great ad man, Bruce Barton had acknowledged decades before, was "Something big, something splendid, something which goes deep down into an institution and gets hold of the soul of it (Source S. A. Chunawalla, K.C. Sethia, "Foundations of Advertising Theory & Practice", Himalaya Publishing House, Mumbai, 1997).

Truth about Labelling and Product Performance

There also arises questions related to the truth in labelling and packaging. Good packaging will communicate about the quality of the product and helps in creating a value for the product. The packaging is used as a vehicle which carries details related to the manufacturer's name, brand name, trademark, all other information about the ingredients and also gives directions on its usage.

Given below are complaints received against Ads by ASCI and MRTPC 

Thus, labelling is a part of the package giving additional information to the consumer about the product. Just as ads, even labels could be misused. To put a check-on such misuse, the Government has passed the Central Packaged Commodities (Regulation) Order, 1975. This act makes it mandatory on the part of the manufacturer to ensure the following information is disclosed on the label of the product:

• Name of the manufacturer, Date of manufacture

• Date of expiry

• Net weight of the product

• Maximum Retail Price (MRP)

Consumers also have the right to expect the products they purchase to perform as stated and claimed by the manufacturer. Further, it is also the moral responsibility of the producer to ensure that the products are safe. In the marketing environment today, when more and more complex and varied products are available it is the moral responsibility of the manufacturer, to provide the necessary instructions manual to the consumer along with the product. It is also necessary to get the product tested before getting it affixed with the necessary quality standards approval.

It has been assumed that consumers can purchase products which have got the above mentioned marks which will ensure quality and safety for the consumer. Inspite of all these measures, it is said that Indian consumers are cheated to the tune of Rs.2000 crores annually through various devises created and used by clever businessmen and traders. Eighteen out of twenty-two pressure stoves tested at the instance of CGSI failed to clear the Important Safety Tests and all thermometers tested failed to register temperature accurately. Similarly, there are also many products which have been tested by various consumer organisations and found not to be as accurate in performance as it should have been. These organisations are demanding governmental action against the manufacturers to ensure that the quality standards are met with. This calls for effective State intervention and Consumerism is necessary to ensure and protect the right of the consumers.

Typical Malpractices and Unfair Trade Practices

The business malpractices could include improper: quality of the product, pricing of the product, non availability of products (improper distribution), misleading advertisement of the product, tax evasion, violating laws such as FEMA, etc. Some of the typical malpractices affecting consumers are:

Absence of Quality Control and Safety Measures

Indian manufacturers in the past have shown indifference towards maintaining the quality of the product. As a result of this, the product finally reaching the lands of the consumers may not be of the desired quality. As we are competing with global competitors today, Indian manufacturers need to view the 'quality' aspect of the product very seriously so that it is built into the product right from the idea inception stage.

Improper Weights and Measures

Most of the commodities in retail outlets are sold in terms of weight of a particular quantity, for which the customer is paying the price. However, often customers have found that there are variations in the quantity mentioned and received by them. Probably due to faulty weighing equipment used by the retailer. Inspite of the government's efforts at informing and educating consumers about such practices, the existing legal formalities is grossly inadequate to deal with such malpractices.

Adulteration

Adulteration is mostly found to be related to the sale of food products. This practice can be found to the food products sold in loose by some of the Kirana shops; where the food products could be mixed with cheaper or inferior substances. Cutlets indulging in such practices often take the consumers for a ride. Inspite of the Food Adulteration Prevention Act since its implementation is very slack and due to many loopholes in our legal system, such traders are able to go scot free.

Black Marketing and Profiteering

Sometimes traders adhere to black marketing, especially when there is a big gap between the supply and demand owing to shortages of certain commodities in the making. Under such circumstances, some traders resort to selling those products at exorbitant prices, which is a type of profiteering. Such actions on the part of traders not only causes consumer exploitation but can also put genuine customers at a disadvantage.

Apart from the above there are other types of trading activities such as selling imitation products in the guise of real goods, smuggling, gambling etc. These are practices which can affect the customer satisfaction and their loyalty in the long run.

Benefits of consumerism

It is very necessary to have, a well-developed consumerism in India, for the benefit of and to protect the consumer rights. But, inspite of the best efforts put forward by the various consumer organisations few names were given in (the list mentioned earlier in the chapter), not much consumerism with practical utility has taken place in the country. This is partly because of the lack of consumer education among the public and partly, because very often the mass consumer protests demonstrated against market imperfections, (shortages or price rise, etc.) has the involvement of the vested interests of the political parties. Further, the little organised consumer movements has generally been confined to the major urban cities and towns, whereas there is a huge majority of consumers in the rural areas, who have not been involved in such movements.

If organised well, with involvement of many more consumers, consumerism will gain momentum and benefit the consumers in many ways, such as:

Consumer Education

Over and above protective legislation and regulation, consumers need to be informed and educated to enable them to make wise purchase decisions. It is observed that even the presence of Government regulations and consumer action groups cannot always protect the consumers against all the marketing abuses. So the best weapon in the hands of the consumers will be to-have more information and knowledge about the product, company, etc. This is possible only if the consumers are educated in the real sense. Even the marketing firms could help by providing the necessary education material to consumers. Another proposal is for the firms to make provisions through the development of computerized data banks containing product information (prices, availability, etc.) and general educational information to their potential customers. By sharing such information, the firms cannot only develop relationship marketing with their customers but also make them educated customers. As the saying goes "Educated consumers make better customers."

Liaison with Government and the Producer

Consumer advocates who are organising the various consumer movements should realise that in a developing economy like India, where consumerism is still in its infancy stage. Government efforts can go a long way in meeting consumer needs. Thus, they can play the key role by maintaining liaison with the Government on one hand, and the manufacturers on the other.

Product Research and Inform the Consumers

Product research is a part of the broader term consumer research, which is a part of the marketing research. Product research will help in the generation of more product knowledge, in terms of its various attributes, information related to prices, ingredients, competing brands, utility value and so on.

There are various research organisations such as MARG, ORG, etc which conduct researches on an ongoing basis. At times, such findings get published in various leading magazines also. Similarly, product ratings will enable the consumers in making a choice of products. The consumers can use such information to ascertain the merits of the product in terms of its convenience, portability, style, comfort, durability, etc. So when consumers make a purchase decision after the receipt of such information, it is less likely that they are misled or taken for a ride by the marketers.

Consumer researches and market segmentation will ensure a better 'match' between the products and consumers and also enable the marketers to communicate more efficiently with their target markets.

Government  Measures

In India, the Government has taken a number of measures to protect the consumer interest.

 These measures can be classified into two categories

• Statutory regulations of private business

• Development and expansion of the public sector.

Statutory Regulations

These statutory regulations empowers the Government of India to control the product, supply, distribution, price and the quality of a large number of goods and services. Our Government can exercise control over the terms and conditions of sale, the nature of trade and commerce and so on. According to an ex-chairman, Hindustan Lever Ltd., “Unlike in the West, the Government in Indian has a large number of controls on industry and is therefore, in a position to respond more swiftly and effectively than Western Governments. In some ways, our bureaucracy has perfected the art of assuming the guardianship of all interests of the consumers and the vulnerable sections".

The many important legislations enforced by the Government to protect the consumer  interests are as follows:

• The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969

• Industries Development and Regulation Act, 1951

• Essential Commodities Act, 1955

• Prevention of Food Adulteration Act, 1954

• Prevention of Black-Marketing and Maintenance of Supplies of Essential Commodities Act

• The Indian Sale of Goods Act, 1930

• ISI Certification Mark Act, 1952, AGMARK

• Trade Marks and Merchandise Marks Act, 1958

• Agricultural Products Grading and Marketing Act, 1937

• Drugs Control Act, 1950

• Indian Standard Institute's Certification Act, 1952

• Standard of Weights and Measures (Packaged Commodities Rules, 1977)

• Consumer Protection Act. 1986

• Imports and Exports Control Act, 1947

• Packaged Commodities (Regulation) Order, 1975

• The Drugs and Cosmetics Act, 1940

• Foreign Trade (Development and Regulation Act), 1992

The Monopolies and Restrictive Trade Practices Act, 1969 and the Consumer Protection Act, 1986 are of great relevance to consumerism and in the consumer's interest. A very significant aspect of the MRTP (Amendment) Act of 1984 is the provisions to control unfair trade practices.

Growth and Expansion of the Public Sector

Our economy is characterised by the co-existence of the public, private, joint and cooperative sectors. There is a lot of significance in the growth and expansion of the public sector in India. The most important objectives of the public sector undertakings is the enhancement of consumer welfare by increasing production, improving efficiency in production and supply, to ensure the availability of goods and services at fair prices, to reduce market imperfections and curb private monopolies, improve the distribution system, etc.

According to the Bureau of Public Enterprises; "The public enterprises is born as the outcome of the conscious policy of the Government to speed up the industrialisation of the country, with a view to give added impetus to economic growth as well as to achieve certain socio-economic goals as enunciated in the Industrial Policy resolutions of the Government. These enterprises today cover a wide spectrum of activities in basic and strategic industries like steel, coal, minerals and metals, petroleum, heavy engineering, chemicals, fertilizers and pharmaceuticals, etc. on the one hand, and consumer goods, trading and marketing activities, transportation services, contracts and consultancy services, tourist services, financial services, development of small industries, etc. on the other. While some of these enterprises operate under monopoly or near monopoly conditions, there are others working under competitive conditions. There is yet another segment of the public enterprises, viz., sick enterprises taken over from the private sector to protect employment. Thus, public enterprises comprise units engaged in different spheres of industrial and commercial activities, some long gestation-low profitability enterprises; some sick and hence, requiring special treatment, while some others are low-sick high profitability enterprises. Added to this basic diversity in the composition of the units is the multi-dimensional objectives of public enterprises in general, which is another significant factor to be considered while making any realistic analysis of their performance."

Thus, the public sector has a very important role to play in the development of this vast and populous developing economy characterised by the dearth of capital, entrepreneurship and technology. But in India it has been observed that the public sector is lagging very much behind in the objectives set at the time of its formation. Most of the public sector undertakings are enjoying either monopolies or near monopolies in their areas of operation, but their performance is far from satisfactory. Examples of such units which are operating with accumulated losses are some of the SOEs like the State Electricity Boards, State Transports, etc. These SOEs and PSES (Public Sector Enterprises), enjoying monopoly are not only making huge losses but are also, causing severe resource constraints in the face of the large revenue, budgetary and fiscal deficits which the nation has been enduring. To make up for the deficits, the Government is compelled to put the burden on the public by increasing taxation. Why should the Government impose financial burden on the citizens by running inefficient enterprises? Why should the public bear the brunt for the loss making State-owned luxury rioter and buses, making soaps and detergents, cosmetics, bread and a variety of other products? Indeed, we as consumers do have a right to choose. One of the objectives of the Consumer Protection Act, 1986, is "the right to be assured, whereever possible, access to a variety of goods at competitive prices".

Further, certain laws like the MRTP Act are not binding on the public sector. It has been rightly observed by the Sanchar Committee. There is no justification for exempting Government and Government-controlled/owned undertakings from the provisions relating to control and prohibition of monopolistic and restrictive trade practices and the provisions related to unfair trade practices The beneficiary of monopoly legislation is the consumer and it is only fair and reasonable that undertakings owned or controlled by the Government should be subjected to the same type of rigour and discipline as the private sector undertakings, where the interests of the consumers are involved.

Due to the operational inefficiency of the public sector undertakings, the Government had announced in the Industrial Policy, 1991, that it was thinking of opening up to the private sector many of the industries reserved for the public sector, except the fields on strategic or military considerations.

The Consumer Protection Act No.68 of 1986

The Consumer Protection Act, 1986 is a very important legislation passed by the Government of India, to ensure a proper system is established for the protection of the consumer rights and the redressal of consumer disputes. This act also includes the amendments made vide the Consumer Protection (Amendment) Act, 2002 and was brought into force w.e.f. 15.3.2003.

This Act applies to the whole of India, except the State of Jammu and Kashmir and as otherwise expressly provided by the Central Government by notification, it applies to all goods and services.

The objectives of the act are:

1. To provide for the better protection of the interests of the consumers.

2. To fulfill the above objectives, make provisions for the establishment of Consumer Councils and other authorities for the settlement of consumers' disputes and for matters connected therewith.

Meaning of Complainant and Service

As per the act 'complainant' means a consumer, or any voluntary consumer association registered under the Companies Act 1956, or under any other law for the time being in force or the Central Government or any state government, one or more consumers where there are numerous consumers having the same interest or in case of the death of a consumer, his legal heir or representative who or which makes a complaint.

According to the Act, services of any description made available to potential users can be termed as service. Services can include all "facilities made available for the purpose of banking, finance, insurance, transportation, processing, supply of electrical or other energy, boarding and lodging, entertainment, amusement or the purvey of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

Explanation

As per the act

1. 'commercial purpose' does not include goods bought and used by a consumer for the purpose of earning his livelihood, by means of self employment.

2. 'consumer dispute' means a dispute, where a person against whom a complaint has been made denies or disputes the allegations mentionsed in the complaint.

3. 'defect', refers to any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained or claimed by the trader under any contract or as under any law for the time specified or in any manner whatsoever, in relation to any goods.

4. 'deficiency' refers to any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance as is required to be maintained under any law for the specified time period or is required to be performed by a person in pursuance of a contract or otherwise in relation to any service.

5. 'goods', refers to goods as defined in the Sale of Goods Act, 1930 (3 of 1930).

Consumer Protection Councils

Under the Act, provision is made for the establishment of the Central Consumer Protection Council by the Central Government and a State-level Consumer protection council in each State, by the respective State Governments.

The Central Council will consist of the Chairman, the respective Minister in charge of the consumer affairs at the Central government- level and such number of other official or non-official members/representing such interests as may be prescribed. The Council of members may meet as and when necessary. However, at least one meeting of the council shall be held each year.

The State Council shall consist of the Minister in charge of Consumer Affairs at the state level as its Chairman and such number of official or non official members (not more than ten) representing such interests as prescribed by the state government. Here also the council may meet as and when necessary though not less than two meetings shall be held every year.

The objectives of the Councils both the Central and State Councils are to promote and protect the rights of the consumers. However the State Council's objectives will be restricted to within the concerned State only as per clauses (a) to(f) of section 6 of the act.

More specifically, the objective of both the Councils are to protect the right of the consumers such as:

• The right to be given protection against marketing of goods which are hazardous, dangerous to life and property.

• The right to get correct information on the quality, quantity, potency, purity, standard and price of various goods. That is to protect the consumer from unfair trade practices. 

• The right to be able to make a choice from a variety of products, at competitive prices. 

• The right to be heard and assured that consumers' interests will receive the due consideration at appropriate forums.

• The right to seek redressal against unfair trade practices or unscrupulous exploitation, and

• The right to consumer education.

Process of Consumer Disputes Redressal

Under the Consumer Protection Act, there is a provision for a three-tier consumer disputes redressal system at the District, State and National levels. Thus, the Act provides for the establishment of the following consumer disputes redressal agencies:

• A District-level forum, in each district of every State.

• A State-level Commission in each State, and-

• A National-level Commission.

The National Commission was established by the Central Government in August, 1988, whereas the responsibility for the establishment of the State Commission and District Forum lies with the respective State Governments, after a prior approval is obtained from the Central Government.

The District Forum will include:

• A person who is, had been or is qualified to be a District Judge nominated by the State Government. This person will also be its President.

•  Two other members, one of whom is a women and possesses the following qualifications namely (i) Should not be less than thirty five years of age (ii) possess a bachelor's degree from a recognized university (iii) be persons of ability, integrity and standing and have sufficient knowledge and at least 10 years of experience in dealing with problems related to economics, law, commerce, accountancy, industry, public affairs or administration.

In the case of State Commission will include:

• A person who is or has been a Judge of a High Court and is appointed by the State. This person will also be the President of the Commission.

• Not less than two and not more than such number of members, as may be prescribed and one of whom shall be a woman having the following qualifications i.e. be not less than thirty five years of age, possess a bachelor's degree from a university.

• Members who shall be persons of ability, integrity and standing with adequate knowledge or experience or have shown capacity in dealing with problems relating to Economics, Commerce, Law, Accountancy, Industry, Administration or Public Affairs. (One of the members shall be a woman)

A complaint may be filed with a District Forum or State Commission, related to any goods sold or delivered or any service provided, as the case may be. The complaint may be filed by:

• A consumer to whom such goods are sold or delivered or such service is received; 

• Any recognised consumer association, irrespective of whether the aggrieved consumer is a member of such association or not; or

• One or more consumers where there are numerous consumers with the same interest with the permission of the district forum on behalf of all consumers so interested.

• The State or Central Government.

The National Commission will comprise

• A person who has been a Judge of the Supreme Court and is appointed by the Central Government. This person will also be the President of the Commission.

• Two other members who are persons with ability, integrity and standing and with the adequate knowledge and experience or has shown capacity to deal with problems related to Economics, Commerce, Law, Accountancy, Industry, Pubic affairs or Administration.

The District Forum is empowered to deal with complaints where the value of the goods or services and compensation if any, does not exceed five lakhs of rupees. In case the value exceeds five lakhs, but does not exceed twenty lakhs of rupees, the State-level Commission is empowered to deal with the complaint, whereas complaints where the value is more than twenty lakhs of rupees, are to be dealt by the National Commission.

The State is empowered to deal with appeals against the orders of any District Forum within the State. It can also call for all the records and pass appropriate orders in any consumer dispute which is pending or a decision taken by any District Forum within the State, where it may appear to the State Commission that the concerned District Forum has exercised a jurisdiction not vested in it by law or it has failed to exercise a jurisdiction vested in it by law or may have exercised its jurisdiction in an illegal manner or not made use of proper regular material.

Appeals against the orders of the State Commission can be made to the National Commission. The National Commission is also empowered with similar jurisdiction (as mentioned in the above paragraph) over the State Commissions. It may also be noted that appeals against the orders passed by the National Commission can be made to the Supreme Court.

Regulations

In case any of the consumer disputes redressal agencies feel that any of the allegations filed by the aggrieved person or persons is true, it will issue an order to the effect that, the opposite party may have to do one or more of the following:

• To remove the defect from the goods in question, as pointed out by the laboratory

• To replace the defective goods with new goods (which are free from all defects) of similar description.

• To return to the complainant the charges or price paid by them.

• To pay an amount as the case may be, as a compensation for any loss or injury suffered by the consumer, due to the negligence of the opposite party.

In case of any trader or person against whom a complaint is made, fails or omits to comply with the order passed by the redressal agency, he will be punished with imprisonment for a period not exceeding three years or with a fine not exceeding ten thousand rupees or with both.

Any person, aggrieved by the order of the particular consumer protection council has to appeal to the council at the higher level within a period of thirty days from the data of the order.

Every order of a District-forum, the State Commission or the National commission shall, if no appeal is made against such order under the provisions of this Act, will be final.

MRTP Act 

The Monopolies and Restrictive Trade Practices Act, 1969, aims to prevent concentration of economic power to the common detriment, provide for control of monopolies and probation of monopolistic, restrictive and unfair trade practice and protect consumer interest. As per the act, the practices which can be categorised into monopolistic, Unfair and Restrictive trade are given below:

a. Monopolistic Trade Practice

Monopolistic trade practice is that which represents abuse of market power in the production and marketing of goods and services by eliminating potential competitors from market and taking advantage of the control over the market by charging unreasonably high prices, preventing or reducing competition, limiting technical development, deteriorating product quality or by adopting unfair or deceptive trade practices. 

b. Unfair Trade Practice

• Misleading advertisement and False Representation

• Falsely representing that goods and services are of a particular standard, quality, grade, composition or style

• Falsely representing any second hand renovated or old goods as new

• Representing that goods or services, seller or supplier have a sponsorship, approval or affiliation which they do not have

• Making a false or misleading representation concerning need for or usefulness of goods or services

• Giving to public any warranty, guarantee of performance that is not based on an adequate test or making to public a representation which purports to be such a guarantee or warranty 

• False and misleading claims with respect to the price of goods or services

• Giving false or misleading facts disparaging the goods, services or trade of another person or concern.

c. Restrictive Trade Practice

To maximise profits and market power, traders often attempt to indulge in certain trade practices which tend to obstruct the flow of capital into the stream of production. It may also bring manipulation of prices or conditions of delivery or affect the flow of supplies in the market so as to impose unjustified costs.

Procedure

All consumer Complaints regarding monopolistic trade practice, unfair trade practice and restrictive trade practice can be made to the MRTP commission. All the complaints will have to be addressed to the 'Director General' (Investigation and Registration), MRTP Commission. The following procedure is followed by the MRTPC on complaint.

• Inquiry may be initiated through a complaint by an individual or registered consumer organisation.

• Fact finding investigation is carried on by the Director General. 

• If no prima facie case is made, the complaint is dismissed, else an order is passed to that effect.

• The commission may restrain the party concentrated from carrying on the impugned trade practices by granting temporary injunction.

• Final order is passed. Compensation may be granted to the complainant.

ICRPC

International Consumer Rights Protection Council (ICRPC)

ICRPC is a registered non profit, non political, Non Government Organisation (NGO) which works for the benefit and welfare of consumers who have grievances. The aims of the International Consumer Rights Protection Council, based at Thane (Mumbai) are:

• To work for a corruption free society.

• To educate the public on consumer issues and bring consumer awareness among masses

• To help consumers fight against the powerful and corrupt officials and organisation

• To guide and counsel consumers for filling their consumer complaints with the consumer count

• To provide with the latest information on consumer laws through the website (www.icrpc.org)

• To take action against corrupt government officials and report the same to the concerned authorities

• The enlighten and encourage the citizens of India to become aware of their rights as a consumer

• To unite the public by offering them a platform to voice their grievances against defaulting companies and corrupt officials.

• Facilitate redressal of consumer grievance through out of court settlement and thereby reduce the load on the consumer courts.

Given below are examples of a few consumer complaints which were resolved due to ICRPC's intervention:

a. Godrej Refrigerator Replacement of Defective Unit

Mrs. C. Almeida of Thane (West) received a new Godrej refrigerator from the company within a month through ICRPC's action. She had approached them after she got fed up when nothing happened even after following-up the matter with the company for three years.

b. APTEC Computer Institute: Refund of Fee

Full course fee refunded to Parminder from APTECH against consumer complaint for their low grade educational services. The case was filed at Sonipath (Haryana) but was withdrawn due to out of court settlement through ICRPC's notice.

c. Chemist, Shop: Refund against Defective Item

Miss Delia Antao of Nirmala Niketan received full refund against ICRPC's notice for a defective item sold by New Bombay Chemists, Mumbai. The item did not have manufacturer's name and address printed on the packing.

d. LPG - Hindustan Petroleum: Connection Sold Fraudulently

LPG gas consumer receives a new gas connection from the Chairman, Hindustan Petroleum Ltd., Mumbai as a result of action taken against the dealer of HP who mischievously sold the complainant's consumer number to someone else.

Summary

Consumerism is an organised movement of citizens and government to enhance the rights and powers of buyers in relation to sellers.

Since the 1980's even though changes have been occurring in the socio-economic environment like the rise in consumers earnings, growth of the media with a growing consciousness to adopt lifestyles more in line to global lifestyles, growing aspirations, etc. marketers in their quest to beat competition are also adopting unethical marketing practices. All these has led to the rise of consumerism in India.

To protect consumers against unethical marketing practices, the industry have put certain self-regulatory codes of conduct for the particular profession (for example, the Advertising Standards Council of India (ASCI). The Government has also brought in certain regulations like-Central Packaged Commodities (Regulation) Order, 1975, the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, Industries Development and Regulation Act, 1951, The Consumer Protection Act, 1986 etc.