Special issue with the Sunday Magazine
CONSUMER : October 31, 1999
A new era in consumerism
The author is Secretary, Department of Consumer Affairs, Government of India, New Delhi.
"Consumerism" is likely to dominate the Indian market in the next Millennium, thanks to the economic reforms ushered in and the several agreements signed under the World Trade Organisation. The transition will be from a predominantly "sellers market" to a "buyers market" where the choice exercised by the consumer will be influenced by the level of consumer awareness achieved. By "consumerism" we mean the process of realising the rights of the consumer as envisaged in the Consumer Protection Act (1986) and ensuring right standards for the goods and services for which one makes a payment. This objective can be achieved in a reasonable time frame only when all concerned act together and play their role. The players are the consumers represented by different voluntary non-government consumer organisations, the government, the regulatory authorities for goods and services in a competitive economy, the consumer courts, organisations representing trade, industry and service providers, the law-makers and those in charge of implementation of the laws and rules.
Consumer Protection Act
The issues relating to consumer welfare affects the entire 986 million people since everyone is a consumer in one way or the other. Ensuring consumer welfare is the responsibility of the government. Accepting this, policies have been framed and the Consumer Protection Act, 1986, was introduced. A separate Department of Consumer Affairs was also created in the Central and State Governments to exclusively focus on ensuring the rights of consumers as enshrined in the Act. This Act has been regarded as the most progressive, comprehensive and unique piece of legislation. In the last international conference on consumer protection held in Malaysia in 1997, the Indian Consumer Protection Act was described as one "which has set in motion a revolution in the fields of consumer rights, the parallel of which has not been seen anywhere else in the world."
The special feature of this Act is to provide speedy and inexpensive redressal to the grievance of the consumer and provide him relief of a specific nature and award compensation wherever appropriate. The aim of the Act is also to ensure the rights of the consumer, viz. the right of choice, safety, information, redressal, public hearing and consumer education.
The Act defines the consumer as one who purchases goods and services for his/her use. The user of such goods and service with the permission of the buyer is also a consumer. However, a person is not a consumer if he purchases goods and services for resale purpose.
The most important feature of the Act is the provision for setting up a three-tier quasi-judicial machinery popularly known as "consumer courts" at national, state and district levels. The apex court, National Commission functions in Delhi. Every State Government has a State Commission. The third tier is in each district and is called district forum. As on January 1999, there are 543 district fora. All these courts have handled nearly 13 lakh cases of which about 10 lakhs cases have been disposed of. The disposal of 77 per cent of the cases is not a mean achievement. However, it should be noted that only 27 per cent of the total cases have been disposed of within the prescribed period of 90 days or 150 days (where testing is required). This fact really causes concern for the Government and the consumers in general. The National Commission has identified the reasons for the slow disposal and have come out with suggestions for amending the Act with a view to improving the disposal rate within the time limit prescribed in the Act. The Government has been contemplating a number of amendments to the Act and these amendments will be brought out in the next session of Parliament.
The consumer movement in India is as old as trade and commerce. In Kautilya's Arthashastra, there are references to the concept of consumer protection against exploitation by the trade and industry, short weighment and measures, adulteration and punishment for these offences. However, there was no organised and systematic movement actually safeguarding the interests of the consumers. Prior to independence, the main laws under which the consumer interests were considered were the Indian Penal Code, Agricultural Production, Grading and Marketing Act, 1937, Drugs and Cosmetics Act, 1940. Even though different parts of India exhibited different levels of awareness, in general, the level of awareness was pretty low.
An average Indian consumer is noted for his patience and tolerance. Perhaps because of these two traditional traits and due to the influence of the Mahabharata, the Ramayana and the Bhagavad Gita, he considers the receipt of defective goods and services as an act of fate or unfavourable planetary position in his horoscope. When a new television or refrigerator purchased by him turns out to be defective from day one, he takes it reticently, blaming it on his fate or as the consequence of the wrongs committed by him in his previous birth. Very often he is exploited, put to avoidable inconveniences and suffers financial loss. It is rather paradoxical that the customer is advertised as the "king" by the seller and service provider; but in actual practice treated as a slave or servant. Goods are purchased by him along with the label "Items once sold by us will never be received back under any circumstances whatsoever."
This unethical, illegal and unilateral declaration has to be viewed in the light of the practice in developed countries where the seller declares, "In case you are not fully satisfied with our product, you can bring the same to us within a month for either replacement or return of your money." This will clearly indicate the level of consumer consciousness. However, things are changing - slowly but steadily - and the momentum has increased considerably since the establishment of consumer courts and due to the efforts of a number of consumer organisations and the media. The next millennium will witness a high degree of consumer awareness and the concepts of "comparative costs", "consumer preference/ resistance/ abstinence" and "consumer choice" will become vital aspects of the economy.
An analysis of the data from the consumer courts in different States shows that there is a direct relationship between literacy and consumer awareness. Statistics relating to Kerala and Bihar will justify this. The question to be considered is what can the Government do to improve the position?
The Government wears three hats to deal with cases of three different categories. The first one is dealing with the ministries and departments of government. Recently, the Standing Committee of Parliament on Health said Government hospitals should be brought under the purview of the Consumer Court. To this, we had pointed out the latest ruling of the Supreme Court which lays down that the Consumer Protection Act will apply only when the consumer pays for the goods and services and on this count the government hospital, where the services are not charged on the consumer, will not come under the Act. For such cases the government has developed the concept of "Citizen's Charter". All government departments dealing with the public are to publish a "Citizen's Charter" clearly indicating the services offered and the procedure to be followed. All the information has to be made available in a single window. This programme is in its incipient stage and has a long way to go to achieve the desired levels of consumer satisfaction. The general reaction of the consumer to this is: what happens if what is stated in the Citizen Charter is not adhered to? Unless and until this is clarified, the responsibility fixed and those held accountable are dealt with, the purpose will not be achieved.
The second area is where the services/ utilities are provided and charged either by the government department or the agencies under its control. At present, a number of regulatory authorities have been constituted and the country is entering a new regime of "regulatory economies" in the services sector. It is heartening to note that the regulatory bodies like the Telecom Regulatory Authority of India (TRAI) have given importance to the interests of consumers and this has been publicly declared as one of the main objectives. In the field of telecom, power, transport and water supply, the consumers today are going through a number of problems not knowing how to get their grievances redressed. The number of cases relating to these sectors are increasing in the consumer courts. It must be possible for the government to take steps to see that the areas of grievances are identified and remedial steps taken through proper systematisation of procedure and working style.
There are a number of areas where the procedure has to be made simple and consumer-friendly. For example, when it was felt that the quality of bottled water purchased by the consumer has to be ensured by fixing standards, it came out that even though it is necessary and desirable, under the existing laws it cannot be done. The Ministry of Law pointed out and rightly so, that water is not "food" as per the provisions in the Food Adulteration Act. The process of getting statutory notification in the interest of the consumer in this case, where all concerned are agreeable, is likely to take 12 to 18 months. In such a situation the only answer is to prevail upon the manufacturers to go for voluntary ISI (Indian Standards Institution) certification. This method is working in the case of bottled water, thanks to the cooperation of producers and the clear preference expressed by the active consumer groups.
Similarly in the area of "investor protection" in spite of several steps taken by the regulatory authorities such as the Reserve Bank of India and the Securities and Exchange Board of India, the case of exploitation of consumers is increasing. This is an area of grave concern and requires concerted action by the regulators, government and the consumer organisations. We must find a way out to save the consumers from the unscrupulous functioning of Non-banking finance companies.
The third category is the protection of consumers from the private sector dealing with goods and services. It is not to be construed that the entire business sector is keen on exploiting the consumers. These are established business firms which really care for consumer satisfaction, their own reputation and goodwill. Voluntary bodies like the Fair Business Practices Forum are functioning effectively and are quick in removing the grievances of the consumers. These can go a long way in reducing the number of cases in the consumer courts.
If the Government is to take a pro-active role in increasing consumer awareness, encourage consumer education, training and research and administer the infrastructural need of the consumer courts - then it should have enough funds. It is not easy to get adequate budget allocations for obvious reasons. The best way appears to be to work out methods by which the Central Consumer Welfare Fund is augmented and a similar fund is set up at State level also. It is gratifying to note that action has been initiated in this direction and there is every reason to hope that the future will be better.
The consumer has to be aware of his rights and play a key role. The success of "consumerism" is a strong function of consumer awareness and the assistance the movement gets from the government. The consumer movement got a boost and moral support from the late U.S. President John F. Kennedy in the historic declaration in Congress on March 15, 1962, declaring four basic consumer rights (choice, information, safety and the right to be heard). Subsequently, March 15 every year is celebrated as World Consumer Rights Day. However this annual ritual observation does not appear to have produced the desired results. A sub-continent like India with regional imbalances and diversity of languages, requires not one but several Ralph Nadars. A recent survey has revealed that a number of consumers in the urban as well as rural areas are not very much aware of the consumer movement and the rights of the consumers. It is in this context that it is considered relevant to quote the objectives adopted by the General Assembly of United Nations in 1985.
The U.N. guidelines for consumer protection are meant to achieve the following objectives:
(a) To assist countries in achieving or maintaining adequate protection for their population as consumers;
(b) To facilitate production and distribution patterns responsive to the needs and desires of consumers;
(c) To encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services to consumers;
(d) To assist countries in curbing abusive business practices by all enterprises at the national and international levels which adversely affect consumers;
(e) To facilitate the development of independent consumer groups;
(f) To further international cooperation in the field of consumer protection;
(g) To encourage the development of market conditions which provide consumers with greater choice at lower prices.
It is interesting to note that in spite of U.N. recognition, encouragement from the developed countries and the pro-active role played by the Government, the consumer in India still does not get his due. It is time that he wakes up and realises his rights. Even the great Hanuman required someone older and wiser to remind him of his potential strength. It will be useful if voluntary consumer organisations take up this role and make way for the realisation of the objectives of the U.N. guidelines and the Consumer Protection Act.
In the next millennium, every consumer in his own interest has to realise his role and importance in the right perspective. Each citizen in a democracy derives his power at the time of elections and exercises it through the ballot. In a competitive economic environment the consumer has to exercise his choice either in favour of or against the goods and services. His choice is going to be vital and final. He should realise his importance and prepare himself to exercise his rights with responsibility. It is very often stated "Customer is sovereign and consumer is the King." If that is really so, why do we have the Consumer Protection Act? Why is there a need for protecting the King? Should it not be rightly called "Consumer Sovereignty Act"? It is for the consumers to decide. After all the dictum in democracy is, the citizens get a government they deserve. Similarly the consumers in society get a position in the market depending upon what they do or do not do. It is agreed on all hands that "consumer empowerment" in India has a long way to go. This is the right time to act. Let us prepare for the next millennium and usher in a new era of "Consumerism". When we cross the winter, spring cannot be far behind.
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