“Consumerism/consumer movement is an organized movement of citizens and Government to impose the rights and powers of buyers in relation to sellers.” – ‘Philip Kotler & G. Armstrong’.
Consumerism merits the attention of one and all because it affects all of us as consumers. Consumerism arises from widely shared feelings of consumers that they are ill-served by their economy.
In its most vigorous form, it produces outrage, sometimes stemming from the abuse of powers by the sellers, a situation that holds in many developing countries in a more visible form.
Consumerism is now established and well organised force in the market place so that consumer complaints and grievances will be heard and redressed.
Indifference of business towards ever going consumer movement will amount to an open invitation or a blank cheque in favour of government interference in the free market mechanisms. In other words, consumerism is a direct challenge to a business to be met with squarely, if business wants freedom or survival in our economy.
1. Introduction 2. Rising Consumerism in India 3. What are Consumer Organizations 4. Consumer Organizations and Attitude of Government 5. Guidelines for Consumer Organizations 6. Present Status of Indian Consumerism.
Consumerism in India: Introduction, Consumer Organizations, Guidelines and Few Others
Consumerism in India – Introduction
Each one of us is a ‘consumer’, right from the day the child comes in the womb till the day one goes to the grave. The child in the womb consumes through his mother. The question of the protection of the rights of the common consumer, if viewed in the above background gains utmost significance.
The industrial revolution and the development in the international trade and commerce has led to the vast expansion of business and trade, as a result of which a variety of consumer goods have appeared in the market to cater to the needs of the consumers and a host of services have been made available to the consumers like insurance, transport, electricity, housing, entertainment, finance, banking etc.
A well-organized sector of manufacturers and traders with better knowledge of markets has come into existence, thereby affecting the relationship between the traders and the consumers making the principle of consumer sovereignty almost in inapplicable. The advertisements of goods and services in television, newspapers and magazines influence the demand for the same by the consumers though there may be manufacturing defects or imperfections or short comings in the quality, quantity and the purity of the goods or there may be deficiency in the services rendered.
In addition, the production of the same item by many firms has led the consumers, who have little time to make a selection, to think before they can purchase the best. For the welfare of the public, the glut of adulterated and sub-standard articles in the market has to be checked.
In spite of various provisions providing protection to the consumer and providing for stringent action against the adulterated and sub-standard articles in the different enactments like Code of Civil Procedure, 1908 the Indian Contract Act, 1872, the Sale of Goods Act, 1930, the Indian Penal Code, 1860, the Standards of Weights and Measures Act, 1976 and the Motor Vehicles Act, 1988, very little could be achieved in the field of Consumer Protection.
Though the Monopolies and Restrictive Trade Practices Act, 1969 and the Prevention of Food Adulteration Act, 1954 have provided some relief to the consumers yet it became necessary to protect the consumers from the exploitation and to save them from adulterated and sub-standard goods and services and to safe guard their interest.
The movement of Consumerism is a fascinating one, and it is indispensable in our daily activities of life In the opinion of Humble Supreme Court, the Consumer Protection Act, 1986, has been a milestone in the Indian History of socio-economic protection to consumers and buyers that is basically directed towards achieving public benefits.
The law is an attempt to meet long felt need of protecting the consumer (common man) from disputes for which remedy under the then existing law was not sufficient. The marketing rule no longer is Caveat Emptor, it is Caveat Venditor. And the Consumer Protection Act 1986 has emerged as a much useful and consumer friendly Act after the amendments of 1993.
One cannot divide the society into sections of consumers and traders, in a way in which the tenant or labour can be segmented against landlords or employees. Each member of a society is a consumer in itself in one way or another. Can you imagine any person in the society who is not a consumer? Perhaps your answer will probably be a big no. Therefore, without any hesitation we can say that the Act is totally a social measure and not class legislation.
The journey of the consumer legislation in India is hardly four decades old, but the output in terms of redressal decisions delivered by the authorities appointed under the Act has far exceeded all expectations. This in itself is a sufficient proof, how greatly a common man was in need of quick and affordable justice.
A high volume of consumer complaints has established a stream of consumer Justice. The consumer law had given a desired result. Many high perched authorities have been pulled out of their glass houses and ivory towers. They have been brought down to face the ground realities of life and be answerable for them.
In the matter of consumer protection a major step was taken by the United Nations when after good amount of consultations with Governments and International Organizations, the Secretary General of United Nations submitted draft guidelines for consumer protection to the Economic and Social Counsel (UNESCO) in 1983.
After extensive discussions and negotiations among the Governments on the scope and content of the guidelines, the General Assembly of the United Nations adopted the guidelines for consumer protection by consensus on 9th April, 1985. In pursuance of the above Resolution of the United Nations, in the following year, i.e. in 1986, our Parliament has enacted the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’).
The Statement of Objects and Reasons, appended to the Bill, which ultimately became the Act, stated that the Bill was intended to provide for the better protection of the interest of consumers and for that purpose to make provision for the establishment of Consumer Councils and other authorities for the settlement of consumer disputes and other matters connected thereto.
Para 4 of the Statement of Objects and Reasons, appended to the Bill, reads as under-
“To provide speedy and simple redressal to consumer disputes, a quasi-judicial machinery is sought to be set up at the District, State and Central levels. These quasi-judicial bodies will observe the principles of natural justice and have been empowered to give reliefs of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided.”
The Preamble to the Act, as finally passed by the Parliament, is practically on the same lines and the same reads as under, “An Act to provide for better protection of the interests of consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ disputes and for matters connected therewith.”
The Act helps the fate of the consumer in two important aspects. It provides, in the first place, a cheap, expeditious, quick and swift remedy. It is a measure of swift justice. It brings justice to the door step of the common man. Machinery of justice is there in every district known as the District Consumer Forum. The matters of jurisdiction have been modified so as to enable the consumer to proceed in his own district where he suffers as a consumer.
Secondly an enough improvement has been effected in the system of consumer remedies which was in work before the Act. It is no longer necessary that the consumer should be confined in his remedies only to his immediate dealer. Now he can sue in his own home town even the distant manufacturer with whom he had no direct contract relationship.
The responsibility and liability of the manufacturer-cum-dealer combine for giving a healthy product to the surety cannot be excluded or limited in reference to the consumer. The same pattern of responsibility is applicable to dispensers of consumer services. The Act covers all kinds of services.
It also covers all kinds of consumer dealings whether for cash or in kind. It protects the consumer from the burden of restrictive and unfair trade practices. It enables the Consumer Forums and Commissions to award compensation for not only the amount lost in purchasing defective material or in hiring deficient services but also for mental pain and suffering and harassment caused by defective goods or services.
The Act, if properly implemented, is likely and is also capable of instilling in the business community a sense of discipline and responsibility. It should be able to create a new business motto, “Give a fair deal to the consumer” and “Consumer is King”.
Consumerism is regarded as a movement by consumers and consumer organizations intended to ensure fair and ethical practices by producers and marketing intermediaries for the whole body of consumers. The success of a consumer movement depends not only on the ability of consumer organizations to curb the unfair trade practices and prevent the sellers from exploiting the buyers’ ignorance but also on the behaviour of the consumers themselves. It calls for a high degree of awareness on the part of the consumers about their various rights including product quality, information and safety.
In the good olden days the principle of ‘Caveat Emptor’, which meant buyer beware governed the relationship between seller and the buyer. In the era of open markets buyer and seller come face to face, seller exhibited his goods, and buyer thoroughly examined them and then purchased them. It was assumed that he would use all care and skill while entering into transaction.
The maxim relieved the seller of the obligation to make disclosure about the quality of the product. In addition, the personal relation between the buyer and the seller was one of the major factors in their relations. But with the growth of trade and its globalization the rule no more holds true. It is now impossible for the buyer to examine the goods beforehand and most of the transactions are concluded by correspondence.
Further on account of complex structure of the modern goods, it is only the producer / seller who can assure the quality of goods. With manufacturing activity becoming more organized, the producers / sellers are becoming stronger and organized whereas the buyers are still weak and unorganized. In the age of revolutionized information technology and with the emergence of e-commerce related innovations the consumers are further deprived to a great extent.
As a result buyer is being misled, duped and deceived day in and day out. Mahatma Gandhi, the father of nation, attached great importance to what he described as the “poor consumer”, who according to him should be the principal beneficiary of the consumer movement.
He said “A Consumer is the most important visitor on our premises. He is not dependent on us we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving an opportunity to serve him.”
Inspite of these views consumerism is still in its infancy in our country, thanks to the sellers’ market and the government monopoly in most services. Consumer awareness is low due to the apathy and lack of education among the masses. No one has told them about their rights – to be informed about product quality, price, protection against unsafe products, access to variety of goods at competitive prices, consumer education etc.
What consumerism lacks here are education and information resources, testing facilities, competent leadership, price control mechanism, and adequate quasi-judicial machinery. The providers of goods and services have been reluctant to give due consideration to consumer interest protection.
Consumerism in India – Rising Consumerism in India
It is an accepted fact that this Globalization has brought about a tremendous change in consumption pattern at all levels across countries and the overall purchasing power of consumers has increased. Prior to the enactment of different consumer protection acts, laws and growth of consumer activists and organizations in India., the doctrine of “Caveat Emptor” (buyer beware) was prevailing. But now the time has come for the doctrine “Caveat Venditor” (seller beware) to rule.
Consumerism merits the attention of one and all because it affects all of us as consumers. All of us enjoy shopping. Whether we like it or not, spend a lot of time as consumers of goods and services. When we buy goods, eat in a restaurant, travel or seek the help of doctors, engineers or repairmen, we act as consumers.
Very often we do not get what we seek. Therefore, the so called Consumerism arises from widely shared feelings of consumers that they are ill-served by their economy. In its most vigorous form, it produces outrage, sometimes stemming from the abuse of powers by the sellers, a situation that holds in many developing countries in a more visible form.
Often this discontent arises from the market failure, unsafe products, dishonored promises, misrepresentation, deceptive advertising, frauds and failures of communication between buyer and seller. Most of the consumer problems originate in the inability or unwillingness of producers to satisfy consumer needs and interests.
Some consumer problems are self-inflicted. Consumer needs and interests are extremely varied, differing among cultures, and also within cultures, from one individual group to another.
In fact, the word consumerism implies a certain activist behaviour or attitude which is appropriate in recent times because consumers are paying more attention to their decision making in the market place. Therefore, we may say that this term consumerism connotes awareness among the people to raise their voice and demand a safe and better living. However, consumerism acts as a movement of consumers, which makes them well aware of their rights and responsibilities and fight against odds.
The new waved Globalization is creating new inequalities and challenges in every nook and corner of the world. Therefore, consumers’ world over need to organize themselves to secure proper justice and to fight for their rights. The loud alarms, Consumer unite! Should be heard by consumers’ world over, otherwise, everywhere, throughout the world, across the countries, consumers are taken for a ride mercilessly.
First, consumer luxuries have got democratised during this decade. Products that were considered for a few started to reach larger and larger masses of consumers – from colas to shampoos to ready wear to mobile to airlines. Categories that started in the 90s began to expand their footprint and became a part of mass life.
Consumption and consumerism reached more people than it did in the 90s. Social inequity continues to be part of India’s economic, but the capitalistic principle that “open up from the top to a few, and the benefits will flow down to many” has come true. Consumerism is truly mass!
Along with this, has come a culture of upgrade and step movement rather than lifetime ownership and gradual movement. Technology, mobile handsets in particular, made consumers get used to constant change – buying a new product even when the old one was “functional”, thus breaking the barrier of the “replace when it’s broke” mindset.
And then this extended to other categories in life – from clothes to televisions to homes. Every Indian market presents an opportunity to marketers to get consumers to move up. As technology improves and consumers’ disposable income increases, the willingness and propensity of consumers to make leaps from unbranded to branded and pay significant premium is also increasing. There is no longer “lifetime ownership”, but ‘lifetime consumer value’!
Third, there has been a shift from product to services and experiences. And this is taking place across categories. Coffee has become Cafes, beauty products are transiting into Parlours – and this is going into small towns too with local “aunties” sensing business opportunities opening parlours and beauty counseling centres at home – and home videos have become multiplexes. And in every case, it provides marketers an opportunity to extract more value.
Consumerism in India – What are Consumer Organizations
Consumers unite! Fight for your rights! Put an end to adulteration! Say “No’ to deceptive advertising! Grow as green consumers! Achieve sustainable consumption! are some of the slogans that all of us as consumers should learn to speak, spread and achieve. Indeed, it is a matter of great urgency that the consumers world over should be organized to face this changing and challenging Globalized world.
Consumer organizations are those organizations which are formed and framed by consumers to fight for their rights, to create awareness among fellow consumers about their responsibilities, to enhance consumer welfare through proper co-ordination with the governments and institutions.
They might be working under different names such as Residents Welfare Associations, Associations for Consumer Guidance, Consumers Welfare Agency, Residents Union, Civic societies and Non-governmental organizations. Such organizations are found throughout the world in almost all countries.
But in some countries they are more united and aggressive and effective in safeguarding the interests of the consumer. The consumer organizations anywhere in the world should work with one point formula Consumer Safety and Welfare through an active participation of consumer.
Like the utterance of great scientific socialist Karl Marx’s Workers Unite World Over, consumers should be made to unite world over. This great task can be made possible only through the effective consumer organizations.
When a consumer organization is formed, its first job is:
1. To provide consumer education which includes their rights and responsibilities.
2. To share and exchange consumer related information.
3. To promote co-operation and collaboration of all activities related to consumer protection and interests.
4. To conduct research and product testing.
5. To ensure the basic needs such as food, housing, health care and clean environment to every consumer.
6. To develop the spirit and confidence among the consumers to represent their grievances.
7. To educate consumers to think critically to make their own decisions and to gain strength to resist hazardous trends and practices.
8. To work with communities to help them to solve their problems.
9. To provide counseling and guidance in case of grievances. To organize programmes of public interest.
10. Any consumer organization with above said features will be an effective and successful organization. The developing world has been in quest of such effective consumer organizations which will be very pragmatic and beneficial to all sections of the society.
Consumerism in India – Consumer Organizations and Attitude of Government
Enactment of law itself is not enough to safeguard the rights of consumers unless it is followed up by the creation of awareness of such legislation and sustained efforts for its effective enforcement. It is in these areas that the role of consumer organizations assumes greater significance.
Awareness is essential for consumers and it is equally important for the shopkeepers, traders and manufacturers of consumer items. To be made aware of the rights of consumers, relevant regulations and powers of intervention granted to consumers and consumer organizations. The mission of consumer organizations in India is the promotion and protection of rights and interests of consumers. They are actively engaged with related issues at the local and national levels.
1. Violations under the Food Adulteration Act
2. Deficiencies in public distribution system
3. Environmental pollution
4. Awareness programme in educational institutions
5. Consumer awareness and publicity campaigns
6. Publication of books and literature on consumer activism
7. Free advice regarding redressal of consumer complaints
8. National workshop on women empowerment
9. National workshop on fertilizers and pesticides
10. Convention of WTO negotiations and consumer
11. Symposium on globalization and consumer in India
12. Street plays and dramas on deceptive ads, short weights, adulteration, price cheating and a number of such day to day consumer problems.
Consumer organizations represent consumer problems through the following government and nongovernment bodies:
1. Central Consumer Protection Council
2. State Consumer Protection Council
3. National Consumer Disputes Redressal Commission
4. Consumer District Forum
5. Patent Officer
6. Bureau of Indian Standards
7. Federation of Indian Chamber of Commerce and Industry
8. Confederation of Indian Industries
9. Confederation of Indian Consumer Organizations
In India, consumer organizations no doubt have registered an impressive growth. In quantitative terms, the growth seems to be quite encouraging. But the way they are functioning is quite disappointing. Most of these organizations suffer from lack of funds, potential volunteers, continued support of the members, leadership with vision etc.
Once the objectives are framed, the consumer organizations have to enroll members which will not only help the organization to expand but also to strengthen financially. A large membership will add to the collective strength for effective working. It is important that a nominal fee has to be charged as membership fee at the time of enrollment and also periodically, as monthly or annually.
If an expanding organization requires more money for its activities, it can take up some research projects and get them sponsored by the Consumer Affairs Departments of the state or central government. Organizations can run a laboratory through which it gets income by testing the suspected products brought by the consumers. Other sources can be from publications and fund risen from the public.
The most important requirement for an organization is the manpower. Therefore, it requires a good number of active volunteers to carry out its activities. Any organization with good intention would attract more people to join the organization.
Since the consumer movement is basically a demand for justice movement, every consumer has a right to protest such as:
(i) Written protest
(ii) Protest march
(iii) Fasting in protest
Street plays and dramas. If it is made through consumer organizations, it will be more effective.
It was with the passage of pro-consumer legislation and the setting up of relevant agencies and councils, even at the highest levels in the government that consumers could rest assured that, for the most part, the products that reach them have been produced and distributed under conditions which take account of the health and safety of consumers and the old law of the jungle, let the Buyer Beware has been partially replaced.
In India, unlike the developed countries, problems are not merely of the quality of goods and services produced but even greater problem is that of the availability of these goods to the masses. Thus rationing of essential commodities is a daily occurrence, not restricted to wartime scarcities and shortages.
Indeed, quite a lot of initiatives have been taken by the government enacting a number of laws to protect the consumer. The prevention of Food Adulteration Act of 1954 and the Essential Commodities Act of 1955 were the early enactments that independent India gave to its consumers.
In 1956, it also started a national agency called the Indian Association of Consumers with the financial backing of the planning commission and the involvement of many eminent personalities like Mr. G.L. Nanada, Mr. Shegal and Mrs. Susheela Nayar.
The Government of India has been playing a very vital role in protecting consumers and encouraging consumer organizations. The louder voice of some dissatisfied consumers made the government at last to implement a separate comprehensive piece of legislation protecting the consumer, and in 1986 the Consumer Protection Act was passed.
In 1986 the Government of India amended a number of laws to empower the consumer and registered consumer organizations to file complaint in the court. Among them, the Drugs and Cosmetics Act 1940, the Agricultural Produce, Grading and Marketing Act 1937, the Prevention of Food Adulteration Act 1954 the Essential Commodities Act 1955, the Monopolies and Restrictive Trade Practices Act 1969 and Standards of Weights and Measures Act 1976.
In 1991, the parliament amended the central excise and customs laws to provide for the establishment of Consumer Welfare Fund for making available grants for reimbursing legal expenses incurred by a complainant or class of complaints in a consumer dispute after its final adjudication and for making any other purpose recommended by the central consumer protection council.
The Ministry of Consumers Affairs and Public Distribution has started awarding First, Second and Third cash prizes to the tune of Rs.50,000, Rs.25,000 and Rs.10,000 respectively to the best performing consumer organizations in India. Thus the Government of India has been encouraging consumerism and consumer organizations in the country.
The various measures taken by the Government has aroused a lot of expectation among the consumers. In the last few years, a major thrust has been given to the consumer protection programme and a number of additional steps have been taken to protect the interests of the consumers.
The Department of Consumer Affairs along with the Department of Administrative Reforms and Public Grievances has brought out 62 citizens charters in ministries having public contacts. The department regularly monitors retail prices, wholesale prices of essential commodities as part of its monitory activity to safeguard the interests of the consumers.
Indeed, the laudable effort of the Government of India is the great enactment of Consumer Protection Act of 1986 which provided for the establishment of central consumer protection council, the state consumer protection councils and the district consumer protection councils. Over all, the attitude of Indian Government towards consumerism and consumer organizations is encouraging.
Though India has an ancient history of consumer protection, consumer movement had its beginning only in the early part of this century. But they were mainly highlighted as freedom movement agitations. For e.g. The Swadeshi Movement 1905 to 1911- boycott of foreign goods with the slogan “Be Indian Buy Indian” and Dandi March, March 12, 1930 to May 18, 1930-protest march on the imposition of tax on the manufacturer of salt.
These two agitations were lead by Mahatma Gandhi, the father of India. In the later part of this century that is after gaining independence in the year 1947 consumer organizations slowly started emerging.
Consumerism in India – Guidelines for Consumer Organizations to Face the Globalized World
Due to Globalization and fast advancement in technology, new economic issues are emerging making the market place more complex. In such a market place consumer is get confused and mislead in decision making.
This problem of consumer, inevitably, has to be tackled by the consumer organizations. Hence, the consumer organizations world over should develop an effective Think Tank to plan a taskforce to face the challenges ahead.
The probable guidelines that could be followed by the consumer organizations of India and Japan to face the challenges of globalized world are:
1. The United Nations Guidelines on the Protection of Consumers, endorsed at the United Nations General Assembly in 1999, added the principle of promoting sustainable consumption. It says, “All members and organizations of the entire society share responsibilities for sustainable consumption.”
2. Consumers can play a necessary role in promoting consumption based on a sustainable environment, economy and society. Consumer organizations are responsible for promoting public participation in sustainable consumption and should work together with the Government and the industrial and business communities to promote the same.
3. Consumer organizations throughout the world should affiliate with Consumers International based in Malaysia to tackle international consumer issues. Consumers should be made known all about Consumers Interpol which was launched by Consumers International in the year 1981 as an international consumer policy network.
4. Consumers International aim is to be fast, comprehensive and truly international, corresponds from a number of countries who have joined this network to inform the Consumer Interpol of a suspected hazardous products withdrawal in their home market as well as international.
5. The spirit of consumer education that is to be followed by consumer organizations and the concerned authorities are given below by Consumers International as a charter for consumer action.
6. Critical awareness with consumers learning, how to distinguish needs from wants, how to ask informed question about price, availability, quality of goods and services.
7. Action and involvement with consumers being able to act on their own behalf backed by the confidence of knowledge and learning how to get a fair deal.
8. Social responsibility, consumers acting with concern and sensibility, aware of the impact of their actions on other citizens, particularly on disadvantaged groups.
9. Ecological responsibility with consumers thinking about the effects of their decisions on the physical environment, aware of the possible conflict between their desire to own things and the spoiling of our environment.
10. Solidarity with consumers realizing that their most effective action is through the information of citizen groups. Together such groups can acquire the strength and influence to make sure that adequate attention is given to consumer interests.
a. Consumer organizations should insist the concerned governments to introduce compulsory consumer education as a part of education system. It helps younger generation with requisite skills in today’s complex market place. The basics of consumerism should be taught at school level itself. Certificates, Diploma and Degree courses must be offered in consumer affairs with an assurance of employment,
b. Pen is mightier than sword. No organization is complete without publications. A regular newsletters and magazines should be brought out periodically as the media communication between the consumer activists and consumers. Besides this, TV interviews of consumer activists and their programs, plan of action to solve consumer problems should be broadcasted.
c. Consumer organizations should join their hands to establish World Institute of Consumers (WIC) exclusively to carry out research in all kinds of consumer problems world over.
d. Consumer organizations should insist industrialists to set up a council for fair business practices which in turn will avoid mal-practices of traders. These councils should lay down a code of ethics for the traders.
e. Obviously, producer is also a consumer. Hence, organization should enroll more and more manufacturers, traders and business community considering them as consumers which would make the organization more effective. However, such members should not violate the aims and objectives of organization.
f. The list of dos and don’ts of the organization should be updated according to the changes of the economy.
g. Organizations should take initiative to organize Industry Trade Consumer Interface for a dialogue between consumer bodies and traders organizations. If it provides workable results, it is indeed a thing of beauty and joy for consumers.
h. Organizations should lobby the government to set up mobile consumer courts for rural consumers and special consumer courts for quick disposal of consumer complaints.
Many economic policies as they exist today are working against the consumer. For example, if the banking industry decides to go on strike, the employees do not lose as they get their wages, the employer too has nothing to lose, and it is only the consumer who faces the inconveniences.
Therefore, organizations should insist concerned authorities to change such policies:
a. Despite the package of legal measures, it is found that the trading and manufacturing lobby tries to subvert the protective laws. Government officials are often bullied into pressure to use their discretionary powers. The quality control inspection staff is also put under pressure not to prosecute offenders. Such things should be brought to public notice by the consumer organizations to safeguard consumers.
b. Since it is a computer age, organizations should try to computerize for quick interaction.
c. Organizations should celebrate World Consumers Rights Day on March 15, every year to convey their solidarity. On the day, programmes arranged should be constructive and educative such as symposiums, workshops, exhibitions, rallies and discourse by experts especially on environmental awareness, which is the need of the hour.
d. The organization should be willing to admit a mistake if proved with facts.
The organization should be impartial and transparent:
a. The members should set an example by practicing what they advise to consumers.
b. Consumer activists should avoid lose talks. One should not give vague impression about what they speak and act.
c. Organizations should be non-violent.
d. Ignorance of law is not an excuse. So it must be the bounded duty of the organizations to study the existing consumer protection laws and amendments and enlighten the consumers.
e. In most countries, services like telephone, electricity, water supply and public distribution system are managed by government agencies but there are so many complaints pertaining to these public utility services. Therefore, organizations should form a vigilance group to watch them.
f. Organizations should act as a strong watch dogs and lobby governments to implement effective consumer protection laws when and where required instantly.
g. Organizations should put pressure on governments to extend financial help for their activities since what they are working for consumers actually should have to be done by the governments. However, the organizations should try to finance themselves.
h. The meetings of the organization should be regular, frequent and informal where the members are allowed to express freely and openly.
i. There is too much political interference which misleads the organization. Most of the time the aims and objectives of the organization are disturbed by the political interference and weaken the strength of the organization. Therefore they should be non-political.
j. Consumer organizations world over should campaign for the reduction of Global Burden of Malnutrition.
Last but not the least, organizations should interact and co-ordinate with co-organizations. Co- ordination and working with national and international bodies will create Collective Consumer Search Capital (CSK) which would be useful for every consumer organization to spread the consumer movement world over and to face this changing and challenging globalized market scenario.
Robert R. Kerton, Professor of Economics, University of Waterloo has developed a concept, which has come to be known as Consumer Search Capital (CSK). There is great hope for using this concept for our conditions in India to help make better consumer decisions.
The concept CSK is defined as “the accumulated stock of decision making principles and data which can be used to increase the effectiveness of consumer decisions”. Since the concept CSK consists of a collection of searching and bargaining strategy that the consumer can employ in the market place, it ultimately determines the quantity received per unit of currency. The value of CSK is far larger than what seems to be at first examination.
The concept obliges us to give explicit attention to these consumer skills and strategies.
The CSK must be regarded as a capital because first the skill give services overtime, and second time and resources are used to create this capital. The process of accumulation of decision-making principles must be viewed as an investment. Such investments are of two types i.e., private and collective CSK. The private CSK is created on an individual basis, whereas collective CSK is in the form of consumer associations and government departments.
Collective CSK is often far more economical compared to individual CSK, especially when there are economies of scale in the collection of information. To be more precise, some government departments would serve as collective CSK. The accumulation of CSK provides a better decision-making status to a consumer. This accumulation is possible through an organized system of consumer oriented education and information gathering.
As a prelude to this accumulation of CSK, let us take a look at existing conditions in India, which is still a developing country. Here we are constantly confronted with a number of unscrupulous market practices. Quality of products is always poor. Cost curve is on a constant upward move. Nefarious activities like adulteration and duplicating and faking with no exception to price cheating have become too common.
If the consumer in India were to face such a complex developing situation he is to be initiated by individual and collective bodies including government agencies who act directly to mitigate the sufferings of the consumer, organizations who take on the role of a lesion between the individual consumer and government agencies.
Part of the responsibility of educating the consumer lies more with the voluntary agencies as they have a better consumer problem and accumulate more CSK through experience and information.
In a developing country like India the consumer is at greater risk while taking market decisions. Because consumer in a developing country is exposed to the glittering and colourful standard of living that his counterpart in an advanced country enjoys and would desire to be placed in a similar situation.
There is constant conflict between desire prompted wants and need based requirements. “Wants are insatiable”, says the economist. It is sure, but in our Indian situation wants are many and resources are few. The gap between production and consumption, cost of production and price level has never been bridged and a balanced coordination of these factors, of production, resources, prices and management and distribution etc. have not been commensurate with each other.
In India more than 2/3 of the population is still illiterate and ill-informed according to Central Statistical Report of India, 2004. As consumer at large has to grapple with problems of under nourishment, over population, poverty, unemployment ill-health and host of other problems, so the CSK has special importance.
At the same time it needs special formulation to be lamented that, poor as we habitually become passive as an economic group with low CSK, Poverty does not lend the consumer the desired strength to question and to resist the attempts of victimization. We just let things pass and resign to a status of apathetic situation of futility. It is suggested earlier in this paper that voluntary organizations can do as much to be of service to the consumer as government agencies.
And it is also economical and more effective to raise voices in a collective manner, which is bound to be heard, whereas a single voice ends pup in thin air. When consumers are united there is strength to be reckoned with which ultimately wins. The Consumers International in Malaysia, Australian Consumer Association and Consumer Education and Research Centre in India are some of the examples that could be cited for organized consumer movement which go to prove the importance of collective CSK as being useful in a developing country.
The theory of CSK could be very profitable when applied to our conditions through consumer associations where collective CSK is embodied and this collective CSK does have significant effects on the progress of developing countries. This is also especially significant to people with low incomes.
In a developing economy the market is flooded with an ever-increasing variety of goods, which also leads to more competition and subsequent dubious market transactions. This situation is again a better care for application of CSK concept. While trying to adopt Kerton’s CSK methods to our developing situation, it is imperative to suggest certain more practical and adoptable techniques for consumer movement in our country.
These techniques could be adopted at broadly three levels:
3. Government Sponsored
In the first place, awareness among consumer fraternity about their rights and privileges has to be created. This is best done through providing education followed by information. As an individual, a consumer can do well by gathering more information about the commodity market; the standards and quality, production and distribution and unscrupulous market practices, allocation of budget based on priorities and needs.
He should also make competitive studies of commodities he buys through available information and consultation with knowledgeable people and neighbors and make his purchases worthwhile. His principle should be that what he has bought is worthy of the unit of money spent.
As a collective example several organizations devoted to consumerism already exist in this country though in a very small number. According to Kerton, it is this collective CSK gathered through voluntary organizations can do yeoman service in our country. If consumer associations were to be more effective under an Indian condition they will have to be on a wider and more decentralized pattern. That means even individual consumer should have easy access to the organizations.
The programmes of organization should be such that the consumers are primarily educated in matters of consumerism and get suitable and adequate information, which ultimately places them in a good state of defense. The consumer body should also try to use all available sources to disseminate useful information to the consumer in a better and acceptable fashion. This entails the production of simple, readable and illustrated materials which is helpful for the consumer.
The State Government should have a greater responsibility towards the consumer. The consumer protection activity put forth by the governments is far too inadequate considering the magnitude of the problems that the consumer has to face today. It would be more appropriate that each state in our country has an autonomous, well-organized and adequately staffed expertise formed.
The governments also on the other hand should examine the possibility of remodeling the existing educational structure to be more consumers oriented. In short it would be highly ideal if every consumer who goes to school has an opportunity to learn and as a consumer he has every right to safety, to be informed about protection and education. The government should also instruct the communication media under its control to intensify consumer-oriented programmes.
We know that active consumerism started from the US through high thinking great men like, John F. Kennedy, former President of the US in 1962. But the consumer guidelines being developed then were not much useful for consumers in the under privileged in developing countries. It is vital that we have to find a useful technique available to India; Consumer Search Capital is one technique we must deploy.
Consumerism in India – Present Status of Indian Consumerism
The consumerism in India is as old as trade and commerce itself. Indian history reveals that in various periods and regimes of different Kings and dynasties prior to the British rule, there were enactments to punish the dishonest and unfair traders and producers. During the middle ages, the dishonest traders had their hands cut-off and a trader selling shoddy goods was dragged around town with his wares tied around his neck!
Indeed in 200 B.C. there were laws in India against food adulteration. The laws of Manu (a great classical philosopher) and Arthashastra of Kautilya (a great classical economist) also refer to the punishment to be awarded to dishonest traders. The British introduced some laws in India such as the Sale of Goods Act, Weights and Measurement Act which were being followed in England. Some organized efforts to protect consumers from the middlemen were made in the 1940s by eminent freedom fighters such as Sri. Tanguduri Prakasam, C. Rajagopalacharie in southern India.
They started consumer co-operative stores to supply retail essential commodities. This became a social movement and the concept of consumer co-operative movement spread to different parts of the country. Today consumer organizations such as Mumbai Grahak Panchayat, Consumer Education and Research Center (CERC) in Ahmedabad under the guidance of Indian Ralph Nader, Professor Manu Bhai Shah are continuing this approach to consumer welfare by organizing seminars and workshops.
The origin and growth of consumer movement in India has many similarities to the movement elsewhere. In the 1960s, organizations such as Consumer Guidance Society of India, Mumbai was formed to inform and educate consumers on the quality of goods and services and to conduct simple tests on goods of daily consumption.
Shortage in supply of essential commodities and unsatisfactory functioning of the public distribution system led activists to form consumer organizations in their towns and localities to ventilate their grievances to the authorities concerned. Several such organizations which were formed between 1970 and 1980 were concerned with the problems of inflation, food adulteration and public distribution system. These consumer organizations serve a useful purpose as voluntary vigilance groups in the market place.
The third phase of growth covering the period from 1981 to 1990 signifies the expansion and consolidation of the consumer movement in India. Especially after the enactment of Consumer Protection Act of 1986, there has been a spurt in the number of new organizations in the country.
The period from 1991 to 2000 A.D. is being considered as a period that empowered the Indian consumer. Consumer education, product testing, product safety and promotion were well activated.
Hence, the consumer movement in India has come of age. Consumer organizations have always felt since the movement started picking up in the 1970s, that there were benefits in numbers. Beginning with less than 10 organizations in 1965, by 1996 established over 900 consumer organizations and today there are more than 2000 active consumer organizations all over the country.
In 1974 the then existing consumer organizations at the Second All India Consumer Conference had convened at Bangalore, stated that a time has come for the consumer organizations in India, not only to work in small groups but also to work with the help and guidance of a central agency so that Indian consumers can organize and voice their opinion to the government and act as a cohesive force to defend and faster their interests.
This conference was determined to form a federation and its purpose would be to inform, educate and guide its affiliates to the greater advantage of the Indian consumer. Unfortunately, the central agency could not take off at that time because they did not have 7 members needed to sign as founder members. In 1989 some consumer activists once again tried to form central agency and in February 1991, the Confederation of Indian Consumer Organizations was formed in the Second National Convention of Consumer Activists in Delhi.
The primary objective of CICO was to make the consumer movement a popular grass-roots movement. It was felt that the primary target of CICO should be facilitating the formation of state level federation of consumer organizations.
Consumers in India need more exposure to consumerism and consumer education. In a developing country like India, the consumer is at special risk while taking market decisions. As a consumer, one has to grapple with the problems of undernourishment, over population, poverty, unemployment, ill health and a host of other problems. Most often poverty which is considerably widespread, does not lend the consumer the necessary strength to question and to resist the attempts of victimization.
Today an average Indian consumer is mostly poor, illiterate, ignorant, apathetic or just defeatist and continues to be at the receiving end. A recent study indicated that Indian consumers are cheated to the tune of Rs.20,000 million a year, either by poor quality or less quantity or by overcharging the poor chap who is always at the receiving end. A survey conducted by Consumers Guidance Society of India in collaboration with the Health Department of Mumbai Municipal Corporation revealed that almost half of the samples of groundnut oil collected from various parts of the city were adulterated.
Another report indicates that 20 to 50% of foodstuffs sold in the market are adulterated. The gradual increase in the liver cancer cases in certain parts of India has even been attributed to the adulteration in edible oil.
The condition of rural consumers is very miserable as they buy goods mostly in loose form and in small quantities without weighment. Most of these goods may not be of standard quality. It has generally been experienced by buyers in sub-urban areas. Shops in villages and hilly areas charge even more than Maximum Retail Price (MRP) on one pretext or the other.
In urban areas also a lot of spurious goods are sold at the rates of genuine goods. Thus cheating the consumers by rate difference by supplying low quality goods. However, much would depend upon the consumers to unite for awareness about their rights. Consumer King a concept of Benham, an economist of England is a myth in India because consumers are totally in the dark for reasons which are evident in developing countries.
The reasons being:
2. Lack of consumer education
3. Age old inherent submissiveness among consumers
4. Lack of knowledge about consumer rights
5. Innocence and implicit faith
6. Economic backwardness
All above said factors lead to take unwise decisions and improper purchasing. In today’s globalized era the problem of a consumer is of very crucial importance. Protection connotes someone is there as protector and protected. Consumer problem often is depicted as trader versus consumer but the trader himself is also a consumer. In Satyuga no violation took place as all performed their purest duties dictated by the divine law.
However, an unmistakable duality exists in the way the consumer has been represented in the literature on consumerism. The dominant position is that all consumers function as free, discriminating, and happy individuals, making rational choices while consuming goods and services in the market. Diametrically opposed is the view that the consumer is an irrational being irresistibly drawn to the market, but unaware of the imminent threat posed by it.
Sometimes this distinction is made to differentiate between consuming communities among which high information and awareness prevail, from those where they are low. All consumer awareness/protection movements ideally aim to create an ‘informed’ consumer. It seems that with the gradual transition of the feudal into a market society, the term consumer began to earn greater respectability. By the nineteenth century consumer came to be used as a counterpoint to the term producer.
The nineteenth century view of the consumer has survived in most capitalist democracies. In fact, consumers have a ‘secondary relationship’ with goods and services, because they are forced to live with and through services and goods that they themselves did not create. Thus, the consumer still remains as a ‘marginal group’ in today’s dominant market economy of the world.
Indian market today is dominated by the consumerism, particularly after a decade from economic reforms process. It is gradually being transformed from a predominantly sellers’ market to a buyers’ market where exercised choice by the consumers depends on their awareness level.
Consumer rights could be protected in a competitive economy only when right standards for goods and services for which one makes payment are ensured by evolving a network of institutions and legal protection system. Ensuring consumer welfare is the responsibility of the government as every citizen of the country is a consumer in one way or the other.
However, the present day’s world is generating impurities of all kinds. The consequences of today’s mass consumption are leading to generation of these impurities in basic livelihood resources and the degrading environment badly. Therefore, the production of good human beings is more important than production of goods and services only.
He suggested that the issue of protecting the consumers calls for evolving healthy Institutional back up system, awareness generation and grievances redressal system. Our school curriculum should include consumer rights and traders obligations to the society.
The healthy markets only could maximize welfare of the consumers with certain underlying assumptions. However, in most of the developing countries the markets are imperfect and sick. Net result in such situation is the exploitation of the consumers. In a rudimentary economy, commodities were exchanged for commodities as per their use value.
This situation changed to the exchange of commodities for money further leading to commodities production as per the requirements of the consumers. In present days world the situational is diametrically changed to profit maximization by resorting to investment in terms of money for commodity production and earning more money as per the exchange value of goods and services. Commodities and services under these circumstances are primarily produced for exchange value. It is desirable for assigning due consideration to the traditional Indian view point of Bhoga.
The efficient and effective programme of Consumer Protection is of special significance to all of us, as we all are consumers.
Even a manufacturer or provider of a service is a consumer of some other goods or services. If both producers/service providers and consumers realize the need for co-existence, adulterated products, spurious goods and other deficiencies in services would become a thing of the past.
The active involvement and participation from all quarters i.e. the central and state governments, the educational Institutions, the NGO’s, the print and electronic media and the adoption and observance of a voluntary code of conduct by the trade and industry and the citizen’s charter by the service providers is not only necessary but a sine qua non for the success of the Consumer movement.
The need of the hour is for total commitment to the consumer cause and social responsiveness to consumer needs. This should, however, proceed in a harmonious manner so that our society becomes a better place for all of us to live in.
The existing consumer protection initiatives in India address only to the needs of the elite and empowered consumers. A disempowered consumer on the other hand, has no alternative choice except to agitate or may resort to violent resistance sometimes. Many problems arise only when consumption is regarded as a derivative of production. Numerous deceptive, disruptive and misleading tendencies are followed mainly through advertisements to mould the needs of consumers.
The average Indian consumer is susceptible to capitalist controlled media influences and is self- depreciated and unsure of his needs and wants. Indian consumers need to be understood and their problems resolved through law and other devices. He discussed theory of commodity fetishism deployed to explain subjective feelings towards consumer goods. Indian consumer needs to be taught, trained and should be made to learn to consume. Consumer should not ask what the government can do for them but first think what they can do for themselves.
The problem of protecting consumer rights that requires in the first place existence of basic minimum rights as individuals. Secondly, the basic minimum entitlements need institutional acceptance as rights. In underdeveloped countries like India rights based institutional approach is often missing, either because of non-existence or improper functioning of intuitions and because of weak bargaining power of individuals.