Bhanoji Rao

At the end of the day, every individual is a consumer, regardless of occupation, age, gender and community or religious affiliation. Two invincible laws that govern the lives of individuals are that of diminishing incremental utility from consuming more of a particular commodity and the law of multiplicity of wants operating on their own and naturally springing up from the operation of the first. The two laws together are behind most human actions and activities. They propel economic growth and development via the constant widening of the variety of goods and services produced and consumed. That very process of ‘development’ calls for safeguarding the interests of the consumer to the maximum extent possible.

What has been our record of consumer protection? What else needs to be done? These issues are briefly addressed in this article, which draws upon the report of a Planning Commission Working Group on Consumer Policy.

Indian Legislation and Ground Reality

On April 9, 1985, the General Assembly of the United Nations adopted a set of general guidelines for consumer protection, which are for use by member-countries to incorporate through policy changes or law. Under the guidelines, consumer protection encompasses seven areas: Physical safety; protection and promotion of the consumer economic interest; standards for the safety and quality of consumer goods and services; distribution facilities for consumer goods and services; measures enabling consumers to obtain redress; measures relating to specific areas (food, water and pharmaceuticals) and consumer education and information programmes.

Soon after the adoption of the UN guidelines, India enacted the Consumer Protection Act, 1986. The Act enshrines various rights to safeguard the consumer, which include: Protection against marketing of goods/services which are hazardous to life/property; information about quality, quantity, potency, purity, standard and price of goods/services to ensure protection against unfair trade practices; assurance, wherever possible of access to variety of goods and services at competitive prices; redressal against unfair trade practices, and so on.

To bring practical effectiveness to the provisions of the Act and assist the consumer at the ground level in redressing grievances and sanctioning compensation where necessary, the Act provides for the setting up of District Consumer Forums (DCFs).

According to an ORG-MARG report, available as an Annexure in the Report of the Planning Commission Working Group on Consumer Policy, 66 per cent of interviewed consumers were not aware of consumer rights and 82 per cent were unaware of the Act. Only 13 per cent of the consumers said they were in the know of the existence of redressal agencies.

The vast majority did not know that a consumer could argue his or her own case in the DCF. This is substantiated by the fact that, on an average, a little over 80 per cent of the total expense per case was incurred on advocates.

Working Group Report

Given the dismal state of consumer protection on the ground, it is pertinent that the Planning Commission Working Group has made an array of significant recommendations. They cover new legislation and institutions, capacity-building, educational intervention, collaborative programmes with higher educational institutions, fellowships for research, enhanced participation of consumer organisations and scientific bodies, nation-wide awareness campaigns, foreign training for personnel involved in consumer protection and public private partnership (PPP).

It is heartening that the Group has recommended the removal of constraints to internal trade and the ‘creation’ of a “Common India Market”. What consumer protection can we speak of with border controls within India? Fortunately, nobody has thought of an internal Indian visa, to be stamped every time one crosses, say, the Andhra Pradesh border from Tamil Nadu. That would have ended internal tourism and the production and consumption of all related services.

Equality of opportunity in regard to consumer choices is addressed in the recommendation in support of “a network of private non-commercial laboratories for testing of food, petroleum and other common consumer products.”

There are useful recommendations on new legislations and institutions, examples of the latter being a National Quality and Standardisation Authority, a National Consumer Protection Authority, National Electronic Spot Market and a National Enforcement Authority.

Freedom to Choose Sans Choices

Consumer policy is not mere protection of the consumer, if there is hardly any consumption due to poverty and if those above the poverty line are unable to exercise choices in consumption due to lack of them.

The poor and deprived on the income dimension need attention and inclusive growth to bring them above the poverty line, not via charity, but by providing them with employment on a sustained basis. Integral to giving them employment is not only education and skill development, but also exploiting fruitfully the vital link between the consumption of those above the poverty line and the jobs of those below the line.

Are there effective choices for the non-poor in terms of consumption? As an economist, and one fortunate to be above the poverty line, I really have a lot of freedom to choose in consumption but have no choices, in effect. Many manufacturers and distributors of goods and services deprive me of merchandise I would like to consume, though they are available at some place or the other in the country.

Despite all the noise about the retail revolution, it is impossible to get the same brand of product in different places and at various retail outlets. One must be lucky to get what one wants. The shop, and not the shopper, decides on what is available in the store and, hence, what one has to consume.

Even in the so-called shopping centres and supermarkets, the lack of knowledge and/or application of the art and science of logistics result in consumer deprivation, despite the fact that the product is produced in the country and is available elsewhere. The consumer in India is not yet the king, though the situation is improving over time.

Going by the definition of development as widening of choices, the vast majority in India have not much choice and are denied development in that sense. These people live/shop outside the city-centres in the metros, in cities other than the metros, in small towns and, finally, in the vast rural tracts.

Critics are welcome to cry foul about the American supermarkets on the grounds of putting too much consumerism in the pockets of consumers. Yet, it should be acknowledged that the hallmark of those retailers is providing the same goods at identical prices in each and every outlets regardless of the size of the community being served. The vast network of retail chains permits customer satisfaction to the highest degree. Seen in this light, India has a long way to go.

We should perhaps make it mandatory for all retail outlets, at least those established by corporate houses, to ensure supplies on a uniform basis and create dedicated consumer complaint centres.

If one match-box has less sticks than the other, or if the coffee-powder bought at the local shop tastes like tea-dust, the retailers in the complaint centre should see to it that justice is done. If each and every consumer were to think of going to the Consumer Forum, a lot of time would be spent in the Forum.

(The author is a visiting faculty at Sri Sathya Sai University, Prasanthi Nilayam. He can be reached at

(This article was published in the Business Line print edition dated September 18, 2007)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.