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About CUTS CITEE CART CHD Safety Watch Contact CUTS
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The sole and end purpose of all production is consumption. The purpose of economic planning is to allocate resources, as far as possible, to the satisfaction of consumers’ needs. This leads directly to the idea of consumer sovereignty, as the purpose of economic activity is to allocate resources to meet consumers’ needs. And then, there is logical, moral and political force in the proposition that the right person to make the decision about the allocation of resources to her/his own needs is the consumer her/himself. In the good old days, things were much simpler, e.g. the barter system, and the consumer did not face much problems in allocating her/his resources to satisfy her/his needs by choosing from a limited range of goods and services available. The situation has changed over time. Today the market place is huge but shrinking as well-in terms of faster reach and proliferation of organised business. Expressed the noted diplomat and economist, John Kenneth Galbraith: “It is not the consumer who is the king, but it is the large corporation who is the king in the economy. Whatever happens is not because the consumers wants it that way, but simply because powerful large corporations prefer it that way.” Furthermore, there is the question of poverty, i.e. of such consumers who are marginal players in the marketplace; the poor, low-income as well as socially disadvantaged consumers. All welfare states are committed to socio-economic welfare, including India, but development projects and priorities are often skewed or benefits do not reach the targeted population. It is unfortunate but also the reality in India, or for that matter in most developing countries. Marketplace distortions exist in developed countries too. Consumers are, more often than not, taken for granted. The United Nations General Assembly adopted the Guidelines for Consumer Protection on 9 April 1985 (the General Assembly Resolution 39/248). India is a signatory to the Guidelines. The Guidelines advises governments to carry out specific measures for protection of consumers. It also stresses the need for development of strong consumer protection policies. This is an overview of State of the Indian Consumer. Analyses and reporting have been done in the framework of the eight consumer rights, which the Guidelines addresses under five sections. The rights are:
2. Right to Safety, 3. Right to Choice, 4. Right to Information, 5. Right to Consumer education, 6. Right to Redressal, 7. Right to Representation, and 8. Right to Healthy environment. On the other hand, while the Guidelines call upon governments to adopt integrated drug policy, the drug policy announced in September 1995 is limited than the one of before. The policy looked after the interests of pharmaceutical industry only. Apparently, there was no consultation by the Ministry of Chemicals & Fertilisers (the relevant authority) with either the Health Ministry or the Consumer Affairs Ministry or civil society organisations, while drafting and adopting the policy. The examples cited above point out structural as well as systemic problems relating to the implementation of measures for consumer protection. The major problem is that there is a plethora of laws but poor enforcement (implementation), on the one hand. On the other, the sheer population creates market asymmetries. Bureaucratic insouciance, inertia and the ubiquitous corruption and the overall lack of good governance worsen these two factors. The Guidelines also calls upon governments to enhance regional and international co-operation, but India has done little in this regard. For example, SAARC (South Asian Association of Regional Co-operation) has 11 Technical Committees dealing with myriad issues, including poverty alleviation, but not one deals with consumer protection holistically. One reason for this could also be the lack of consumer protection legislation in the SAARC countries such as Pakistan and Bangladesh. Furthermore, the Report also finds that the Government of India has
never addressed the need for a comprehensive consumer policy. It argues
for one as the basis for good governance and protection of consumer rights.
For this, a draft National Consumer Policy statement is provided as annexure
to the Report.
The first and foremost question is why do consumers require “basic needs”. A simple answer is, for survival and dignified living. Then the related question-what is dignified living? The answer lies in justice-social, economic and political. And, unless there is justice there cannot be a free and fair society. In India, the conventional thought with respect to basic needs was proverbially limited to three items- Roti, Kapda aur Makan (food, clothing and shelter). Over time, several other essential items were included in the basket of basic needs-drinking water and sanitation, education, and health care. However, at least two more items are required to be added to complete the space called “basic needs”’:
More importantly, the issue is a sub-national one, i.e. under the management of either state governments or local governments. Resource constraints and lack of good governance hamstring these. Hence, the fulfillment of this crucial right varies from poor to bad. For example, local municipal authorities are required to provide a raft of civic services such as sanitation, drinking water etc. They are also empowered to regulate sectors such as entertainment, food marketing, health care etc. within their local jurisdictions. More often than not, both their functions as providers or regulators range from poor to bad. To protect themselves from being mandated to perform by courts, some of them have institutionalised protective clauses in their legislation. Thus, the Calcutta Municipal Corporation Act, 1980 prefaces its mandatory function with a clause: “subject to available resources.” What do the Guidelines say?
With respect to food, a broad definition of the right can be given in terms of food security. The issue of food security is a complex one. One has to consider not only the macro objective of food availability, but also people’s ability and access to acquire food. In India, the per capita per day food grain availability was only 510.1 grams in 1991. In recent years, the annual rate of growth of food grain production is less than that of population falling level of per capita availability! Regarding food security, which the Guidelines mention, but without much stress, the situation in India is bereft of structural problems (rigidities). Certainly, the issue is not that of availability per se. There is a number welfare measures catering to the need for ensuring food security for the poor; the Public Distribution System (PDS) being a major one. Despite its changing nomenclature, the PDS has not succeeded in its avowed objective. The reasons are many, and some of them are in-built in the system itself. For example, one major reason for corruption in the system is the low margins allowed to the fair price shop (retail outlets of the PDS) owners. However, the most important reason for failure of the system is that of the faulty perception of the objective behind it. It is to be noted that the PDS is not an alternative avenue for marketing of food grain but an institutional mechanism to ensure the availability of food at reasonable prices. Therefore, the objective should be based on the benefit principle, and not whether people are able to pay for food or not. Right to clothing
The issue was addressed in the Textile Policy, 1985 and the Textile (Consumer Protection) Regulation, 1988. The main objective was to enable the sector to increase production of cloth of good quality at reasonable prices for the vast population of the country. Another important measure was the de-licensing of the sector in August 1991. Under this policy, no prior approval is necessary to set up textile units including power looms, i.e. to enable increased availability as well as decentralised access to clothing. Right to health care
In India, the overemphasis on curative aspects of health care has resulted in a lop-sided health care system (in 1991, population per unit of primary health centre was 29,942). The National Drug Policy, 1994 did address this issue, albeit unfocused. The objective should be based on the preventive aspects of health care under the decentralised system of planning, and a rational drug policy. Right to drinking water and sanitation
In 1986, the Government of India adopted the Technology Mission on Drinking Water under which more than Rs. 20,000 Crores (US$ 4.73 bn) has been spent. But only 55.92 percent rural households had access to safe drinking water in 1991. Right to shelter
In 1988, the Government of India adopted the National Housing Policy. Among others, the Policy called for sustainable housing. However, in 1991, only about 42 percent houses were of permanent quality. Right to education
In India, successive education policies (National Policy on Education, 1986, the Revised Education Policy, 1992) failed to address the basic issue of universal and compulsory education. The adoption of a two-track approach-formal and non-formal education-has further accentuated the problems regarding primary education. An interesting trend is that, in case of primary education, the rate of growth of students per institution (174 in 1991 as compared to 149 in 1981) was greater than that of institutions per sq. kilometer (0.17 in 1991 and 0.15 in 1981). This indicates an increase in enrolment ratio and pressure on existing infrastructure to cater to the demand for education. Right to energy
Right to transportation
The right to safety is important for safe and secure living. Without any effective regulatory mechanisms consumers suffer most in terms of safety. In this context, the adage caveat emptor (buyers beware) is appropriate. Therefore, the right to safety means the right to be protected against products, production processes and services, which are hazardous to health or life. It includes concern for consumers’ long-term interests as well as their immediate requirements. What do the Guidelines say?
In India, there are constitutional, legislative and administrative provisions with respect to this right. Among the constitutional provisions, the most important one is the protection of life and personal liberty (Article 21). Legislative provisions formulate regulations and standardisation. Two major legislations are the Prevention of Food Adulteration Act, 1954 and the Bureau of Indian Standards Act, 1986. The administration deals with the implementation of these provisions. However, laws relating to consumers’ safety are not comprehensive-bits and pieces exist. Furthermore, when it comes to implementation the situation is dismal, to say the least. The issue of safety in the delivery of services also lies with local governments. For example, it is the responsibility of municipalities to ensure that fire safety arrangements are made in cinema halls, which are situated within their jurisdictions. Why is it so?
What are the solutions?
The right to choice deals with the issue of choosing between different alternatives. Under the micro perspective, it is the consumers’ income and marketplace distortions, which determine their right to choose between different goods and services. However, the macro aspects of this right rest on the broad economic policy objectives of the Government. In other words, there should be compatibility between the development objectives and the right to choice. Simply speaking, the right to choice can be defined as an assurance, wherever possible, of availability, ability and access to a variety of products and services at competitive prices. Then the related issue-does ‘competitive’ price always means ‘just’ price? It is here that the role of institutions (by taking into account both consumers’ as well as producers’ interests) comes in, i.e. to pursue the objective of right to choice under the framework of “welfare state”. What do the Guidelines say?
In specific terms, the Guidelines speaks about the following provisions with respect to the right to choice:
In India, there are several legislative and administrative measures, which address the issue of the right to choice. One of the most important one is the Monopolies & Restrictive Trade Practices Act, 1969. The objectives of this Act are to ensure fair competition among the producers as well as service providers. Also, the objective is to give consumers as many choices as possible. Another important act is the Bureau of Indian Standards Act, 1986. It seeks to set up a benchmark of high quality supported by a visible presentation. The idea is to help consumers to make informed choice. The implementation of this right involves several players-government (legislative), bureaucracy, producers, middlemen, and consumers. However, what is lacking is that of a holistic policy. The existence of too many laws and players make it difficult for implementation. Why is it so?
The second drawback is that often people are occupied with pre-conceived ideas regarding the process of development. Thirdly, the Indian producers are mostly engaged in price competition, not the quality competition, which is an essential factor for consumers’ satisfaction and value for money. Fourthly, very often the right has not been properly implemented due to the dubious role (like forcing an uninformed consumer to buy a particular brand) played by the middlemen. Finally, consumers are also responsible for its lack of implementation. This is due to the peculiarity of the majority of Indian consumers; they want their right but, at the same time, shirk their responsibility. What are the solutions?
Secondly, there should be right information about the product so that
consumer can make free and fair (informed) choice. Misleading advertisement
should be declared an economic and moral offence. On regulations, an effective
competition policy is required to protect consumers’ economic interests
(and also for public interest), particularly in this era of globalisation.
Furthermore, the role of the state and the market should be compatible
and complementary-not substitutes to each other.
The objective definition is the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services as the case may be, so as to protect consumers against abusive practices like price distortion etc. Therefore, the right to information is essential for making “informed decisions”. Therefore, consumers must be provided with adequate information, enabling them to act wisely and responsibly. What do the Guidelines say?
The following provisions are mentioned in the Guidelines with regard to consumers’ right to information:
In India, the implementation of this right is being done through constitutional, legislative and administrative provisions. Various interpretations of Article 19 (2) clearly state that there should be a definite policy or uniform guideline on the part of the state to help consumers make “informed choice”. Furthermore, provisions regarding the right to information are provided under the Consumer Protection Act, 1986, the Monopolies & Restrictive Trade Practices Act, 1969, the Standards of Weights and Measures Act, 1976, the Bureau of Indian Standards Act, 1986 etc. However, the drawback of the system lies in its inadequate implementation. Why is it so?
What are the solutions?
The following legislative and administrative measures are to be considered for the proper implementation of the right to information:
The right to consumer education means the right to acquire the knowledge and skills to be an informed consumer. Thus, the right to consumer education envisages the right to knowledge and skills needed for taking actions to influence factors which affect consumers’ decisions. What do the Guidelines say?
The following provisions are mentioned in the Guidelines:
The central and state governments have accepted the introduction of consumer education in school curriculum. The National Council of Education Research and Training (NCERT) is working on developing syllabus and textbooks on consumer education. The Indira Gandhi National Open University (IGNOU) has devised a syllabus for distant education on consumer protection. Furthermore, the Government of India through the Consumer Welfare Fund has the provision to fund consumer education programmes undertaken by consumer groups or the state governments. It is to be mentioned here that the role of the press is vital for educating consumers. Today, most of the leading Indian periodicals carry regular consumer columns, while television channels also have regular consumer programmes. However, experience indicates that educating consumers is not the same as informing them. It is an endlessly demanding task; of time, personal dedication and money. The situation in India is not different. Why it is so?
What are the solutions?
To achieve that the imperative is to adopt the following administrative
and legislative measures:
The right to redressal means the right to a fair settlement of just claims, not only economic but also social and political. The socio-political dimension of the issue stems from the fact that in a stratified society (polity) like India, vulnerable sections may not have real access to justice. It includes the right to receive compensation for misrepresentation of shoddy goods or unsatisfactory services and the availability of acceptable forms of legal aid or redress for small claims where necessary. What do the Guidelines say?
What is the situation In India?
Furthermore, COPRA envisages the establishment of Consumer Protection Councils at the Centre and in the states whose main object is to promote and protect the rights of consumers. These Councils are advisory bodies and meet once a year with a generalised agenda. Apart from the COPRA, redressal mechanisms are incorporated under the Monopolies & Restrictive Trade Practices Act, 1969, Indian Arbitration Act, 1940 (revised in 1997), and through codes of ethics of business. However, despite the existence of such a holistic law, the situation in India (with respect to consumers’ redressal) is bereft with problems (like delays in judgement, non-compliance with consumer courts’ orders etc.). Why is it so?
What are the solutions?
Secondly, there should be a Product Liability Law to save consumers from ill effects, and to proof ‘fault’ in the product and ‘negligence’ of the manufacturer. Such law should relieve consumers from the obligation of establishing negligence. Thirdly, there should be speedy redressal of cases. And for this, three things have to be done on a priority basis-improve the institutions, upgrade the quality of the personnel, and simplify the procedures. In order to fulfil the objective of effective consumer redressal, the following legislative and administrative measures are to be taken:
The right to representation (to be heard) means the right to advocate consumers’ interests with a view to their receiving full and sympathetic consideration in the formulation and execution of economic and other policies. This right includes the right to representation in the Government and other policy-making bodies as well as in the development of products and services before they are produced or set up. In other words, the right to representation is a right as well as responsibility on the part of the civil society to get justice. What does the Guidelines say?
What is the situation in India?
The second important representation mechanism is that of complaints to the government departments (under Article 350 of the Constitution of India). The Directorate of Public Grievances handles complaints to the Central Government. Thirdly, any individual or association can seek redressal through representation by filing writ petitions at the Supreme Court or at the High Courts. Fourthly, there is the proposal to introduce the Freedom of Information Bill which will facilitate the process of representation. Finally, consumer and other groups are using their right to representation as members of various Committees of the Government. However, again the problem is that of over-burdening the justice delivery system, and the apathy of the government machinery to hear peoples’ concerns.. Why is it so?
What are the solutions?
The following legislative measures are necessary for proper implementation of the right to representation:
Consumers not only have the right to consume goods and services, but should do so in a sustainable manner. In other words, resources used in the production and consumption of goods and services should be utilised in a healthy and ecologically sound manner. This is the rationale behind the right to healthy environment. Consumers can have access to the right to healthy environment through redressal and information. The object of environmental law, however, is not simple. In actual practice, both in the formulation of law and the actual application of it, one finds a great deal of complexity. Therefore, the issue has to be approached from two angles-quantitative as well as qualitative factors relating to the right to healthy environment. What do the Guidelines say?
The Guidelines are under review now. A separate section on promotion of sustainable consumption is added into it. Sustainable consumption as defined in the Guidelines includes meeting the needs of the present and future generations for goods and services in ways that are economically, socially and environmentally sustainable. What is the situation in India?
Why is it so?
What are the solutions?
To achieve the objectives and ways out, the following measures should be adopted:
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