By Ambuj Sharma & Pradip Kumar Kashyap
Consumer awareness about legitimate rights has been constantly growing in recent years. The consumer-protection movement is part of global recognition and concern that consumers are a weak party in buying goods and services compared to manufacturers and traders producing and selling them.
Ideally, a market economy where firms compete to sell goods and services to consumers should serve consumers’ interests better, but more often than not consumers are exploited by unfair and restrictive trade practices. Far from being sovereign, the consumer is too weak to resist or challenge suppliers of goods and services.
Therefore, even in a free market economy the consumer needs protection of rights by a legal authority. Consumer protection is necessary even in a controlled economy where public enterprises play a dominant role, since consumers may be denied their rights in such circumstances.
Most consumers buy goods and services after being lured by advertisements exaggerating the contents and quality of products or services. Legal support is required if they are to be protected from exploitation and deception by suppliers so that erring vendors are brought to book.
This increasing realization of the helplessness of consumers and the need to ensure their legitimate rights led to the resolution of the United Nations General Assembly in 1985 recommending preventive, protective and curative measures for the benefit of consumers. The resolution called for agencies for adjudication of consumer claims and conducive environments for consumer protection, and recommended Consumer Councils for redressal of complaints and claims.
The Need for Consumer Protection
Consumers are largely denied their due rights, especially in developing countries such as India. Consumers are spread widely over a country and are often poor, illiterate and generally unaware of their rights, though awareness has recently increased.
Manufacturers and suppliers of goods or services often exploit consumers through unfair and restrictive trade practices. They may merge and form tacit cartels to raise prices for maximizing profits at the expense of consumers.
In the case of drugs, manufacturers may charge high prices well above cost of production and some pharmaceutical companies may misuse patent rights to exploit consumers. Consumers therefore need protection from unfair and restrictive trade practices of producers and suppliers.
Misleading advertising is another means by which producers deceive consumers. Informative advertising provides information about availability of products at particular prices and is not objectionable merely for informing consumers. More often, however, manufacturers and suppliers use persuasive advertising to compete away customers from rivals and mislead ill-informed consumers about the quality and contents of products and services.
The cost of advertising is added to the cost of production and can lead to high prices. The article points to the large sums spent on film actors, cricket players and advertisements in print and electronic media and argues that consumers need protection from the deception of persuasive advertising.
Another highly injurious practice is adulteration of commodities. The article gives examples such as pebbles and dust mixed with wheat, maize, jawar and bajra, sand mixed with cement, leaves and bark mixed with tea leaves, and vanaspati mixed with desi ghee and butter. These practices are hazardous to health and life, with spurious drugs described as particularly harmful.
Government Role in Consumer Protection
The government can play an important role in protection of consumers through legislation. According to the UN Guidelines for Consumer Protection, government action is vital through policymaking, legislation and institutional authority for enforcement. Every country needs a minimum framework covering physical safety, protection of consumers’ economic interests, standards for safety and quality of goods and services, distribution facilities, redress, education and information programmes, together with machinery to enforce the legislation.
The Government of India has provided various laws and legislations to protect consumer interests, including:
- The Consumer Protection Act, 1986: one of the most important steps taken to protect consumers. It provides various rights and responsibilities, safeguards against defective goods, deficient services, unfair trade practices and other forms of exploitation, and a three-tier redressal system comprising District Forum, State Commission and National Commission.
- The Contract Act, 1872: provides the framework for binding parties to promises made in contracts and remedies in case of breach.
- The Sale of Goods Act, 1930: provides safeguard and relief where goods do not comply with express conditions and warranties.
- The Essential Commodities Act, 1955: controls production, supply and distribution of essential commodities, checks inflation and addresses black marketing and hoarding.
- The Agricultural Produce (Grading and Marking) Act, 1937: provides grade standards for agricultural commodities and the AGMARK quality mark.
- The Prevention of Food Adulteration Act, 1954: checks adulteration of food articles and seeks to ensure purity and public health.
- The Standard of Weights and Measures Act, 1976: protects consumers against underweight and under-measure practices.
- The Trade Marks Act, 1999: prevents fraudulent marks on products.
- The Competition Act, 2002: encourages healthy competition and protects consumers from companies that hamper competition.
- The Bureau of Indian Standards Act, 1986: provides quality marks for products meeting minimum standards, including the ISI mark, and a mechanism for complaints regarding products carrying the mark.
Conclusion
The efficient and effective programme of Consumer Protection is of special significance to all of us because we are all consumers. Even a manufacturer or provider of a service is a consumer of some other goods or services.
If producers/providers and consumers realize the need for co-existence, adulterated products, spurious goods and deficiencies in services could become a thing of the past. Active participation by central and state governments, educational institutions, NGOs, print and electronic media, the trade and industry and service providers is necessary to ensure that consumers get their due.
The need of the hour is total commitment to the consumer cause and social responsiveness to consumer needs. Consumers should be educated about their responsibilities and should organize together to develop the strength and influence to promote and protect their interests.
Government should make and implement harsher punishment rules so manufacturers and shopkeepers think twice before adopting fraudulent practices. Consumer-protection agencies should publicize the district, state and national machinery for consumer protection, make redress procedures easier to understand and design them for quick disposal of cases.