THE consumer movement in India originated with the necessity of protecting and promoting the interests of consumers against fraudulent, unethical and unfair trade practices, and to advocate for poverty amelioration. While the ushering in of economic liberalization in the early ’90s resulted in many positive developments vis-a-vis the enhancement of consumer interests, it has also thrown up significant challenges which need to be addressed as concerns of common people as well as new generation consumer issues, including those which are emerging from an evolving mosaic of utility regulations in India.

The CoPRA (Consumer Protection Act), enacted in 1986, is one of the generous social legislations intended to protect consumers from exploitation. The act seeks to provide for better protection of interests of consumers and for the purpose, makes provisions for the establishment of consumer councils and other agencies for the settlement of consumer disputes. The main aim of the act is also to ensure the rights of consumers and protect them from exploitation by traders/dealers and service providers. The act has become a vehicle for enabling people to secure speedy and inexpensive redress of their grievances.

One of those forward looking legislations which enabled India to pursue a gradual path of liberalization with safety nets, CoPRA, enacted in 1986, attained its silver jubilee in 2011. After the enactment and execution of the law, consumers are now in a position to declare ‘sellers be aware’, a shift from the rule of ‘caveat emptor’. However, the findings of a recent study are alarming.

Though the act in India is currently in its 27th year of functioning, only 20% of consumers in India have heard about it, and 42% are aware about their rights. These are some highlights of the ‘State of the Indian Consumer 2012’, published by CUTS (Consumer Unity and Trust Society). This report was the final output of a project entitled ‘Indian Consumers in the New Age: a forward looking agenda to address the concerns of the common people’ (Consumers Up), which CUTS implemented with the support of the Department of Consumer Affairs, Government of India.

 

However, a major cause for worry revealed by the survey is the fact that people are slowly losing trust in consumer redress mechanisms. Fifty three per cent respondents of the survey did not know about the available external redress mechanisms. Out of the 47% of consumers who knew about the external redress mechanisms, only 28% believed that they were easily accessible to common people. Only 33% of the cases before all the three tiers of the redress mechanisms were resolved within the stipulated time frame.

The report is divided into different chapters covering all consumer rights and consists of an analysis of the state of implementation of consumer rights in India, based on a comprehensive review and findings of an indepth field research. This research was based on a quantitative and qualitative sample survey covering 19 states and three union territories: Haryana, Tripura, Jharkhand, Karnataka, Kerala, Andhra Pradesh, Madhya Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand, West Bengal, Chandigarh, Delhi and Pondicherry.

The study concluded that not only did consumers in India need to be more aware of their rights, but that the consumer movement should also reach the rural masses. In addition, the three-tier, quasi-judicial machinery at the national, state and district levels should provide, as stipulated, simple, speedy and inexpensive redress for consumer disputes. The redress system is the backbone of the Indian Consumer Protection Act, and the entire consumer protection mechanism needs to be made workable for both urban and rural consumers.

With the completion of 26 years since the CoPRA was enacted, it is time to introspect on the achievements and analyze the pitfalls to make the law more effective and efficient. This is exactly what this report on the State of the Indian Consumer intended. The study is based on a comprehensive survey of consumer concerns, and the framework of consumer rights as per the UN Guidelines on Consumer Protection 1985.

In this report, a total sample of 11,499 households including a reasonable (statistically significant) number of providers of consumer rights (members of consumer courts, departmental officials, etc) were surveyed to understand the current status of the Indian consumer and to derive policy lessons.

 

Consumers have the following consumer rights:

Right to Basic Needs: Basic needs can be broadly described as the elements required for survival and normal mental and physical health of people. As far as its origin is concerned, it is not a new concept, as the UN Guidelines have specified three areas in relation to basic needs. However, the Charter of Consumer Rights drafted by Consumers International identified seven types of goods and services and public utilities that come under the purview of basic needs. In the goods category, there are two: food and clothing. Healthcare, drinking water and sanitation, shelter and education are in the service category. In the public utilities services, transportation and energy are included. This takes the number of basic rights to eight. There is another basic right that has recently emerged in India – right to employment. Its inclusion further extends the list of basic needs to nine.

In the last decade, India has put in place many acts/laws designed to empower its citizens which, in turn, could facilitate fulfilment of a number of basic needs. Recognizing that income forms the base for realization of fulfilment of basic needs, the government introduced the National Rural Employment Guarantee Act (NREGA) in 2005. Various other laws/regulations focusing on issues such as universalization of elementary education, housing for the poor, issues of unorganized workers, child hunger and malnutrition have been enacted. These regulations directly or indirectly influence citizens’ right to basic needs. However, in spite of these legislations, this basic right still seems to be a distant dream, mainly because of its improper implementation.

The survey found that only 22% respondents were satisfied with government’s effort to ensure adequacy, accessibility and affordability of basic needs, whereas 53% believed that right to basic needs should be implemented properly to cover products and services such as food, housing, health, water, education, sanitation, energy, transport and communication.

 

Right to Safety: Right to safety means the right of the consumer 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. The UN Guidelines clearly mention the right to safety as one of the inalienable rights of the consumer. The guidelines provide a framework for governments, particularly those of developing countries, to use in elaborating and strengthening consumer protection policies and legislation. They also intend to encourage international cooperation in this field.

Safety has been dealt in at least 25 different Indian acts. What is lacking is a periodic monitoring mechanism to ensure that the rules and regulations are being implemented to minimize risk. This periodic monitoring can be done by an independent safety commission which should have the teeth to punish non-compliance. Till the time such a commission is established, the Department of Consumer Affairs can proactively undertake this role and urge relevant authorities to form such a commission.

Moreover, in India, to realize the right to safety, it is not enough to just have safety acts and policies in place. It is equally important that acts and policies are implemented well, monitored and popularized among the mass, so that the people too can play a constructive and participatory role to ensure their own safety. Unfortunately, even in modern India, nearly 40% of consumers do not refer to any safety or quality certifications such as ISI, ISO, Agmark, or Codex before making a purchase.

 

Right to Choice: The choices available to Indian consumers across the basket of goods and services have multiplied ever since the reforms of the early 1990s, whether in telecommunications, air travel, banking, electronics or fast moving consumer goods. The survey conducted by CUTS show that consumers’ knowledge about this right is very low.

Lack of awareness is a major reason. Very few consumers are even conscious of the fact that many sectors do not offer choices in products. During the survey, only 1.6% of respondents were able to correctly name at least one product/service that had only one or two producers/providers. This shows that Indian consumers are highly tolerant of oligopolistic practices. Likewise, poor implementation of government policies and laws is another impediment to consumer’s right to choice. The gaps in public distribution system leaves the below poverty line consumers, who depend on rations, virtually without a choice. Moreover, the laxity in enforcing the Prevention of Food Adulteration Act has resulted in flooding of the Indian market with toxic fruits and vegetables, which consumers have no choice but to buy, because these are essential goods and there are no viable alternatives to procure them.

The Indian consumer’s right to choice, as enshrined in the CoPRA 1986, can only be exercised by the elimination of various factors that currently impede it. The strength of the right to choice of consumers is directly proportional to the level of competition in the economy. Competition provides consumers with variety in goods and services, while keeping a check on price and pushing each producer to improve quality.

 

Right to Information: For a consumer, the right to be informed means the right to be given the facts needed to make an informed choice or decision. There are enough rules and regulations in place which compel the manufacturers and packers to provide essential information to consumers. What is lacking is strict enforcement and monitoring. Also, there is need for a massive awareness campaign and information dissemination about the existing legal remedies available to an aggrieved consumer. As per the survey, only 20% respondents were aware of or had heard about CoPRA 1986, while only 14% had knowledge about the Weights and Measures Act 1976.

More importantly, there is a dire need for stringent and effective labelling laws as the existing ones have been diluted over the years. The Legal Metrology Act is an example. Earlier, the Standards of Packaged Commodity Rules was truly standardized. But recently the rules have been modified and products like biscuits, cookies and other products can be sold in different standard packages. As a result, consumers are unable to compare the prices and quantities. Therefore, there is a need for strengthening consumer advocacy.

Finally, there is a need to frame a law to deal exclusively with providing information to consumers, be it food products, medicines, motor vehicle spare parts or any other consumer product.

 

Right to Consumer Education: Educated and informed consumers are essential for the emergence and sustenance of an efficient market. An educated consumer can make a rational choice of goods and services and protect his rights and interests from the exploitation of unscrupulous businessmen or service providers. Where literacy rate is high and social awareness is greater, the consumers cannot be subjected to exploitation. Thus, consumer education becomes a priority concern. The UN Guidelines on Consumer Protection lay great emphasis on consumer education. The guidelines impose an obligation on governments to develop or encourage the development of general consumer education and information programmes, bearing in mind the cultural traditions of the people concerned.

In India where the bulk of consumers are in rural areas, they are susceptible to easy exploitation by unscrupulous businessmen. An intensive, broad-based multimedia campaign is slowly yielding fruit, as the percentage of consumers who are aware of their rights and interests is increasing. The survey conducted by CUTS found that a little more than 40% respondents were aware about consumer rights, while 52% of consumer organizations reported spreading consumer awareness as a major tool for promoting consumer rights. Thus, an introduction of consumer issues with greater vigour in school and college curriculum, the establishment of consumer clubs in education institutions, increasing involvement of CSOs in consumer awareness programmes, would further strengthen the task of consumer education.

 

Right to Redress: It is the duty of a welfare state to guarantee everyone in this country a right to live with human dignity, free from exploitation. In India, there are a large number of laws, which have provisions for protecting consumers. Consumers can seek redress through judicial and quasi-judicial state organizations and through various other codes of practice, i.e., the informal redress delivery system. However, ignorance on the part of consumers, procedural delays and lack of vigorous implementation make it a non-functioning mechanism. It has been noted that a large number of cases were not redressed within the stipulated time frame prescribed by the law due to various reasons.

A survey by the Consumer Unity and Trust Society revealed some startling information. Nearly 93% respondents did not make a formal complaint, while only three per cent respondents registered their grievances with the company/producer. Additionally, only 0.3% respondents approached consumer forums for grievance redress, while 0.1% people approached sector ombudsman for redress. A major percentage of respondents (78%) rated the grievance redress process as ‘difficult’.

Some of the major reasons or limitations cited by the president and other members of State Consumer Disputes Redress Commissions and District Consumer Disputes Redress Forums were frequent adjournments sought by advocates/parties, lack of adequate administrative/support staff, educational status of complainant, vacant positions of president/member, limited number of benches, limited infrastructure (computer/office etc.), delay in lab testing, limited training initiatives and financial status of complainant.

In order to make the grievance redress process more convenient for consumers, an effective education programme on consumer rights should be initiated. Providing free technical and legal assistance to complainants will make the process more convenient. Consumers need to be educated about their rights and responsibilities through concerted publicity and awareness campaigns, which should focus on vulnerable groups such as women and children, students, farmers, rural families and the working class.

 

Right to Representation: Although UN Guidelines universally recognized consumer rights including Right to Representation way back in 1985, India has traditionally recognized the consumers right to representation for a much longer period. The CoPRA also provides a unique opportunity to consumer groups and individuals to represent consumer interests or consumer causes before consumer courts. The act allows the consumer to be represented by a person who is not a professional advocate. This provision is in recognition of consumers right to representation.

Apart from the CoPRA, there are other Indian statutes which provide for consumer representation, like the Electricity Act 2003 that provides for two-fold consumer representation in the power sector and the Telecom Regulatory Authority of India (TRAI).

The CUTS survey conducted as a part of this study throws light on the poor level of awareness and participation by consumers in such consultations and representations. Among the consumers surveyed, only 23% were aware about the process of public consultation or consumer representation. Of these, only 28% actually participated in such events. Some of the common barriers faced by consumers and consumer bodies from making effective representation include issues like lack of funds, expertise and training facilities among others.

Since Indian laws have recognized the importance of right to representation and provides for such consumer representations before various regulatory authorities, it is high time that consumer bodies gear up to accept the challenge and take adequate steps to train activists for ensuring effective representation of consumer cases.

 

Right to Healthy Environment: The Right to Safe Environment, as one of the consumer rights, is a kind of afterthought because earlier the safety of the environment was perhaps never in question. Consumers need to understand that only a safe environment can safeguard their rights. If people were to take a close look at their immediate surroundings and consumption patterns, they would find that they themselves are responsible for causing environmental pollution to a large extent. For instance, use of hundreds of cleaning aids and a lot of non-biodegradable packaging is responsible for environmental problems like water and soil pollution and waste disposal. In the consumer’s right to healthy environment, the UN Guidelines limit their recommendations to environmental issues related to the use/misuse of pesticides and chemicals.

In India, there is a comprehensive law with respect to a healthy environment – The Environmental Protection Act, 1986. It provides guidelines for the management of hazardous wastes; for example, it consists of safety report, safety audit, and others. However, when it comes to implementation, the effectiveness of this law gets diluted.

The role of government and NGOs is important to promote sustainable consumption through environmental education and public awareness campaigns sponsored by the Centre, state governments and advocacy groups. At present, only 13% respondents are aware of certifications and initiatives viz. energy star rating, Bharat/Euro emission standards for automobiles, organic food and natural textiles and recyclable plastic and so on. And among them, only 28% tend to buy such products.

To make the sustainability approach successful, India needs to follow the approach of incentivizing producers of green goods through preferential allocation of resources (land and raw material), facilitating development of infrastructure and making the supply chains of resources and technology more efficient and effective. Furthermore, there is a need to create a decentralized institutional framework for diffusion of information to the consumers at large.

However, things are changing – slowly but steadily – and the momentum has increased considerably due to the initiative of the government as well as efforts of a number of consumer organizations and the media.

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* The ‘State of the Indian Consumer 2012’ can be seen at: http://www.cuts-international.org/CART/consumersup/pdf/Report_State_of_the_Indian_Consumer-2012.pdf