CONSUMERISM IN INDIA

Consumer movement is a relatively new concept in India. Markets of the developing countries

like India are highly imperfect. It is a social and economic order that is based on the systematic

creation and fostering of a desire to purchase goods and services in ever greater

amountsConsumers are largely exploited because many of them are illiterate, ignorant and

unaware. Rural population is not integrated into the main stream of consumerism.

What is Consumerism?

Consumerism is an organised movement of citizens and government to strengthen the

rights and power of buyers in relation to sellers.

Consumerism refers to the wide range of activities of government business and

independent organisations designed to protect rights of the consumers.

Consumerism is a collective consciousness on the part of consumers, business,

government and civil society to enhance consumer satisfaction and social welfare which

will in turn benefit all of them and finally make the society a better place to live in.

The consumer is exposed to many hazardous - physical, environmental and exploitation

due to unfair trade practices.

The consumer needs protection against products which are unsafe for consumption such

as drugs and adulterated food products and products which may cause injury such as

defective electrical appliances.

Consumer needs protection against mal-practices and deceit by sellers.

Consumer should have adequate rights and right of recourse to redressal measures against

defaulting businessmen.

The need for consumer protection has been widely accepted all over the world. India has

also taken up the concept of consumer protection more seriously.

Our markets have become consumer oriented. Government is educating the consumers in

various ways like :

(i) Through advertisements about consumer rights in media such as newspaper, radio, T.V., etc.

(ii) Promoting consumer organizations in India.

(iii) Setting up consumer courts in India.

(iv) Making consumers aware about his rights by arranging seminars, workshops, etc.

In our Indian system, the consumer has six rights given for his protection from

exploitation from the shopkeepers or sellers.

Consumer exploitation means mistreatment or cheating with consumer by adulteration,

Thagi or in any other unfair form.

To prevent consumer from exploitation, our government have passed many Acts from

time to time. Some of them are as follows:-

1. Drug and Cosmetics Act, 1940

2. Prevention of Food Adulteration Act, 1954

3. Essential Commodity (supply) Act, 1955

4. Monopolies and Restrictive Trade Practices Act, 1969

5. Standard of Weights and Measures Act, 1976

6. Consumer Protection Act, 1986 .

Consumer Education

According to Philip Kotler, "Consumerism' is a social movement seeking to augment the

rights and powers of the buyers in relation to seller".

Consumer education is an important determinant of consumer protection. Consumer education

means to educate the consumers about their rights like-fight to be informed, right to safety, etc.

Consumer education helps the consumers in protecting them against exploitation by the

producers: Forms of consumers exploitatation by producers:

(i) Supply of inferior quality goods.

(ii) False information regarding quality of goods.

(iii) Adulteration.

(iv) Less weight or measure.

(v) Non-compliance of terms of guarantee.

(vi) Unfair Trade Practices like misleading and deceptive advertisements.

(vii) Charging price higher than maximum retail price (MRP).

(viii) Deceptive Packing.

(ix) Deficiency or negligence in services.

(x) Monopolistic Trade Practices : like creating artificial scarcity, etc.

CHARACTERISTICS OF CONSUMERISM

It is a social movement of consumers.

It provides balance between power and responsibility relationship.

It involves large number of organised consumer groups.

It aims to protect the rights of people as consumers in the society.

It is' the movement of people supported by government through suitable legislations.

It acts as a check on all kinds of economic activities.

It is a movement of volunteers.

OBJECTIVES OF CONSUMERISM

 "Consumerism" is also used to refer to the consumerist movement, consumer

protectionor consumer activism, which seeks to protect and inform consumers by requiring such

practices as honest packaging and advertising, product guarantees, and improved safety

standards. In this sense it is a movement or a set of policies aimed at regulating the products,

services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the

buyer.

To enforce the rights of people as consumers against exploitation like poor quality, over

charging, etc.

To ensure fair trade practices in the society.

To ensure the avoidance of unrestricted trade practices.

To ensure co-operation between government and producers.

To create a self-help support system where consumers voluntarily form an association for

their self-protection.

To build the confidence of MNC's for investing in developing countries.

To create healthy competition among producers.

To promote consumer organisations in society like Consumer Guidance Society of India.

To build the confidence of international organisations like United Nations by passing the

Consumer Protection Act, 1986 according to their guidelines.

To introduce the consumer to remedial organisations like consumer courts, forums,

commissions, etc.

ORIGIN OF CONSUMERISM

Consumerism has weak links with the Western world, but is in fact an international phenomenon.

People purchasing goods and consuming materials in excess of their basic needs is as old as the

first civilizations. A great turn in consumerism arrived just before the Industrial Revolution. In

the nineteenth century, capitalist development and the industrial revolution were primarily

focused on the capital goods sector and industrial infrastructure (i.e., mining, steel, oil,

transportation networks, communications networks, industrial cities, financial centers, etc.).

At that time, agricultural commodities, essential consumer goods, and commercial activities

had developed to an extent, but not to the same extent as other sectors. Members of the working

classes worked long hours for low wages – as much as 16 hours per day, 6 days per week. Little

time or money was left for consumer activities. Further, capital goods and infrastructure were

quite durable and took a long time to be used up. Henry Ford and other leaders of industry

understood that mass production presupposed mass consumption. After observing the assembly

lines in the meat packing industry,Frederick Winslow Taylor brought his theory of scientific

management to the organization of the assembly line in other industries; this unleashed

incredible productivity and reduced the costs of all commodities produced on assembly lines.

While previously the norm had been the scarcity of resources, the Industrial Revolution created

an unusual economic situation. For the first time in history products were available in

outstanding quantities, at outstandingly low prices, being thus available to virtually everyone. So

began the era of mass consumption, the only era where the concept of consumerism is

applicable.

In the 21st century

Beginning in the 1990s, the most frequent reason given for attending college had changed to

making a lot of money, outranking reasons such as becoming an authority in a field or helping

others in difficulty. This correlates with rise of materialism, specifically the technological aspect:

the increasing prevalence of compact disc players, digital media, personal computers, and

cellular telephones.

Businesses have realized that wealthy consumers are the most attractive targets of marketing.

The upper class's tastes, lifestyles, and preferences trickle down to become the standard for all

consumers. The not so wealthy consumers can “purchase something new that will speak of their

place in the tradition of affluence”. A consumer can have the instant gratification of purchasing

an expensive item to improve social status.

Emulation is also a core component of 21st century consumerism. As a general trend, regular

consumers seek to emulate those who are above them in the social hierarchy. The poor strive to

imitate the wealthy and the wealthy imitate celebrities and other icons. The celebrity

endorsement of products can be seen as evidence of the desire of modern consumers to purchase

products partly or solely to emulate people of higher social status. This purchasing behavior may

co-exist in the mind of a consumer with an image of oneself as being an individualist.

ADVERTISING

&

CONSUMERISM

Benefits Of Advertising

Inform

Guide

Contribute to efficiency

Stimulate economic progress. Expand business & trade.

ADVERTISING CODE

Make honest claims & do not mislead the consumer.

Do not offend the generally accepted standards of public decency.

Safeguard against the excessive promotion of products which are regarded as hazardous

to society or individuals. Observe fairness in competition between different brands of the

same product.

CONSUMER GROUPS

Advocacy groups that seek to protect people from corporate abuse.

Example:- unsafe products, predatory lending, false advertising.

They operate via protests, campaigning or lobbying.

Bodies- Consumer Forum, CAG, VOICE, AIBDA, CICO.

LABELLING

As per Updated Package Commodity Rule (Jan 1, 2007)

Name & address of the manufacturer

Common & generic names of commodity in package

Name & no. of quantity of each product

Net qty. in terms of std. unit of weight of measure

Month & year of manufacturing / packing

Size / dimensions of commodity (where relevant) and MRP.

CONSUMER PROTECTION

ACT, 1986

The Consumer Protection Act was enacted in 1986. Amendments were made in 2002. The Act

applies to the whole of India except the State of Jammu and Kashmir. Consumer protection

laws designed to ensure fair trade competition and the free flow of truthful information in the

marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair

practices from gaining an advantage over competitors and may provide additional protection for

the weak and those unable to take care of themselves. Consumer Protection laws are a form of

government regulation which aim to protect the rights of consumers. For example, a government

may require businesses to disclose detailed information about products—particularly in areas

where safety or public health is an issue, such as food. Consumer protection is linked to the idea

of "consumer rights" (that consumers have various rights as consumers), and to the formation

of consumer organizations which help consumers make better choices in the marketplace.

This ACT is a milestone in the history of socio-economic legislation in the country.

The first ever legislation in India of its kind which solely aimed at the grief striken

consumers who were the victims of the unfair trade practices and sub standard services

rendered to them.

OBJECTIVES

The main objective of the act is to provide for the better protection of consumers.

The act is intended to provide simple, speedy and inexpensive redressal to the consumers'

grievances, and relief of a specific nature and award of compensation wherever

appropriate to the consumer.

It is known as Poor man’s litigation

User friendly and Cost effective tool.- Suits can be filed for both defective goods and

deficient services. Only a nominal fees has to be paid by the consumer. There is no need

to send any legal notice to opposing party. A simple letter to consumer forum would

initiate legal action. No requirement of lawyer if the consumer can represent himself.

EXTENT AND COVERAGE OF THE ACT

The salient features of the Act are summed up as under :-

The Act applies to all goods and services unless specifically exempted by the Central

Government.

 It extends to the whole of India except the State of Jammu and Kashmir.

It covers all the sectors whether private, public or cooperative.

The provisions of the Act are compensatory in nature.

The setting up of the dispute redressal machinery was only to secure and enable speedy

justice to the aggrieved consumers.

This Act envisages establishment of Consumer Protection Councils at Central and

State levels, whose main objects will be to promote and protect the rights of the

consumers.

METHODS OF CONSUMER PROTECTION

There are four main methods of protecting the interests of consumers: -

1. Business Self-regulation :

Businessmen can regulate their own behavior and actions by adopting higher ethical

standards.

Trade associations and chambers of commerce can check unfair trade practices used by

some businessmen.

2. Consumer Self-help :

Every consumer must be alert as self-help is the best help.

He should educate himself and know his rights and should not allow unscrupulous

businessmen to cheat him

3. Consumers' Associations :

Consumers should form voluntary associations.

These associations can educate and awaken consumers.

They can take organized action and put pressure on businessmen to adopt fair trade

practices.

4. Government Regulations:

The State can ensure consumer protection through legislative, executive and judicial

actions.

The laws enacted by the Government must be strictly enforced by the executive.

Government of India has enacted several laws to protect the interests and rights of

consumers.

COSTS OF CONSUMER PROTCTION

Consumer protection costs may be defined in 3 ways:-

1. Economic costs.

2. Social costs.

3. Opportunity costs.

ECONOMIC COSTS: Connected with the defending charges of regulatory agencies and cost

of manufacturing consumer safety devices. Passed on to the consumers through increased prices

of goods and services

SOCIAL COSTS: The social costs are the sum total of all costs to individuals in society,

regardless of whether the costs are paid by the person who decides whether they will be incurred.

Social costs are the sum of private and external costs.

OPPORTUNITY COSTS: Opportunity cost is the cost (sacrifice) incurred by choosing one

option over the next best alternative (which may be equally desired). Arise from the ordering of

social priorities.

CONSUMER RIGHTS RECOGNIZED IN INDIA

Consumer rights were recognized broadly in many ancient Hindu, Islamic and Christian religious

scriptures; however, no literary work formalized them into a concise set until the 1960s.

Consumer rights in India and the modern world owe their origin to the consumer revolution of

the pre-60s in the United States of America.

Under Section 6 of the Act.It enshrines the following rights of consumers:-

Right to safety :- Right to be protected against the marketing of goods and services

which are hazardous to health, life and property of the consumer. Specifically significant

in areas such as healthcare, food processing and pharmaceuticals, this right spans across

any domain that could have a serious impact on the consumers’ health or well being such

as Automobiles, Travel, Domestic Appliances, Housing etc.

Right to be informed :- Right to be provided all those information on the basis of which

consumer decides to buy goods or services about the quality, quantity, potency, purity,

standard and price of goods or services so as to protect the consumer against unfair trade

practices. This right should ideally ensure that all consumable products are labeled in a

standard manner which contains the cost, the ingredients, quantity, and instructions on

how to safely consume the product.

Right to be heard :- According to the Consumer Protection Act 1986, ‘the right to be

heard and to be assured that consumer's interests will receive due consideration at

appropriate forums’ is referred to as the right to be heard. This right is supposed to

empower Indian consumers to fearlessly voice their complaints and concerns against

products and companies to ensure their issues are handled efficiently and expeditiously.

Right to choose :- Consumer Protection Act 1986 defines this right as ‘the right to be

assured, wherever possible, to have access to a variety of goods and services at

competitive prices’. Competition, invariably, is the best regulator of a market place.

Existence of oligopolies, cartels and monopolies are counterproductive to consumerism..

Right to Seek redress :- The right ‘to seek redressal against unfair trade practices or

restrictive trade practices or unscrupulous exploitation of consumers’ is defined as the

right to redressal in the Consumer Protection Act 1986. The Indian Government has been

slightly more successful with respect to this right. Consumer courts such as District

Consumer Disputes Redressal Forums at the district level, State Consumer Disputes

Redressal Commissions and National Consumer Disputes Redressal Commissions have

been established through the consumer protection act. Each of these consumer grievance

redressal agencies has fiduciary and geographical jurisdictions to address consumer cases

between consumers and businesses.

Right to consumer education :- The right of each Indian citizen to be educated on

matters related to consumer protection and about his/her rights is the last right given by

the Consumer Protection Act 1986. This right simply ensures that the consumers in India

have access to informational programs and materials that would enable them to make

better purchasing decisions. Consumer education may mean both formal education

through school and college curriculums and also consumer awareness campaigns run by

both governmental and non governmental agencies (NGO).Consumer education refers to

educate the consumer constantly with regards to their rights.

CONSUMER RESPONSIBILITIES

1. Consumer should exercise his right.

2. Cautious consumer/ Do not buy blindly.

3. Filing complaint for the redressal of genuine grievances.

4. Consumer must be quality conscious/Do not compromise on quality.

5. Advertisements often exaggerate/Beware of false advertisement.

6. Do not forget to get Receipt and Guarantee/warrantee card.

7. Do not buy in hurry.

Relief Available To Consumers

Depending on the facts and circumstances, the Redressal Forums may give order for one or

more of the following relief :-

Removal of defects from the goods .

Replacement of the goods

Refund of the price paid.

Award of compensation for the loss or injury suffered.

Removal of defects or deficiencies in the services.

Discontinuance of unfair trade practices or restrictive trade practices.

Withdrawal of the hazardous goods from being offered to sale.

Award for adequate costs to parties.

STRUCTURE

To provide simple, speedy and inexpensive redressal of consumer grievances, the Act envisages

a three- tier quasi-judicial machinery at the National, State and District levels.

National Consumer Disputes Redressal Commission - known as "National

Commission".

Consumer Disputes Redressal Commissions - known as "State Commission".

Consumer Disputes Redressal Forums - known as "District Forum".

1. District Forums have the Jurisdiction to entertain complaints:

If the cost of goods or services and compensation asked for is up to Rs. 20 lacs.

2. State Commission has the Jurisdiction to entertain complaints:

It can hear cases involving sum exceeds Rs.20 Lacs and up to Rs.1 Crore.

The State Commission also has the jurisdiction to entertain appeal against the orders of any

District Forum within the State.

3. National Commission has jurisdiction to entertain complaints:

It has a Jurisdiction to hear complaints amounting more than Rs.1 Crore.

The National Commission besides entertaining the original complaints also has jurisdiction to

entertain appeals against the orders of any State Commission.

Restrictive trade practices

The term restrictive trade practice is used for any strategy used by producers to restrict

competition within a given market.

As per the act “it means a trade practice which tends to bring about manipulation of prices or its

conditions of delivery or to affect flow of supplies in the marketing relating to goods and

services in such a manner as to impose on the consumers unjustified costs or restriction.

Collusion resulting in the formation of a cartel is one such practice.

Other practices that fall short of the formation of a cartel but are nonetheless against the public

interest and illegal include:

(a) the setting of minimum prices

(b) agreements to share markets

(c) the refusal to supply retailers that stock the products of other competitors

(d) setting different prices for different buyers (discriminatory pricing)

(e) exchanging information.

The aim of restrictive practices is to raise prices and restrict output to the benefit of the

companies practicing them.

Unfair Trade Practices

Its means a trade practice which a trader ,for the purpose of promoting sales, use or supply of any

goods or for the provision of nay service ,adopts any unfair or deceptive practice. It includes:

(1) the practice of making any statement, whether orally or in writing or by visible representation

which-

(i) falsely represents that the goods are of a particular standard, quality, quantity,

grade ,composition, style or model;

(ii) falsely represents that the services are of a particular standard, quality or grade;

(jii) falsely represents any re-built, second-hand, renovated, reconditioned or old goods as new

goods;

(iv) represents that the goods or services have sponsorship, approval, performance,

characteristics, accessories, uses or benefits which such goods or services do not have;

(v) represents that the seller or the supplier has a sponsorship or approval or affiliation which

such seller or supplier does not have;

(vi) makes a false or misleading representation concerning the need for, or the usefulness of, any

goods or services.Its also covers:

(a) the offering of gifts, prizes or other items with the intention of not providing them as offered

or creating impression that something is being given or offered free of charge when it is fully or

partly covered by the amount charged ,in the transaction as a whole;

(b) the conduct of any contest, lottery, game of chance or skill, for the purpose of promoting,

directly or indirectly, the sale, use or supply of any product or any business interest

Procedure on Admission of Complaint

The Period of Limitation prescribed for the filing of complaints before District Forum,

the State Commission, or the National Commission is two years from the date on which

the cause of action has arisen.

On admission of a complaint, a copy of the complaint is to be referred to the opposite

party within 21 days, directing him to give his version of the case within 30 days. This

period may be extended by another 15 days.

GROWTH OF CONSUMERISM IN INDIA

Consumerism is gaining momentum in India. Consumers have formed voluntary

organizations, consumer clubs, etc. Government has enacted various legislations for protecting

the interest of consumers.

Various Legislations which directly or indirectly favour consumerism are :

• Sale of Goods Act, 1930

• Agricultural Produce (Grading and Marketing) Act, 1937

• Prevention of Food Adulteration Act, 1954.

• Essential Commodities Act, 1955.

• Essential Services Maintenance Act (ESMA), 1968.

• Monopolies and Restrictive Trade Practices (MRTP) Act, 1969.

• Standard of Weights and Measure Act, 1976..

• Consumer Protection Act 1986.

• Bureau of Indian Standards Act, 1986.

• Securities and Exchange Board of India Act, 1992.

.

MEASURES TO PROMOTE CONSUMERISM

1. Spreading of awareness and conciousness among the consumers about their rights through

consumer education.

2. Use of mass-media like newspaper, television, ratio, etc. to create moral fear among traders

indulging in unfair or restrictive trade practices e.g. T.V advertisement 'Jago Grahak Jago' has

created a lot of awareness among consumers.

3. There are about 500 consumer organizations which spread and protect the consumer's interest

in the country. Some of the main consumer organizations are:

-Consumer Guidance Society of India, Mumbai.

-Citizens Action Group, Mumbai.

-Consumers Action Forum, Kolkata, Delhi and Chennai.

4. Setting up of consumer clubs in educational institutes.

5. Opening of National consumer Helpline from landline phones and BSNL/MTNL on the toll-

free number 1800-11-4000 all over the country.

6. A website www.core.nic.in has been created for consumers' help

7. Setting up of Consumer Online Research and Empowerment (CORE) centre

8. Bureau of Indian Standards (BIS) issues certificates for those goods whose quality is properly

assessed by it.

9. Central government has introduced National Awards to encourage participation of consumer

organizations and youth in the field of consumer protection.

10. Consumers week is celebrated every year throughout the country from 15th to 21 st March.

All over the world 15th March is celebrated as Consumers Rights Day.

Consumer Groups in India

Voluntary Organization in Interest of Consumer Education (VOICE)

Consumer Care Society

Bombay Telephone Users' Association

Citizen consumer and Civic Action Group (CAG)

Grahak Sahayak

Consumer Guidance Society of India

All India Chamber of Consumers (AICOC)

Consumer Coordination Council

Akhil Bhartiya Upbhokta Congress

Consumer Unity and Trust Society

Consumer Rights Education & Awareness Trust (CREAT)

Rajkot Saher/Jilla Grahak Suraksha Mandal

Upbhokta Sanrakchhan & Kalyan Samiti

Upbhokta Margdarshan Samiti "UMAS"

A CASE ON CONSUMERISM

AND ITS IMPACT

There is not much Atul Bendre, an engineer with Indian Airlines, can do when both his children

demand the latest gizmos they get to see on television.

“My 15-year-old daughter demanded a cell phone when she passed out of school. I had to buy

one for my 12-year-old son too, otherwise he would have got a complex,” he says.

 That sums up the dilemma of parents – and the new-age marketing mantra. “Pester Power”

No wonder then that a number of children’s channels are waiting to take off in the next few

months – they’re sure to find brands eager to advertise on them. A study conducted showed that

kids influence decision-making on categories beyond those just meant for kids.

The research also showed that 6 out of 10 children pester an average of nine times even after

their parents say ‘no’ to a particular request, and that 80% of all brand purchases by parents with

teens are controlled by their children.

A growing slew of ads feature kids- : Think of the maruti ad with the sikh boy. Or the Hutch ad

with the boy and the dog.