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Consumerism in India and Related Problems

In general, the concept of consumerism is the consumer movement against the exploitation and immoral market practices. No matter whether the goods supplied in a market are abundant or of short supply, the seller is the king of the market despite the myth that the consumer is the bonafide benefactor of any market. The consumers are unorganized and ignorant in nature; the sellers’ community makes use of it and fruitfully engages in making a profit out of unfair trade practices.

The upper hand taken by the sellers and service providers over the consumer community are due to the organisation and unity among the sellers. Here comes the need for consumer organizations and organized-efforts to conduct socio-economic movements against the sellers. This is known to be consumerism. 

“Organized efforts of consumers seeking redress, restitution, and remedy for dissatisfaction they have accumulated in the acquisition of their standard of living.”

Economists Richard H. Buskirk and James. 

In accordance with the same, because of the prolonged exploitation, the government has also enacted numerous legislations to protect the interest of the buyers and to provide redressal for the grievance. One of the important Acts is the Consumer Protection Act of 1986, as far as India is concerned, the enactment of this Act is said to be a milestone of Indian consumerism. Thus, this article deals with the concept of consumerism in India with reference to the Consumer Protection Act.

Introduction

India is considered to be one of the biggest global markets. The country’s society can be divided into three main classes on an income basis; the community of people who are the main buyers of luxury products and frequently shop at the exclusive retail stores are known to be the upper class. On the other end of the spectrum, the lower class people can afford their necessities only. The middle-class people can be found in between these two poles, as they consume both necessities and luxuries only at affordable prices. Despite their range of income, all of them are vulnerable to prevailing unfair trade practices. 

The current state of affairs is that after the globalization of the goods, the unfair business practices have escalated. The principle of “caveat emptor” in general means, “Let the buyer beware”. It is an age-old principle where the onus was on the consumer to carry out due diligence before the purchase. Thus, the seller is not responsible for the purchased product even if it is damaged, defective, or did not meet the expectation of the buyer. In later days, this was used as a tool of misuse by the sellers that resulted in the evolved principle of “caveat venditor”. 

Caveat Venditor simply means “let the seller beware” which creates the liability of the seller if the sold product is found defective. Now, the buyer need not take reasonable due care before the purchase. But still, most of the Indian buyers are unaware of the existing legislations due to the apathy and lack of education. As the sellers are organized and united unlike the consumer community they remain stronger than the buyers. The requisite consumerism came into force as it aims to organize the unorganized consumers to protect their rights when they are infringed by business injustices. It is the modern movement of consumers against the selling of dangerous, adulterated, useless, and inferior products via advertising and misleading consumers through different market strategies. It also helps the consumer to be aware of their rights and raises voice against exploitation.

Definitions

  • Consumer:  someone who acquires goods or services for direct use, or ownership contradiction to the manufacturers, retailers, or wholesalers.
  • Consumer right: it is the right given to every consumer to have basic information about the purchasing goods or services like price, quantity, quality, purity, and standard, to be protected from hazardous and dangerous goods and services to free choice of goods and services, to seek redressal of their infringed rights, and the right to complete consumer education.
  • Consumerism: The consumer is the center of all market activities. The de facto king of the market is the consumer. It is the social movement with an organized-effort to protect the rights of the consumer and, if there is any infringement of their rights, then the consumer can seek remedies and remuneration for the caused injustice and unfair market practices, like, adulteration, deceptive packaging, unsafe products, false and misleading advertisements, defective warranties, fictitious prices, black marketing, short weight and measures and so on. In general, an individual, or an institution, or the government makes policies to protect consumer rights. Consumerism is the protection of the interest of the consumer.

Consumerism movements in India:

Ab initio, consumerism is the social movement intended to give voice to the voiceless consumers. “A Consumer is the most important visitor on our premises. He is not dependent on us, we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving an opportunity to serve him.” Despite these words of Mahatma Gandhi, it remained for a long time that consumers had to take responsibility while purchasing goods and services. Indeed, buyers were made to follow the rule of “caveat emptor”, where the sellers had no role to play. It was a time when the consumers were the unheard voice of India. Since Indian leaders were busy in building the democratic government of independent India, it took time to address the concept of consumerism in India.  Over time, the principle of caveat emptor was considered as inconsistent with the law of equity. Furthermore, it has evolved into “caveat venditor.” This resulted in three series and stages of consumer movements.

In 1960, several organizations such as Consumer Guidance of India were formed and indulged themselves in educating and spreading awareness among the consumers and also evident for the performance of primary goods test for daily consumption. It was known to be the first stage of consumerism in India.

The majority of Indian consumers were exploited by means of adulteration, artificial scarcity, and unreasonable commodity prices. During the period of 1970-1980, the formation of consumer organizations happened as a result of the unsatisfactory performance of the public distributive system (PDS), food adulteration, and inflation. In this second phase, the formed organizations were encountered for ventilating their community problems to the concerned officer.

The third phase of consumerism has led to the enactment of the Consumer Protection Act, 1986. It has boosted the emergence and formation of consumer organizations all over India. To prevent and protect the consumer from the exploitation, the Indian government has passed numerous Acts. Some of the notable Acts are:

  1. Drug and Cosmetic Act, 1940
  2. Prevention of Food Adulteration Act, 1954
  3. Monopolies and Restrictive Act, 1969
  4. Standard of Weights and Measures Act, 1976
  5. Consumer Protection Act, 1986

Even though the government has taken various actions to address consumerism, this concept is still in its infancy in our country.  Since the advent of e-commerce, the consumer has been deprived to a great extent. This leads to the need for replacement or reformation of the Consumer Protection Act, 1986. As it was considered redundant to address modern consumerism and to resolve the emerging disputes, the new Consumer Protection Act was passed by the Parliament in 2019, and recently it came into force in July 2020. 

The majority of Indians who come under the ambit of consumers are quite different unlike the consumers in advanced countries. As the main occupation is cultivation, three fourth of the Indian population resides in rural areas, and also a great disparity in income. The considerable rate of illiteracy and lack of uniformity among the consumer community has resulted in the increased exploitation of consumers with the attitude of profit-making taking priority over the social responsibilities of the seller. Thus, it leads to the emergence of consumerism, to safeguard the interests of the consumer and to build a defensive shield for vulnerable consumers. Consumerism in India is the outcome of the consumer’s prolonged period of suffering and exploitation.

Consumer Protection Act of 1986

Out of the various legislations that have been enforced in India in the interest of protecting consumer rights, the most important is the Consumer Protection Act of 1986. This is a landmark in the Indian consumer movement as it is applicable to the whole of India except Jammu and Kashmir, and to all goods and services. But before long when the J&K Reorganization Act was passed and implemented in 2019, the consumer protection Act was also made applicable to J&K. According to the new Consumer Protection Act, everybody, including an individual, a firm, a Hindu undivided family, a company, have the right to exercise their consumer rights for the purchase of goods and services made by them. It seeks to set up courts in each state and appoint inspectors to implement the Act. The courts thereby established have the power to punish the guilty with imprisonment and heavy penalties. It is also significant that a consumer should be aware of their rights and the courts and procedures that are to be approached or followed if their rights get infringed.

Who is a consumer of goods and services?

According to this Act, under Section 2(i)(d), a consumer for the purpose of goods means, the person who- “ buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose”. Therefore, it is obvious that the benefits of this Act can be obtained by an ordinary consumer purchasing goods for his own use rather than use it for the purpose of acquiring profits out of it. If a person is claiming himself as a consumer, then he should satisfy the followings conditions:

  1. There must be a sale of goods
  2. Purchasing of goods must be for a consideration
  3. That consideration might be paid or partly paid or partly promised or  under any system of deferred payment
  4. The person who is buying goods for resale cannot be considered as a consumer under this Act.

Consumer for the purpose of services-  [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose]; for services also the person, who avails services for any commercial purposes.

Consumer Rights under Section 6 of the Act

  • Right to safety

Under the Consumer Protection Act of 1986, it is referred to as “the right to be protected against the marketing of goods and services which are hazardous to life and property.” This right applicable to the consumer specifically on the grounds of sub-standard healthcare and pharmaceuticals, appliances made of low-quality raw materials, adulterated food products, and all other domains which are unsafe and has adverse effects on consumer’s health and well being. The consumer has this right against the caused loss and the same is guaranteed by this Act.

  • Right to be informed 

This right is granted as “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 the consumer against unfair trade practices.” In a country like India, the consumer is usually informed about the products via advertisements and by the mean of mere words. Probably, that could be unreal and there is a possibility of unfair marketing by the seller. A consumer hardly gets to know about the complete information or the precise information about the commodity’s price, quality, quantity, purity, and the standard. But, the above-mentioned information of the product and instructions to use the same safely must be labeled in a standard manner on the consumable product.

  • Right to choose

It is defined as “the right to be assured, wherever possible, access to a variety of goods and services at competitive prices”. It is the right of the consumer to choose the product which he would like to purchase. As existing monopoly and oligopoly markets are said to be counterproductive to the concept of consumerism, there should be perfect competition in a market where the buyer could get a large number of options and it will favour consumerism.

  • Right to be heard

It is stated as “the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate forums”. This right aids the consumer community of India to raise voice against the seller or the product or the company if he/she thinks that it is prejudicial to his interest. It is basically the right of the consumer to file a complaint when his rights are violated. There are consumer service cells that have been set up in many organizations to hear consumer complaints and sort out the same.

  • Right to redress

The definition is given as “the right to seek redressal against unfair trade practices or restrictive trade practices or unscrupulous exploitation of consumers.” Consumer courts like District Consumer Dispute Redressal Forum, State Consumer Dispute Redressal Forum, and National Consumer Dispute Redressal Forum have been formed by the government of India to address this right. It is the right of the consumer to claim compensation if the consumable product has caused any loss or is defective or subject to any unfair trade practices.

District Forum 

It is set up by the state government in each district. The complaint could be filed in the district forum only if the goods and services worth and the compensation claimed is less than INR 20 lakh. Any appeal against the district forum order could be filed in the state commission within 30 days.

State Commission

It is set up by the state government and its jurisdiction is restricted to the concerned state borders. The complaint could be filed here if the value of the product and compensation claimed is between INR twenty lakh and INR one crore. An appeal against the state commission order could be brought to the national forum within 30 days.

National Commission

It is established by the Central Government. One can file a complaint if the compensation claimed is more than INR one crore. An appeal against the national commission can be filed before the Supreme Court within 30 days.

  • Right to consumer education 

It is the right of every Indian citizen to be educated about the available rights under the Consumer Protection Act, 1986. This refers to both formal education in schools and colleges and educating people through awareness workshops. It could be carried out by both governmental and non-governmental organizations. It is the right of the consumer to be informed about available consumer rights which may help them to seek redressal against the loss they suffer.

What’s new in the Consumer Protection Act, 2019?

  • The rules which are applicable to direct selling have also been extended to E-commerce and the person who is involved in buying products and availing services via online platforms like e-commerce and teleshopping are also considered to be a consumer under the definition of consumer as provided in Section 2(7) of the Act.
  • The Central Consumer Protection Authority (CCPA) to be formed, and act as a regulatory body against unfair business practice. They will also enforce the consumer rights which are granted under Section 10 of the Act.
  • The consumer can seek compensation for the ‘harm’ caused by the product consumed. It is added as “product liability” under Section 83 of the Act.
  • The consumer is free to file a complaint in a consumer court where he resides or works. Earlier it was required to approach the court where the seller or service provider (the defender) is located. Now, video conferencing mode of hearing cases has also been enabled by this Act.
  • As per this Act, the pecuniary jurisdiction of district consumer forum is up to Rs 1 crore, for state commission, it is between Rs 1 crore to Rs 10 crore, and for national consumer forum, it is more than Rs 10 crore.

Conclusion

The introduction of the arena of globalization and liberalization has boosted the concept of consumerism in India. There are always two sides to the coin, even if the government is busy making policies for the welfare of the consumers, it only fruitfully helps them when the consumers are aware of their rights. Mere enactment of laws will not shield the consumer against market exploitations. It is the obligation of the government to conduct periodical awareness campaigns and regulate the enacted Acts. 

India is a county, where most of the consumers are unorganized and are not conscious or aware of the existing legislation and ignorant. Due to lack of education regarding their rights, the sellers and service providers are taking advantage of them. Indian consumerism is quite different from any other world nation as India’s consumer problems are unique. The advent of E-commerce has made this even more complicated since there is no practice of direct selling even though the new Consumer Protection Act of 2019 has included e-commerce buyers within the ambit of a consumer. The consumer can also seek compensation for the rights infringed, but it is always better to prevent loss. 

The due responsibility should be taken by the consumer while purchasing the product such as checking for the product quality, quantity, purity, ingredients added and even labeled price. Rather than depending on the government for everything consumers can voluntarily join themselves in any nongovernmental consumer organizations for their betterment. Raising voice against exploitation and unfair market practice as an organization is far better than doing the same as an individual. Further, seeking redressal and compensation for their grievances on time will aid to elevate the concept of consumerism in India to another level of modern consumerism.

Frequently Asked Questions (FAQ)

  1. What does the concept of consumerism mean?
  2. How far has consumerism aided consumers against unfair trade practices?
  3. Does India have any legislation for addressing consumer problems?
  4. What are the consumer rights granted by the Consumer Protection Act of 1986?
  5. How can a consumer seek redressal?
  6. What has changed in the Consumer Protection Act of 2019?

References

Published by Snegapriya V S

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