The consumer movement exercises a considerable influence on the socio-economic environment of business. In a country like India where there is a high percentage of illiteracy among people, where people are less informed and where critical goods are always in short supply, the Government has a significant role in safeguarding the interests of consumers by promoting a climate of fair competition and preventing exploitation of consumers.
The consumer movement has changed it and sellers feel now it is a question of seller beware. The objective of the consumer movement is to secure the interests of the consumer against all types of unfair trade practices. Consumerism as an effective and organised movement started in 1960s in the USA. Ralph Nader has lifted consumerism into a major social force.
Consumerism may be defined as a social force within the environment designed to aid and protect the consumers by exerting legal, moral and economic pressures on business and government.
The consumer movement highlights the following four fundamental rights of consumers.
1. Right to Safety:
To be protected against the marketing of goods which are hazardous to health or life?
2. Right to be informed:
To be protected against fraudulent, deceitful or grossly misleading information, advertising, labelling or other practices and to be given the facts needed to make an informed choice.
3. Right to Choose:
To be assured access to a variety of products and services at competitive prices and in those industries in which Government regulations are substituted, to be assured satisfactory quality and service at fair price.
4. Right to be Heard:
To be assured that consumer interests will receive full and sympathetic consideration in the formulation of Government policy and fair and expeditious treatment in its administrative tribunals.
The following features of consumer movement are noteworthy:
1. It is basically a protest movement.
2. It is a mass movement in the sense that masses are the general body of consumers.
3. It is generally a non-official movement. Public and voluntary consumers, organisations initiate the movement.
4. Though it is not a government-sponsored movement, it is recognised and backed up by the Government.
In a laissez-faire society, consumer was a king and he was free to choose. But the consumer sovereignty is a myth and the supposed benefit to the consumer accruing from perfect competition has not been realised.
The actual world is a world of imperfect or monopolistic competition and the consumer has only a limited amount of freedom in making purchase choices. When the consumer will be able to assert himself, ‘the take it or leave it’ nature of transactions in the Indian market will end.
As the manufacturer has the free choice to produce and sell his goods so the consumer should have the free choice to select from the range of products available. This is what is meant by consumer’s sovereignty in the present socioeconomic context.
Consumers as a class in our country are the only group of people who are so disorganised that they are being exploited all the time by other sectors of the economy—industry, labour and agriculture.
Indian consumer is confronted with foodstuff and goods that are adulterated, substandard and unsafe, prices that are inflated and weights and measures that perennially short-change him.
We do not agree with Prof. Samuelson when he says that business of business is business. Business is not an island in itself. It is part and parcel of society as a whole.
Hence it should be constantly alive and alert to the responsibilities to the society. Consumer protection movement is an attempt to make the businessmen aware of their social responsibilities.
Some legislative measures have already been taken by the Government to safeguard the interests of the Indian consumer. There are a wide range of enactments which operate to protect the consumer.
The Agricultural Produce (Grading and Marketing) Act, 1937 constitutes the basic law for the grading of agricultural produce. The Drugs and Cosmetics Act, 1940 regulates the import, manufacture, sale and distribution of drugs and cosmetics.
The Prevention of Food Adulteration Act, 1959 aims at preventing the sale of impure foodstuff. The Essential Commodities Act, 1955, regulates the production, supply, distribution and trade in essential commodities for the maintenance of the supplies of essential commodities and securing equitable distribution and availability at fair prices.
The Packaged Commodities (Regulation) Order, 1979, requires manufacturers to display on labels and packages the weight, contents of the product, date of manufacture, selling price and address of the manufacturer.
Some other important acts include the Display of Prices Order, 1973, the Drugs and Magic Remedies (objectionable advertisement) Act, 1954, and the Cigarettes (Regulation of Production, Supply and Distribution) Act, 1975.
Lately the Government has enacted the Consumer Protection Act, 1986. Through this Act, an attempt has been made to strengthen the institutional framework to protect the consumer at local, state and central level.
There are various institutional factors which are responsible for growing concern for the consumer protection in India. To begin with, the Government is anxious to protect the vulnerable sectors of the community through schemes like streamlining the public distribution system.
Owing to inflation, different anti-social elements have appeared in the market place for exploiting the poor consumers through unfair trade practices like adulteration, underweight, substandard products of goods in short supply.
Hence the Government has come forward to protect the consumers through the Maintenance of Internal Security Act, MRTP Act, 1969 and the Consumer Protection Act, 1986.
Secondly, the Indian traders did not bother about consumers because there had been a sellers’ market. Today the market environment for most products has changed. Now it is a buyers’ market.
Unless the consumers are protected against dishonest and unethical business practices, the long-run business interest will suffer. Now the business community is becoming aware of the social responsibility towards customers.
Thirdly, the consumers are becoming more and more conscious of their rights and legitimate demands.
The present day consumers are not ignorant of the market environment. They are conscious of customers’ rights and to protect their interest, they form organisations like Consumer Co-operative and Consumers’ Councils.
Lastly, the consumer burden imposed by the Government is on the increase. On the pretext of fiscal discipline, the tax burdens are increased every year. It has almost become a practice to announce pre-budget hike in administered prices like petro-products, railway fares and post and telegraph rates. It is quite natural that there will be consumers’ resistance to these additional burdens.
In India consumerism is still in its infancy although the consumers suffer from exaggerated advertisements, impure quality of products, underweight’s, high prices and artificial scarcity of many essential articles.
Though some consumer organisations have been set up in different parts of the country, the movement has yet to gather sufficient strength to become a living force to reckon with.
There are many hindrances to the growth of a strong consumer movement in India.
First, there is lack of leadership and management. In India, there is no Ralph Nader who can give a dynamic leadership to this movement.
Secondly, the majority of the people are illiterate. They lack consumer education and do not have the necessary consciousness to organise themselves.
Thirdly, India is a vast country and it is very difficult to have quick, effective and regular communication among different parts of the country. Different languages and different customs of different regions hamper the growth of the movement.
Fourthly, to organise the consumer movement throughout the country needs huge financial resources. Lack of financial resources is a handicap to the growth of the movement.
Lastly, the attitude of the people is not favourable to the growth of a consumer movement in India. There is a tendency among the people to look to the ‘Government for protection and assistance rather than to stand on their own legs and put up resistances.
Till recently, apart from the legal measures, the main planks for protecting consumers have been the public distribution system and consumer co-operative movement.
Public distribution system started during the Second World War and it is now in operation in the case of consumer goods. It covers food grains, sugar, kerosene and controlled cloth.
The fifth Plan proposed to expand the coverage to include pulses and edible oil. It was intended to keep prices in check and to ensure equitable distribution of scarce but basic foods. The system also helped to check hoarding and black marketing.
The public distribution system does not necessarily improve the distribution of income but it helps to prevent deterioration in distribution in inflationary conditions.
Shortages of essential goods as well as inflation can be highly regressive if a public distribution system does not prevent serious cuts in the consumption of the poor.
Though the prices of essential items such as cereals bought from the fair price shops have been lower than prices in the open market, but the quality is substandard and the quantity insufficient. The poor are often unable to buy their requirements from the fair price shops because they do not have cash in hand.
They usually go to private traders who provide credit facility even if it means actually paying a much higher price.
Since most of the unfair trade practices are due to shortage in supply, what is needed is a rapid increase in production of all varieties of consumer goods and quality, price and distribution would take care of them.
The National Consumer Protection Council under the Chairmanship of the Union Minister of Civil Supplies and Cooperation has been established to promote and develop consumer movement throughout the country.
The Council will inform itself fully about Consumers’ problems, collect and disseminate information relating to consumer matters, assist the state-governments in development of consumer movement, examine consumer grievances and initiate remedial action and promote equitable distribution of mass consumption commodities at fair prices.