Table of Contents
1.Consumer Protection: Sine Qua Non for Good Governance
2.Consumer Protection in India: Genesis and Recent Developments
3.Justice Delivery for Low Income Consumers
4.Keeping Pace with Technological Dynamics
5.Consumer Inclusion in Financial Services
6.Consumer as Co-Protector in Health Services
7.GST: Impact on the Consumers
8.Educating the Rural Consumer
9.Quality Assurance for the Consumer
10.Customer Satisfaction : Mantra of Banking Management
11.Invest India : An Exemplar of the New India
Consumer Protection is not a new concept. It was embedded in our ancient texts too. In India, around 2500 years ago, during the period of Kautilya, there were guidelines for the government regarding how trade should be regulated and the interest of the consumers be protected.
The Consumer Protection movement in modern India began with the Consumer Protection Act of 1986 which built in many clauses for the protection of the consumer for both purchase of goods and availing of services. The Act is since sought to be amended by the government through the Consumer Protection Bill 2018 (taken up in the winter session).
The government has also introduced various standards and measurements for checking of goods and services. Ex: ISI Mark, Hallmark for jewellery, Silkmark for Silk products and the recent Real Estate Regulatory Authority – a landmark regulatory measure for safeguarding the consumers from malpractices in the real estate sector. Other measures such as DBT, Ujjawala etc. are also intended at protecting the common man from becoming the victim of frauds as a beneficiary of the government schemes.
Consumer redressal has also been built into the Consumer Protection Act. There are various fora like the National Consumer Disputes Redressal Authority for grievance redressal.
Consumer Protection: Sine Qua Non for Good Governance
The Constitution prescribes certain Directive Principles of State Policy, which though not justiciable, are fundamental in governance of the country and it is the duty of the State to strive to promote the welfare of people by securing and protecting as effectively a social order in which justice – social, economic and political – shall form the basis in all institutions of national life. The concern in the Indian Constitution for protection and promotion of an individual’s rights, and for the dignity and welfare of the citizen makes it imperative to provide for the welfare of the individual as a consumer, a client and a customer.
It is one of the most progressive and comprehensive pieces of umbrella legislation covering all goods and services provisions of the Act are also compensatory. The Consumer Protection Act was enacted in 1986, it has since been amended thrice, in 1991, 1993 and 2002.
Under Section 6 of the Consumer Protection Act 1986, there has been an effort to empower consumers by giving them six basic rights.
- Right to Safety: Consumers reauthorized to protect themselves against the marketing of services and goods which are hazardous for life and property. If the particular service or goods is hazardous and dangerous to the life and property, consumers must be informed and instructed clearly about the mode for use of service and goods.
- Right to Information: Consumers have every right to be informed about the quality, quantity, potency, purity, standard and price of service or goods, with a view to protect the consumers against unfair trade practices. Adequate information should be provided to consumers so that they may choose exactly what fits in their budget, life-style and fashion.
- Right to choose: Consumers are authorized to get access variety of services and goods competitive prices. Moreover, fair competition must be promoted so as to provide the widest range of services or goods at the lowest and competitive price to the consumers.
- Right to be heard: This right is the crux of the Consumer Protection Act, because under this consumers are assured that if something goes wrong with the consumers, their interest will receive due care in the appropriate Consumer Forum.
- Right to Redressal: If a consumer has suffered loss or injury due to unfair trade practice or restrictive trade practice and allegations made in the complaint have been proved, the appropriate forum, where complaint has been made, will indemnify and compensate the consumer.
- Right to Education: This right informs the consumer about the practice prevalent in the market and what remedies can be availed of against them. For spreading this education, media, or school curriculum and cultural activities may be exercised as medium
The CP Act provides for exclusive three tier redressal machinery as an alternative to the civil court and other legal remedies available in the country, the Act is intended to provide simple, speedy and inexpensive redressal to the consumers’ grievance.
In January 2013, the Indian Institute of Public Administration (IIPA) released its evaluation report on the ‘Impact and effectiveness of the Consumer Protection Act’ in the country.
Saying that its effectiveness was only marginal, the report blamed it on the inability of the consumer courts to deliver justice quickly and in a cost effective manner. Pointing to the poor compensation awarded by the consumer courts as another negative factor, the report said consumers were losing faith in this redress mechanism.
The report, which evaluated the impact of the CP Act through surveys of consumer courts in ten districts of five States (Karnataka, Gujarat, Uttar Pradesh, Odisha and Tripura) besides extensive interviews with various stakeholders, including complainants, said the complicated procedures forced the consumers to engage a lawyer and this made the entire process of dispute resolution very expensive.
In an attempt to overcome some of these impediments and improve the quality of consumer justice, the Union Ministry of consumer Affairs took a number of steps, including amendments to the CP Act of 1986 in 1991, 1993 and 2002. But they did not bring about the desired results.
The Failure of the consumer courts to live up to their mandate of simple, quick and inexpensive consumer justice was not the only factor that called for an overhaul of the Consumer Protection Law in India. There were certain inherent defects in the concept of consumer protection envisaged under the Act of 1986 and this needed to be cured.
One of the biggest drawbacks of the 1986 law was the absence of a regulatory mechanism to enforce the rights given under the law and prevent their violations In other words, the predominant character of the Consumer Protection Act was to resolve consumer disputes after they had arisen and not to prevent them and protect consumers.
The salient features of the New Consumer Protection Bill :
- The establishment of an executive agency Central Consumer Protection Authority (CCPA) to promote protect and enforce the rights of consumers it will make interventions when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class action including enforcing recall, refund and return of products.
- Provisions for “product liability” action for or on account of personal injury, death, or property damage caused by or resulting from any product with basis for product liability action and the liability of a manufacturer to a claimant.
- Provision for “mediation” as an Alternate Dispute Resolution (ADR) mechanism making the process less cumbersome, simple and quicker.
- Simplifying the consumer dispute adjudication process in the consumer fora are envisaged.
- Enhancing the pecuniary jurisdiction of the consumer disputes redressal agencies, increasing minimum number of members in the consumer for a to facilitate quick disposal of complaints, power to review their own orders by the state and district commission, constitution of ‘circuit bench’ to facilitate quicker disposal of complaints, reforming the process for the appointment of the president and members of the district fore, enabling provisions for consumers to file complaints electronically and file complaints in the consumer fora that have jurisdiction over the place of residence of the complainant, and deemed admissibility of complaints if the question of admissibility is not decided within the specified period of 21 days.
- Penalising of celebrity and endorsements for false and misleading ads:
- Declaring of unfair terms of a contract as null and void.
Efforts by the Government:
- Consumer Education is a way to balance the power between producers and consumer. Government has been conducting a countrywide multimedia awareness campaign educating consumers on various issues related to consumer right and responsibilities across diverse subjects. “Jago Grahak Jago” has today become a household maxim.
- Joint publicity campaigns have been launched in partnership with the related Government Departments/Organizations that serve with a mass consumer clientele. For instance, on foods, with the Foods Safety & Standard Standards Authority of India (FSSAI); on financial services with the Reserve Bank of India (RBI); and on medicines with the National Pharmaceutical Pricing Authority (NPPA) through various electronic and print media such as Television, Radio, Newspapers and outdoor advertising The consumer awareness campaign is implemented through the Directorate of Audio and visual Publicity (DAVP).
- The Consumer Protection Bill, 2015 and the newly enacted Bureau of Indian Standards Act, 2016 are efforts to provide for up gradation.
- Government of India has set up a National Consumer Helpline (NCH), with a toll free number which provides advice, information to empower consumers and persuade business to reorient their policy and management systems to address consumer concerns and grievances adopting global standards.
- INGRAM: An Integrated Grievance Redressal Mechanism (INGRAM) portal was launched for bringing all stakeholders such as consumers. Central and State Government Agencies, private companies, regulator Ombudsmen and cell centres etc., on to a single platform. The portal helps in creating awareness among consumers to protect their right and inform them of their responsibilities.
- State Consumer Helplines: State Consumer Helplines have been set up by State (provincial) Government with the objective to encourage Alternate Consumer Disputes Redressal mechanism at State level.
- Smart Consumer Application: A mobile application “Smart Consumer” to enable the consumer to scan the bar code of the product and get all details of the product such as name of the product, details of manufacturer, year and month of manufacture, net content and consumer care details for making a compliant in case of any defect.
- GAME: In its endeavour to address the problem of misleading advertisements, the Government has launched a portal called “Grievances against Misleading Advertisements (GAMA)”
- Online Dispute Resolution: An Online Consumer Mediation Centre, established at the National Law School of India University, Bengaluru under the aegis of Ministry of Consumer Affairs, Government of India aims to provide for a state-of-the-art infrastructure for resolving consumer disputes both through physical as well as online mediation through its platform.
- Online Consumers Communities: In association with the Local Circles, a social media platform, the Government has launched a platform ‘Online Consumers Communities’ for citizens to discuss and opine about governance and daily life issues.
- Campaign on Internet Safety: Government in association with a Partner Company has initiated a year-long campaign organizing’ Digital Literacy, Safety and Security’ workshops to educate users about the challenges of internet safety and security
- With a view to provide a coherent scheme and uniform standards of Weights & Measures, the first Act namely Standards of Weight & Measurement Act 1956 was enacted.
Weight and Measurement Act 1956:
Weight & Measurement Act 1956 was enacted based on metric system and international system of units recognized by International Organization of Legal Metrology. With the view to establish the standards of Weights & Measures, regulate trade and commerce in Weights & Measures and other goods which are sold or distributed by weight, measure or number and for matter connected therewith or incidental thereto, the Legal Metrology Act, 2009 was enforce on 01-04-2011. The Legal Metrology Act, 2009 (Act 1 of 2010) repeals and replaces the Standard of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
The responsibility in relation to legal metrology is shared between the Centre and the State. Matters of national policy and other related functions such as, uniform laws on weights and measure, technical regulations, training, precision laboratory facilities and implementation of the International Recommendation are the concern of the Central Government. The State Governments and Union Territory Administration are responsible for the day to day enforcement of the laws.
Legal standards of weights and measures of the States and Union Territories are calibrated in the seven Regional Reference Standard Laboratories (RRSL) located at Ahmedabad, Bhubaneswar, Bangalore, Faridabad, Guwahati, Nagpur and Varanasi.
Shortfalls in achieving Consumer Welfare:
- Although implementation of the Consumer Protection Act can be viewed as a success, there are still serious shortfalls in achieving the desired level of consumer welfare because of various factors such as deficiencies in quality infrastructure, regulatory deficit in many products and services which impact products and services which impact health, safety and environment and lack of mandatory standards for many products.
- There is also indifference among many businesses towards standardization in general, and lack of awareness among them about the impact of standards on quality competitiveness, and profitability.
- There is absence of consumer demand for quality goods and services primarily because of lack of awareness among them; there is absence of a quality culture in the country. The recently amended BIS Act and a comprehensive amendment to the existing Consumer Protection Act, 1986, introducing a new Act is currently under consideration making the Act more effective, functional and purposeful.
Consumer protection is also linked to Competition Policy as both intend ultimately to promote consumer welfare the proper and effective implementation of the laws, dealing with the protection of the Consumers’ rights would promote the cause and concern of good governance.
Business should see improved consumer education not as a threat but as a source of commercial benefit. Consumers make better choices and because of their higher expectations. Additionally, there is a positive effect on competitiveness as companies improve their products and service.
Consumer Protection movement to be effective and meaningful needs the proactive support of the government, business organisation of Civil Society, Educational Institutions – Schools, Colleges, Universities and Research Institutions. Over and above, the support of every individual is sine qua non for Consumer movement to be purposeful.
Consumer Protection in India: Genesis and Recent Developments
Consumer protection owes its origin to the USA. In the early 1960’s when consumers were unhappy with business firms because of their unfair business practices, Ralph Nader, a young advocate, championed the cause of consumers against the manufacturers and traders. President John F. Kennedy, on March 15, 1962, in a message to the U.S. Congress (Parliament), proclaimed that the consumer had four basic rights: (1) the right to safety; (2) the right to be informed; (3) the right to choose; and (4) the right to be heard. On April 16, 1985, UN General Assembly adopted of guidelines for consumer protection and the Secretary-General of the UN was requested to persuade member countries to adopt these guidelines through policy changes or law in order to promote consumer protection. Consumer protection laws have since been enacted in almost all countries of the world.
The term ‘consumer’ has been comprehensively defined in the Consumer Protection Act 1986. Any person buying a product or agreeing to buy a product, for personal or household consumption (and not for resale or commercial purpose) for consideration is referred to as a consumer. The term ‘consumer’ also includes a person who hires or avails service for non-commercial purpose and for a consideration.
A person can file a complaint on any one of the following grounds:
- An Unfair Trade Practice (UTP) or Restrictive Trade Practice (RTP) adopted by any trader or service provider
- Any defect in the goods sold
- Any deficiency in the service provided
- Charging of price in excess of the price fixed under law, displayed on the package, or on the price list, or agreed between the buyer and the seller, and
- Offering of any hazardous goods or service.
The forums where a complaint can be filed are:
- The District Forum concerned, if the claim is up to Rs 20 lakhs
- The State Commission concerned, if the claim exceeds Rs 20 lakhs but does not exceed Rs one crore
- The National Commission, if the claim exceeds Rs one crore
These forums are quasi-judicial bodies, consisting of judicial as well as non-judicial members and headed by a person from the legal background, often called consumer courts. They act like tribunals.
A written complaint can be filed by the complainant or any person authorised by him, along with the supporting documents. There is no need of engaging any advocate
After completion of the hearing, the consumer forum can issue on or more of the following directions:
- Removal of defect from the goods sold and deficiency from the service provided
- Replacement of defective goods
- Refund of the price paid
- Payment of compensation for the loss or injury suffered by the consumer
- Payment of punitive damages, wherever appropriate
- ‘Cease and desist’ order against the UTP or RTP adopted by the trader
- Withdrawal of hazardous goods from sale
- ‘Cease and desist’ order against manufacturing/offering of hazardous good/service
- Payment of compensation to unidentifiable persons
- Issue of corrective advertisement to neutralise the effect of a misleading advertisement
- Payment of costs to either party
In order to remove shortcomings and to enlarge the ambit and scope of the 1986 Act, a fresh bill, namely the Consumer Protection Bill, 2015 was introduced in the Lok Sabha on August 10, 2015, It is intended to repeal and replace the old act with a new one. The Bill was referred to the Parliamentary Standing Committee of the Ministry of Food, Consumer Affairs and Public Distribution, which recommended certain amendments to the Bill.
Justice Delivery for Low-Income Consumers
The United Nations Guidelines for Consumer Protection (UNGCP) recently revised by the General Assembly have called upon the Member States to formulate consumer protection policies aimed at fair, affordable and speedy consumer dispute redressal. The adoption of these Guidelines has set into motion a process of introspection, to have a look at the existing methodology and to evolve ways and means to implement an alternative mechanism to provide access to a justice delivery system to consumers, having system to consumers, having very low financial stakes, and situated in far-flung areas of the country.
Alternative Dispute Resolution (ADR):
The term Alternative Dispute Resolution (ADR) as referred in the revised United Nations Guidelines, basically involves settlement of disputes outside the court by adopting means like arbitration, conciliation, medication, judicial settlement etc. In India, a well-defined statutory mechanism has already been laid down for the ADR in the shape of section 89 of the Code of Civil Procedure and the Legal Services Authorities Act, 1987
In the Code of Civil Procedure 1908 (Act 5 of 1908) Section 89 was inserted by the amendment Act 46 of 1999, following the recommendations of the Malimath Committee.
Cases normally suitable for ADR Process:
All Consumer Disputes including disputes where a trader supplier/ manufacturer/ service provider is keen to maintain his business/professional reputation and credibility or product popularity”.
The Hon’ble Supreme Court recently passed a judgment on 30.08.2017 in “Bijoy Sinha Roy (d) by LR. Vs. Biswanath Das & Ors” which was a case of medical negligence finalized after litigation of 23 years.
Keeping Pace with Technological Dynamics
Today, over 40 per cent of the world’s population uses internet and with the current continued focus on access and inclusion, this is bound to increase. Hitherto, for mass acceptance of products and services, consumers trust in the digital economy is obligatory which unfortunately in some aspects it is either lacking or hardly encouraging.
Understanding consumer worries and expectations about the digital medium and striving to find ways to build trust, is by itself a big challenge for policy-makers. The most important point to note here is that a consumer’s voluntary participation alone will lead to a flourishing innovative digital technology regime, thereby making the next stage of digital development work, better than ever before.
Consumer Perceptions and Reality
- Technology falls short on authenticity, transparency, protecting consumer data with most consumers convinced that commercial brands with access to their personal data will only use it unethically with the remaining majority not even aware of what information companies hold about them.
- Addressing consumer concerns by regular review and re-evaluation of the scope of personal data collection, its need, invasive marketing discriminatory practices, privacy loss and exposure to an individual’s security risks are also essential.
- In a digital economy, we may not be able to avoid data transmissions. However, it is vital that consumers exert control over personal data flows and privacy preferences it is the regulator’s onus, to note the impact of multiple organisations collecting data of citizens and its effect on their legal rights. They should create appropriate frameworks, suitable to address problems that challenge automated decisions, ensuring that process are lawful and decisions centred on sensitive information, are without any discrimination to race, gender or religion.
- Policy regulations for companies should also include independent data security assessment, through timely breach notification and prompt sanctioning of benefits or immediate compensation to aggrieved consumers.
- Firms offering online transactions ought to offer strong, accountable and fair internal dispute mechanisms, without undue delays and at a reasonable cost.
- The digital world involves cross sectorial, across border transactions, multiple providers, etc., and regulators should work across jurisdictions, to support cross assistance to resolve disputes, enhancing consumers’ ability to compare and switch providers, support interoperable compatible devices and software standards, with rights to access and transfer data between services.
- International policy on cross border data transfer should be co-ordinated so that countries involved in transactions, have in place high standards of protection, in both substantive and procedural national laws.
- Regulators, in addition to raising awareness about online security, have to co-ordinate with companies to develop safe and secure system practices, easy for consumers to adopt.
- Upholding digital consumer protection and treating them fairly, should be the corporate culture and fundamental objective in governance of digital providers and regulatory policy legislation should be such, that companies not adhering to it or practising adverse methods that harm vulnerable consumers be severely penalised. It is important to note that evidence-based and outcome-focused interventions and solutions are necessary, as they have better impact on consumer satisfaction a regulatory mechanism-keeping pace with the pervasive nature of any technology change, that also make sure that consumers are clear on their ownership and guaranteeing rights to fair use, due process and proportionality are essential elements, in building trust and confidence among consumers.
- It is important to note that evidence based and outcome focused interventions and solutions are necessary, as they have better impact on consumer satisfaction.
- A regulatory mechanism keeping pace with the pervasive nature of any technology change, that also makes sure that the consumers are clear on their ownership and guaranteeing right to fair use, due process and proportionality are essential elements in building trust and confidence among customers.
Right to Choose
Consumer confidence and trust in the digital system are pivotal to deliver socio-economic benefits for consumer citizens.
Consumer laws and regulations just like technology, should keep pace with the technological dynamics, we witness. It is critical that Government, global industries, local small businesses, international groups, civil society and people as consumers and citizens, commit to work jointly, to attain the best possible practices and offerings, enhance and build on it to create a trusted and safe digital world that upholds consumers rights foremost.
- India is one of the first few countries to legislate Consumer Protection Act in 1986, just one year adoption of UN Guidelines.
- We have enacted the Real Estate Regulatory Act for the protection of home buyers.
- Consumers are also being made aware through the “Jago Grahak Jago” campaign
- Bhartiya Jan Aushadhi Pariyojna has been to provide affordable medicines to the poor. More than 500 medicines have been included in the list of essential drugs and their prices have been reduced recently, prices of knee implants have also been brought under control.
- Ujala is another example of monetary saving in Consumer Interest. The scheme alone has caused saving of more than Rs 20 thousand crores for consumers by reading the cost of LED bulb and through reduction in electricity bills
Consumer Inclusion in Financial Services
The UN Guidelines of 2015 contains for the first time a section on financial services, providing recommendations on fair treatment and proper disclosure, responsible lending, appropriate controls to fight abuses and fraud and transparency. This also recommends that measures should be adopted to reinforce and integrate consumer policies concerning Financial Inclusion, Financial Education and Protection of Consumers in accessing and using financial services.
The financial services sector is more complex there are many complexities exposing the consumer.
“Financial Services show the poor ways out of poverty and of leading better lives. To the wealthy, Financial Services offer opportunities to make money grow”. It depends upon good management and consumer protection with speedy redressal of grievances.
Question: There is a need for a separate consumer law for financial service. Comment.
Consumer as Co-Protector in Health Services
The ‘information asymmetry’ can affect seller and consumer alike and poses a risk of ‘market failure’. Since economy and a functioning market is of interest to all modern societies, in all levels (Local, State and Union), the Government takes up responsibilities for establishing and implementing mechanisms for both business and consumer protection’.
Health Services and Consumer Protection
The Judgements have made a distinction between a “contract of service” and a “contract for services” under consumer protection acts and included services under medical profession as ‘contract for services’.
The different characteristics of health sector and services, from other sectors, need to be acknowledged in this discussion. A major difference is that a clear distinction between producer of services and consumer may not always be possible. People are not the external beneficiaries of health services or consumer only and in an extended view, they are the ‘co-producer’ of health services as well there are a news other provisions and mechanisms, which directly and indirectly can be considered as tools for consumer protection. The provision of health services by government is considered an approach to ensure that the services are available at affordable cost.
Regulation of prices of products and services in health sector are other mechanisms to keep services within affordable limits. Standardization of products ensures that services meet minimum standards.
In health insurance, the issues of ‘information asymmetry’ adverse selection’ ‘cream skimming’ and moral hazards’ comes in and the governments have to intervene to ensure that the insurance companies do not exclude people who are in the maximum need of insurance i.e., This situation demands for regulatory mechanisms as well as consumer awareness.
Consumer protection in any setting cannot rely solely upon legislative measures and single tool approach. Regulatory approaches are useful but sub-optimal enforcement and implementation limits the effectiveness. This case for supplementary mechanisms becomes stronger in the backdrop of the debate on whether those who receive free medical care from private charitable or government hospital – can claim rights as ‘consumers’ under the Consumer Protection Act, 986 or not. Some of the measures to support patients and protect consumers in health services in India are as follows.
- The Clinical Establishment (Registration and Regulation) Act, 2010: The act aims to ensure that all clinical establishment meet basic minimum standards, the act also aims to protect consumers in healthcare from unscrupulous providers.
- State Specific Regulations on Clinical Establishments: These Acts and rules ensure quality of health services and protect consumers in health services.
- The Drug (Price Control) Order) (DPCO), 2013: The Drug Price Control Order of 1995 has provision for government regulating the price of essential medicines and drugs. This is highly relevant in the Indian context as the cost of medicines contributes two third of total cost paid out of pocket by patients/people
In the last few years, the attention on prescription of generic names of drugs by providers is also seen as an approach for consumer protection.
While India has made a stride, there is a long way to go for protecting consumers in all sectors. There are a few steps which could be considered, specifically for health sector and services
Adopting a Broader and Holistic Approach:
- Making consumers aware of their rights, giving due considerations to the complexities of health services and related outcomes
- Making consumers aware of their duties.
- Component of ‘health education’ has to be an integral part of the process. In other words, an appropriate blend of ‘consumer awareness’ health education’ and ‘health literacy’ can lead to consumer protection in health sector as well as better/improved health outcomes in India.
GST Impact on the Consumers
The main aim of GST implementation was One Nation One Tax and One Market which has been welcomed by a section of domestic and wide range of foreign investors. GST has replaced a dozen of central and state levies such as excise. VAT and service tax impact of GST on several industries is as follows.
Combining Central (CGST) and state (SGST) taxes in the new tax regime means enterprises with annual turnover of Rs 20 lakh or above (10 lakhs in some specific states) will have to follow all the GST provisions.
The new GST rule will adversely influence the SMEs working capital under the previous tax regime; the exemption limit for SMEs was Rs 5 lakhs, whereas in the new tax regime the exemption limit is enhanced to Rs 20 lakhs (10 lakhs in some specific states) which have a positive impact.
Ease of doing business removes cascading effect (double taxation), reduces the tax burden on new businesses, improves logistics and faster delivery of services are some of the positive points of the newly implemented Goods and Services Tax (GST)
Impact on Automobile Sector
The automobile sector is one of the major beneficiaries of the GST because several central and states levies such as road tax, excise, sales tax, VAT; motor vehicle tax and registration duty have all been eliminated as GST has subsumed all of them with a single uniform tax.
Educating the Rural Consumers
Rural consumers’ income levels are on the rise, enabling more of them to buy products and services that improve the quality of their lives. The monthly per capita spending among rural consumers has increased 17 per cent between FY10 and FY12, higher than the 12 per cent rise among urban consumers.
Rural markers are full of sub-standard good and duplicity of branded goods is another major problem in rural area.The expansion of service sector has added to the problem.
Services like insurance, banking electricity, medical have expanded in the rural areas without any checks and balances and the rural consumers continue to be exploited by the service providers. It is common to find that farmers are supplied defective seeds, adulterated pesticides and other commodities. The expansion of mass media has further given impetus to consumerism in the rural areas.
Framework for Consumer Education in Rural Areas
An Educated and aware person is an empowered, consumer. The rural consumers to be educated about their rights and adequate steps are taken to ensure that they get the value for their money as consumers.
Misleading Advertisements and Role of Media
The media has a greater responsibility towards the vulnerable sections of the society including the rural consumer. Rural consumers today have access to diverse media with the advent of modern technology; Advertising is one of the major sources of information about newly introduced products.
In most rural areas, there is considerable awareness about latest products that are available in the market. This has been possible due to the penetration of cable and satellite channels.
There are no effective sanctions against misleading advertisements. It needs to be emphasized that the poor, uneducated consumers in the rural areas are most likely to be harmed.
- Jago Grahak Jago has been an important medium to communicate with the consumers. However, to communicate effectively with the rural audiences, the content needs to be improved and filtered further. It is important to understand the aspirations, fears and hopes of rural consumers. Although the reach of television in rural India is high, frequent power cuts restrict viewing time considerably, however rural India has high ownership of transistor radios and these can be expected to become a popular medium for reaching the rural masses.
- A television channel for farmers, DD Kisan, which would provide information about best agricultural practices and related content, to mark the completion of the government’s first year in office had been launched in May 2015. The DD Kisan channel mandate is to keep an eye on and inform farmers about the changes in weather, global markets etc., so they can plan ahead and take the right decisions well in time.
In 1986, the Central government has amended the Prevention of Food Adulteration Act and authorised every citizen to become a food inspector and participate in the task of food safety. But it failed to implement much-needed citizen capacity building measures. So consumers continued to be at the mercy of the food regulator. According to the Food Safety & Standards Authority of India, daily use foodstuffs that are most prone to adulteration and contamination include milk products pulses like arhar and rajma, mustard oil, groundnut oil, poultry and meat, and fruits and vegetables. Adulteration is rampart in products sold loose. Even the word adulteration is not to be found in the Food Safety and Standards Act. The Act talks about safe foods, sub-standard and unsafe foods one can simply pay a fine and get off the hook unless the product is deemed unsafe.
Creating awareness through Internet & IT
The Cabinet has approved ‘Pradhan Mantri Gramin Digital Saksharta Abhiyan’ or PMGDISHA to make six crore rural households digitally literate.
Digital literacy and reliable access to the internet are the sides of the Digital India coin. Achieving both would be essential for success.
In August 2014, the Indian government had launched the National Digital Literacy Mission (NDLM) under the Department of Electronics and Information Technology, which was moved from Ministry of Communications and Information and Technology in 2016 and converted to a new ministry, MeitY. The implementation is through partners such as National Association of Software and Services Companies (NASSCOM), Intel and HP.
Training is provided free of charge to individuals below the poverty line. Scheduled castes and scheduled tribes. While a nominal fee is charged for the rest. The objective is to make one person from every family digitally literate. The initial target has already been achieved according to the NDLM website.
The Welfare of the consumers lies in the fulfilment of their legitimate expectation with regards to the goods they purchases and the services they avail.
Quality Assurance for the Consumer
With the economy and industry growing by leaps and bounds, the Indian Standards Institution was rechristened as the Bureau of Indian Standards, in 1987, through the BIS Act 1986.
BIS, while ensuring the above, developed a mechanism to assure optimal quality for consumers through its various activates listed below:
- Standards Formulation
- Product Certification Scheme
- Compulsory Registration Scheme
- Foreign manufacturers Certification Scheme
- Hall Marking Scheme
- Laboratory Services
- Laboratory Recognition Scheme
- Sale of Indian Standards
- Consumer Affairs Activities
- Training Services, National and International level
- Information Services
The Conformity Assessment for the product is operated through the following Schemes:
- The Product Certification Scheme of BIS aims at providing Third Party Guarantee of quality, safety and reliability of products to the customer. Presence of ISI certification mark, known as Standard Mark, on a product is an assurance of conformity to the specifications.
- Hallmarking is the accurate determination and official recording of the proportionate content of precious metal in precious metal articles. In India, at present two precious metals namely gold and silver have been brought under the purview of Hallmarking.
- The Ministry of Electronics and Information Technology (meitY) has notified through the Electronics and Information Technology Goods (Requirement for Compulsory Registration) Order, over 30 electronic items for their safety requirements. Bureau of Indian Standards (BIS) is operating Compulsory Registration Scheme (CRS) for the above Electronics and IT Goods.
BIS has also developed a consumer-friendly Mobile application called CARE, available on the BIS website/Google Play store, which can be downloaded on a smartphone having Android or IOS platform. This application can be used to access the information and lodge a complaint against in ISI Marked product Hallmarked item.
Hall marking Regulations under the News BIS Act 2016
That Department of Consumer Affairs is working on bringing Hallmarking regulations under the new BIS Act 2016.
A pre standardization report regarding Unified, Secure & Resilient ICT Backbone for Smart Cities also released. National Standards make the smart cities work safely and smoothly. Besides, it provides important guidance for all aspects of city life including energy-efficient buildings, intelligent transportation, and improved waste management, thereby builds sustainable communities.
Customer Satisfaction: Mantra of Banking Management
The basic rights of the customers of the banks are regulated by the Reserve Bank of India. It spells out the right of the customer and also the responsibilities of the bank. The rules applies to all products and services offered by the bank. The RBI framed a Charter of Customer Rights specifying five basic rights that bank customers enjoy.
Customer has wide choice of different forums to put his grievances for suitable redressal starting from bank’s own controlling office to Banking Ombudsman at RBI.
Various Rights of the Customer
- Right to fair treatment
Both the customer and the financial services provider have a right to be treated with courtesy. This right prohibits banks from discriminating against customers on grounds of gender, age, religion, caste and physical ability while offering products and services. Banks can, however, continue to offer differential rates of interest or products to customers.
In pursuance of the above right, the bank shall
- Promote a fair and equitable relationship between the bank and the customer.
- Ensure that staff members attend to customers and their business promptly and courteously.
- Treat all customers fairly without any discrimination.
- Ensure that the products and services offered are in accordance with relevant laws and regulations.
- Right to Transparency, Fair and Honest Dealing
It is expected that the language in bank documents will be simplified and transparent. The customer should not be subject to unfair business or marketing practices, coercive contractual terms or misleading representations.
In pursuance of the above right, the bank shall
- Ensure that the bank’s dealings with the customer rest on ethical principles of equity, integrity and transparency.
- Provide customers with clear information about its products and services.
- Make known the key risks associated with the product as well as any features that may especially be of disadvantage to the customer.
- Right to Suitability
Sometime lured by higher commissions, sales officials tend to push produces without ascertaining the suitability for the customer.
In pursuance of the above right, the bank must:
- Ensure that it is board approved policy for assessing the suitability of products for customers sale.
- Sell third-party products only if it is authorized to do so.
- Not compel a customer to subscribe to any third party product.
- Right to Privacy
Customer’s personal information should be kept confidential unless they have offered specific consent to the financial services provider or such information is required to be provided under the law or it is provided for a mandated business purpose to credit information.
- Right to Grievance Redressal and Compensation
The customer has right to hold the financial services provider accountable for the products offered and to have a clear and easy way to have any valid grievances redressal. The policy must lay out the rights and duties of the customer when such events occur. The banks will no longer be able to wash their hands off the responsibility once the product is sold
Besides these, the bank will also:
- Place in the public domain the grievances redressal procedure available for the customer and the rules of compensation to the customer for any mistakes.
- Make grievance redressal mechanism easily accessible to customers
- Advise the customer on how to make a complaint.
- Inform the complainant of the option to escalate his complaint to the Banking Ombudsman if the complaint is not redressed within the pre-set time.
- Acknowledge all formal complaints including complaints lodged through electronic means within three working days and work to resolve it within a reasonable period not exceeding 30 days.
A customer is the king in any services industry; Effective complaint management is a top priority and is viewed by regulators as a key element of a strong Compliance Management Programme. Customer right and relevant Complaints create scope for business gain for the organization the employees and the products and services. Winning customer’s engagement is the mantra of Bank management
Invest India: An Exemplar of the New India
Invest India was conceived as a proactive agency which would provide professional support and hand-holding services to potential investors from overseas so as to make it easier for them to
- a) Understand and analyse the business case for a potential investment decision
- b) Facilitate, support and fasten the journey from an investment decision to an operating business.
China has become the factory of the world on the basis of FDI. India with comparable potential had to yet make the transition.
In 2015, the new government decided to make ‘Invest India’ into the Prime Minister’s vision of making India the most attractive destination for FDI and of converting the red tape into a red carpet for investors. Thus, beginning the Invest India is a unique story of entrepreneurship within the government.
Under the leadership of a new CEO, Deepak Bagla, a seasoned investment banker and private equity professional, a team of ‘Believers in India’ started to take shape under the umbrella of Invest India with an average age of 29 years, the 110-member team at Invest India has professionals from private sector including many ex-investment bankers and ex-management consultants from prestigious employers such as Gold man Sachs. McKinsey Bain and Company each Investment Promotion and Facilitation Agency of India acts as the first point of reference for investors in India.
Invest India is transforming the country’s investment climate by working systematically with concerned stakeholders in simplifying the business environment investors. It continues to shrink the time taken from the approval of India entry by the global Board of an investor to the commercial production in India.
Recently, Invest India achieved the record of answering 100,000 queries from investors. Invest India currently facilitates total investments of over $80 billion, covering over 300 cases and with a potential to employ over 7 lac individuals. The top five sectors in this pipeline are construction and infrastructure, automobiles, renewable energy, healthcare and retail.
Given the critical role home entrepreneurs play in furthering the innovation ecosystem of the country and in employment generation, Start-up India initiative was started by the government under the aegis of Invest India.
Objective studies such as the World Bank’s ease of doing business rankings, in which India has shown the highest jump by any large major economy this year – from 130 to 100, have further validated the belief in India. These ground-level changes in the business climate have a multiplier effect on the investment and the economy. For instance, Financial Time’s FDI Intelligence ranks India as number-1 recipient of Greenfield FDI in the World. This illustrates the long-term confidence of investors and highlights their belief to profitably execute projects in India from scratch.
For Team Invest India this is just the beginning as it works to make India one of the most investor-friendly countries and the largest recipient of FDI in the next few years.