Summary – Consumer Buyer Behaviour

Chapter 17
Consumer Protection in India
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Learning Objectives:
 To understand why consumers need protection
 To understand the role of the Consumer Guidance
Society of India
 To understand the advantages and limitations of
the consumer movement and the rights of consumers
 To understand business malpractices and
legislative regulations to protect consumers

17.1 INTRODUCTION
A consumer is defined as someone who
acquires goods or services for direct use or
ownership rather than for resale or use in
production and manufacturing.
Organisations exploit consumers in numerous
ways – poor quality of content, use of harmful
chemicals, incorrect weights and measures
practices, price cartel, poor packaging, mixing,
lack of information etc.
What is Consumer Protection?
Consumer protection is a group of laws and
organizations designed to ensure
the rights of consumers as well as fair trade,
competition and accurate 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. They may also provide additional
protection for those most vulnerable in the
society. Consumer protection laws are a form of

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government regulation, which aim to protect the

rights of consumers.
Other organizations that promote consumer
protection include government organizations and
self-regulating business organizations such as
consumer protection agencies and organizations,
namely The Central Consumer Protection Council, The
State Consumer Protection Councils, State Consumer
Disputes Redressal Commission (SCDRC), National
Consumer Disputes Redressal Commission (NCDRC) and
last but not the least, Consumers Guidance Society
of India.
17.2 CONSUMERS NEED PROTECTION – WHY?
During India‟s pursuit of “self-sufficiency,” the
consumer has endured use of sub-standard products
and services, adulterated foods, short weights and
measures, spurious and hazardous drugs, exorbitant
prices, black marketing and profiteering,
unfulfilled manufacture guarantees, and a host of
other problems.
Consumer protection is important for protecting
consumers and instilling confidence in different
institutions within the country.
The laws are able to guarantee safety and quality
of the products and services the consumers use.
Inexperienced consumers are more vulnerable and
need to be protected from fraudulent sellers and
unsafe products.
Consumers need to be protected from misleading
advertisements, poor services and unsafe goods.
In our country, where religious faith is misused to
exploit gullible individuals, the need is to make
the consumer more aware and protect his interest.
Consumers need protection from monopolistic and
restrictive trade practices.

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17.3 CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI)

In the 1960s exploitation of consumers by
manufacturers and service providers was rampant in
India. In order to resist the silent suffering of
consumers, an organized movement to protect
consumer rights was the need of the hour. Thus, the
birth of the Consumer Guidance Society of India
(CGSI) to resist consumer exploitation of all forms
in 1966.
Main aim was to protect the rights of consumers,
who found themselves helpless whenever they were
supplied with defective goods or services.
The efforts of CGSI and other Consumer
Organisations of our country bore fruit when the
Consumer Protection Act was enacted in the year
1986 and the Consumer Courts were set up
thereafter.
CGSI has numerous objectives and roles to develop
resources to support their movement, create
awareness and protect the rights of consumers.
Consumer awareness
Consumer awareness is about making the consumer
aware of his/her rights.
Consumer protection
Laws are designed to ensure fair trade competition
and a free flow of truthful information in the
marketplace. The laws are designed to prevent
businesses that engage in frauds or specified
unfair practices from gaining an advantage over
competitors.
Concept of consumer protection:
Consumer protection means safeguarding the interest
and rights of consumers. In other words, it refers
to the measures adopted for the protection of

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consumers from unscrupulous and unethical

malpractices by the business and to provide them a
speedy redressal of their grievances.

17.4 RIGHTS OF CONSUMERS

In order to safeguard the consumer interest, six
consumer rights were initially envisioned by
consumer rights activists, namely - Right to
Safety, Right to Information, Right to Choice,
Right to be Heard, Right to Redress, Right to
consumer education.

17.5 CONSUMER MOVEMENT

Consumer movement refers to advancing consumer
protection and can include legislators passing
consumer protection laws, regulators policing these
laws, educators who teach consumer policy, product
testers who measure the extent to which products
meet standards, cooperative organizations which
supply products and services mindfully of consumer
interest, as well as the consumer movement itself.
In India, the basic reasons for the consumer
movement have been shortage of consumer products,
inflation, adulteration, black marketing.

Thrust of consumer movement in India has been on

availability, purity and prices. Consumer movement
offers numerous advantages such as protection
against exploitation, unfair and restrictive
practices, creating self-awareness and more.

Due to various reasons, consumer movement in India

has not taken off namely low literacy, poverty, low
awareness and in-active authority.

17.6 CONSUMERISM AND CONSUMERS‟ RIGHTS &

RESPONSIBILITIES

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What is consumerism?
Consumerism is a social as well as economic order
which encourages the buying of goods and services
in ever-greater amounts. Rights of consumers were
covered in earlier section.
It is expected that consumer behaves responsibly by
getting aware, collect information, speak out,
follow ethical practices, complaint to right
authority and more.

17.7 BUSINESS MALPRATICES

Malpractice refers to Negligence or misconduct by a
n organisation in order to gain, by means of
unlawful actions, thus depriving the consumer the
full value for money paid and/or causing injury or
health issues, inconvenience, mental trauma and not
offering support when needed.

Known and most prevalent malpractices are

adulteration, lack of safety measures and quality
control, short weights and measurements, misleading
advertising, black marketing and profiteering, and
illegal trading.

17.8 LEGISLATIVE REGULATIONS

Various legislations being developed to protect
consumers are as follows;
1) Weights and Measures Act, 1958
2) The Prevention of Food Adulteration Act (PFA),
1954
Certain other related legislations are:

a) Drugs and Cosmetics Act, 1940

b) Drugs and Magic Remedies Act, 1954
c) Dangerous Drugs Act (DDA)
d) Poisons Act, 1919
e) Narcotic and Psychotropic Substances Act

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3) The Drugs and Magic Remedies (Objectionable

Advertisement) Act, 1954.

4) The Packaged Commodities Order, 1975

5) The Essential Commodities Act, 1955
6) The Monopolies and Restrictive Trade
Practices (MRTP) Act 1969
7) ISI and AGMARK: ISI Certification Mark Act, 1952
8) The Indian Sale of Goods Act, 1930
9) The Trade and Merchandise Marks Act, 1958
10) Immoral Representation of Women in
Advertising Act

Over and above these, there are several other

legislations formed to help consumers by preventing
malpractices.

Curbing of Unfair Practices

An unfair trade practice means a trade practice,
which, for the purpose of promoting any sale, use
or supply of any goods or services, adopts unfair
methods, or unfair or deceptive practices.
Unfair practices can be – False representation,
false offer of bargain price, non-compliance of
prescribed standards, hoarding and destructions.
Restrictive Trade Practices
“Restrictive trade practice” means “any trade
practice which requires a consumer to buy, hire or
avail of any goods, or as the case may be,
services, as a condition precedent for buying,
hiring or availing of other goods or services”.
Some of the Restrictive Trade Practices are cartel
(fix prices, collusive tendering, market
allocation, production or sale of quota, boycotts),
market dominance (predatory pricing, discriminatory
pricing, transfer pricing, tied selling), exclusive

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dealing, Resale price maintenance, market

concentration (mergers, acquisitions, takeovers,
joint ventures), and Interlocking directorships.

There are various limitations of Restrictive Trade

Practices such as it is difficult to establish,
consumers are exploited without being misled, PSU
exempted and more.

17.9 CONSUMER PROTECTION COUNCILS AND CONSUMER

EDUCATION
Consumer Protection Act, 1986 is an Act of
the Parliament of India enacted in 1986 to protect
the interests of consumers in India. It makes
provisions for the establishment of consumer
councils and other authorities for the settlement
of consumers' disputes and for matters connected
therewith.
Consumer Protection Councils
Consumer Protection Councils are established at the
national, state and district levels to increase
consumer awareness.
Consumer Dispute Redressal Agencies
District Consumer Disputes Redressal Forum (DCDRF):
Also known as the "District Forum" established by
the State Government in each district of the State.
The State Government may establish more than one
District Forum in a district.
Consumer Education in India
Legislation will be more useful if the common man
knows about its existence, norms, applicability,
their rights and obligations and more such aspects.
Overall it is spread at consumers‟ level,
government level and organisation level.

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Next Chapter Eighteen

„Consumer Buyer Behaviour
in Other Industries‟

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