Consumer Movement: Features, Issues and Trends PDF

# UNIT 8 CONSUMER MOVEMENT: FEATURES, ISSUES AND TRENDS ## Structure - 8.0 Objectives - 8.1 Introduction - 8.2 Socio-economic Factors - 8.2.1 Population Problem - 8.2.2 Unemployment - 8.2.3 Adult Illiteracy - 8.2.4 Inflation - 8.2.5 Economic Liberalization - 8.3 The Public Distr...

# UNIT 8 CONSUMER MOVEMENT: FEATURES, ISSUES AND TRENDS ## Structure - 8.0 Objectives - 8.1 Introduction - 8.2 Socio-economic Factors - 8.2.1 Population Problem - 8.2.2 Unemployment - 8.2.3 Adult Illiteracy - 8.2.4 Inflation - 8.2.5 Economic Liberalization - 8.3 The Public Distribution System (PDS) - 8.4 The Role of the State - 8.4.1 Directive Principles of State Policy - 8.5 Why the Consumer Needs Protection? - 8.5.1 The Role of Consumers/Public Opinion - 8.5.2 The Power of Consumer Boycott - 8.6 The Changing Trends in Consumer Movement - 8.6.1 The Areas of Emerging Concern - 8.6.2 Possibilities for Action - 8.6.3 Expanding Scope - 8.7 Tasks Ahead - 8.8 Let Us Sum Up - 8.9 Key Words - 8.10 Answers to Check Your Progress Exercises ## 8.0 Objectives In this unit, you will study about the various factors influencing the consumer movement in India. You will also study about the future directions in which the movement is visible, subsequent to various economic and environmental issues. The economic and social factors leading to specific problems that consumers in India have to face and the role of consumer organizations in tackling them are also identified. All this will help you to know where we stand as consumers at present and what is needed to be done in the future. ## 8.1 Introduction With a population of over 950 million spread over 3287263 sq.kms. of land, geographical divisions into 25 states and 7 union territories, over 30 languages, and hundreds of dialects, the Indian subcontinent presents a very complex and confounding picture to anyone attempting to evolve a cohesive policy in any field of social action. Nearly 40 per cent (320 ml) of the population lives below the poverty line with little or no purchasing power at all and thus, remains outside the market system. Of the remaining, the consumer class is estimated at around 500 million. The rich and the super rich account for the rest of the populace. This, in brief, is the economic profile of the Indian consumer. Till 1970, the average Indian consumer was not seriously concerned about the problem of rising prices or shortages. Statutory rationing schemes providing a certain quantum of supply of food grains and other commodities at fixed prices provided insurance against vagaries in supplies and fluctuations in prices. The money in circulation was also limited and therefore inflation was under check. However after 1972, things started looking grim. There was unexpected shortage of everything from foodgrains to toilet soaps. Adulteration was the order of the day. Consumers began to feel the need to organise themselves into pressure groups to voice their grievances. A few groups here and there emerged as spokespersons for the consumer community. These groups identified the weaknesses in the system, examined their rights and the position of the consumers in the existing legal framework. The Public Distribution System (PDS) meant to supply essential commodities to consumers in the rural and urban areas was the first area of concern and action for these consumer groups. Thus, complaint handling, grievance redressal and activising the inactive and indifferent government machinery were the items on the agenda of about 20 odd consumer organizations across the country that were functioning by 1974. Though limited, the success stories of these consumer groups which were highlighted by the media spread hopes among several others and thus, more consumer groups came into being. By 1976, there were over 60 consumer organizations in the country. By the 80s, consumer concerns were getting enlarged from problems of supply and distribution of food grains to short weights, adulteration, food safety, quality, consumer education and training, environmental issues, problems of the poor and vulnerable sections of the society. From a study of the existing laws such as the Essential Commodities Act, the Weights and Measures Act, the Prevention of Food Adulteration Act, consumer groups found that these and several other laws dealt with consumer protection only indirectly and that their primary objective was to regulate trade and industry. The groups, therefore, lobbied with the government and political parties, and used the media for focusing attention on the immediate need for comprehensive consumer protection legislation. These efforts ultimately resulted in the government coming up with the Consumer Protection Act 1986 (CPA). This has been implemented from 15th April 1987 onwards. ## 8.2 SOCIO-ECONOMIC FACTORS Our problems as consumers and the characteristics of the consumer movement are influenced by the socio-economic factors peculiar to India. India's per capita income in 1992 was 310 US dollars as against the per capita BNP of 8356 dollars of economically advanced countries. Over 62% of India's population is employed in agriculture. The problem of both rural and urban poverty complicates any solution to the enormous economic concerns of the country. Over 30 to 40% of the Indian population is estimated to be below the poverty line (although official estimates put it at around 25%); i.e., they are neither buyers nor sellers and are thus, left outside the market system. They have no access to basic necessities such as food, clothing, shelter, health care, and education. The special poverty eradication programmes of the government are directed to ameliorating this enormous problem. Consequently, considerable amount of expenditure is incurred by the government on poverty alleviation programmes, which otherwise would be available for infrastructural development. ### 8.2.1 Population Problem Indian economy faces a seemingly insurmountable problem on account of a high rate of population growth. The Indian population grew at an annual average rate of 2.2% in the period 1960-62, By 2000 AD, it is estimated that the Indian population will cross the 1 billion mark, The growth in population further aggravates the problems of poverty and unemployment. India's population at the beginning of 1996 was estimated at 930 million (93 crores). ### 8.2.2 Unemployment According to the DGE & T, Ministry of Labour, Govt. of India, at the end of 1993, there were nearly 3.70 crore persons on the live registers of employment exchanges in the country. These figures however, do not reflect the real problem of unemployment. For they do not be remple fact of unemployment in the rural areas. It is said that the total number is employed persons in the country the rural areas. It is sai on our economy. ### 8.2.3 Adult Illiteracy Another major problem we face is adult illiteracy. The total literacy rate in 1995 was 52.11% with male literacy at 63.86% and female literacy at 49.42%. Developing Consumer awareness is directly linked to the literacy factor and therefore, the consumer movement in India has to encounter a very difficult problem in bringing consume awareness among the masses. ### 8.2.4 Inflation Inflation is another economic problem that adversely affects the consumers in India. Several factors such as increased income in the hands of people, financing of government expenditure through deficit financing, increase in wages of government and private sector employees and inadequate supply of goods and services to meet the rising demand contribute to inflation and push up the prices for the consumers. Through price and distribution controls, the government has been making efforts to tackle the problem of inflation. But from the experience gained over the last four decades, it is found that these measures are not adequate to meet the desired objectives. ### 8.2.5 Economic Liberalization Under the new policy of economic liberalization, government is committed to remove price and distribution controls except in respect of a few selected commodities that are supplied through the public distribution system. Consumers are left to protect themselves against price rise in a free market economy in which multinational corporations and monopoly business houses with high market strength and full economic advantages will be dictating terms to the consumers and charging prices at their will. **Check Your Progress Exercise 1** *Note: i) Use the space given below for your answers. ii) Check your answer with the model answers given at the end of this unit.* 1) When and how did the consumer movement start in India? 2) Which socio-economic factors affect consumer behaviour and movement? ## 8.3 PUBLIC DISTRIBUTION SYSTEM (PDS) The PDS is meant to take care of the minimum nutritional requirements of the economically vulnerable sections of the society. The PDS now covers a population of around 500 million to a network of nearly 5 lakh fair price shops. Rice, wheat, sugar, kerosene oil are included in the list of items supplied to the card holders through the PDS. In some states items such as edible oils, handloom cloth, tea, iodized salt and a few other products are also supplied through the system. But the huge subsidies involved in running the PDS, estimated at Rs. 5,000 crores, and the leakages in the system have prompted the policy makers to have a re-look at the PDS and specify targeting of beneficiaries. In fact, the system now in operation is me -Targeted Public Distribution System. ## 8.4 THE ROLE OF THE STATE Article 25 of the UN Declaration of Human Rights says: "Everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing and medical care and necessary social services". Corresponding to the above, the Constitution of India provides for the right to life and liberty in Article 21, which has been expanded by the Supreme Court in several cases. In Francis Coralie Vs. Union Territory of Delhi (AIR 1981 SC 746), the apex court said "the right to life includes the right to live with human dignity and all that goes with it, namely the bare necessaries of life such as adequate nutrition, clothing and shelter....". ### 8.4.1 Directive Principles of State Policy The Constitution also provides for Directive Principles of State Policy. Although these are not enforceable by law like fundamental rights, Article 37 asserts that "the principles laid down therein are fundamental in the governance of the country and it is the duty of the state to apply these principles in making laws". Article 39 states "The state is required; in particular to direct its policy towards security, life, health and environment". It also states that the citizens, men and women equally, have the right to an adequate means of livelihood Art. 39(a); that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter vocations unsuited to their age or strength Art. 39(e). It is also provided that the level of nutrition and the standard of living are raised, public health is improved and in particular, prohibition of consumption of intoxicating drinks and use of drugs which are injurious to health, are prohibited (Art. 47). Also, that provisions are made for protection and improvement of environment and safeguarding of forests and wildlife (Art. 48A). Directive Principles also envisage that the state shall strive to promote the welfare of people by securing and protecting as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of national life Art. 38(i). That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment Art. 39(c). That free legal aid is provided to the poor and that opportunity for securing justice are not denied to any citizen by reason of economic or other disabilities (Sec. 39A). Thus, one can see that the Indian state has been enjoined by the constitution to take care of the citizens as consumers. ## 8.5 WHY THE CONSUMER NEEDS PROTECTION? Consumer protection envisages policies and actions, usually involving intervention by the government, designed to ensure that all consumers obtain goods and services of reasonable quality at fair prices. Consumer protection embraces all goods and services and the protection sought is against unscrupulous sellers or uncaring civil servants, against information regarding price and quality that may be false, biased or incomplete or the protection needed may be from laws, regulations and regulatory agencies which favour producers rather than consumers. The average consumer is not in a position to assess the quality of goods and services or the appropriateness of the price. This is because of the large variety and technological sophistication of a great number of products, incomplete or inappropriate labelling, mass advertising techniques and a general lack of understanding of market conditions and processes. Ignorance or an insufficient knowledge of products and services prevents consumers from getting value for their money. In many countries, the relevant government departments have set up consumer information and education programmes to protect consumers. The priority attached to satisfying the basic needs, such as food, housing and clothing in developing countries, overshadows the concern for consumer satisfaction. Guarantees and after-sales-service are relevant for consumer durables such as home appliances and electronic goods. Especially, because such goods are beyond the means of majority of the people in our country. The concept of 'Product Appropriate means how well is adapted to the real needs of the consumer becomes highly relevant for us. This is more so when consumption patterns originating in the developed countries is forced on consumers in developing countries by means of extensive sales promotion without due regard to the real needs of consumers here. Regulatory measures by the government are necessary to ensure that elitist consumption patterns do not emerge and spread in our economy. ### 8.5.1 The Role of Consumers/Public Opinion It is one thing to have rights enshrined in the statute books and altogether, another thing to have them enforced. A very small percentage of assertive consumers exercise their rights. Consumer legislation and improved enforcement procedures are powerful weapons in the fight for consumer justice, provided there is an informed public opinion. But how to build public opinion? Herein, lies a major problem of consumer organizations. Most people are busy, tired, ignorant, timid or apathetic about doing anything about their rights. Thus, the major task is to organise millions of economically weak and scattered consumers so that they may prevail over a minority of wealthy and strong economic interests in the society. The individual in economic terms is no match for the producer, manufacturer or trader. Therefore, the government must intervene to redress this inequality. In many countries, there is a growing realisation of the need to educate people at a young age in consumer awareness and to prepare them for the role they have to play in the economic field and social life of the country so that they can make a meaningful contribution to the improvement of living standards. The consumer movement is a unique form of social action. It requires people who are genuinely concerned with issues such as exploitation of shortages by business groups, faulty public distribution system, adulteration of food, manufacture of spurious drugs, unfair trade practices, misleading advertisements, safety of goods, public transportation, health services, false weights and measures, growing environmental pollution and poor civic amenities. To tackle these issues, consumers require information and consumer organizations require leaders with an adequate knowledge of markets. Besides, they should also be aware of the advantages and disadvantages of purchasing different products, processes, brands, the marketing and distribution system, comparative prices and product safety. Consumer activists also need knowledge of laws, various state and central government orders under the Essential Commodities Act, Prevention of Food Adulteration Act, Sale of Goods Act, Drugs and Magic Remedies Act, the Packaged Commodities Order etc. relating to consumer protection. Generally, it is found that those who have knowledge of these issues do not initiate action while those who want to act, have no knowledge. ### 8.5.2 The Power of Consumer Boycott The boycott of companies and products, the power of consumers not to buy, is the most powerful instrument. The consumer should use this power individually and collectively in a much more assertive manner to give full effect to the ideas contained herein. The lack of unity among consumers is certainly a major problem in organising consumer resistance or boycott programmes by consumer organizations. Economic inequalities, among consumers themselves is another factor. It is said that the 'Consumer is a King in the Market Place'. This statement can be true only if consumers can get together for an effective boycott of high priced goods, defective and shoddy merchandise and profiteering businessmen. Even if twenty per cent of consumers boycott highly priced products, the prices of these will crash. But in the Indian market there are consumers who will anyhow or somehow buy goods at any cost. As long as there are consumers who are willing to pay any price and acquire goods, consumer organizations will find it difficult to organise effective boycott. **Check Your Progress Exercise 2** *Note: i) Use the space given below for your answers. ii) Check your answer with the model answers given at the end of this unit.* 1) Mention the major problems faced by consumers in India. 2) What is the role of public opinion in building consumer awareness? ## 8.6 CHANGING TRENDS IN CONSUMER MOVEMENT Historically, consumer movement has focussed to a large degree on rational behaviour within the market system; often only the local market. The main aim was to educate people to obtain 'value for money' by purchasing goods based on informed choice. This approach stressed greater equality between producers/distributors and consumers at the point of purchase. This was to be ensured by promoting more rational behaviour on the part of consumers and enabling them to use available remedies against market abuses. Over a period of time the emergence of global issues such as the lack of basic needs and amenities, ecology, transnationals, human rights and Third World problems have broadened the concept of value for money to a wider conception of a basic quality of life. 'Value for People' has become an additional fundamental aim of the consumer movement. This essentially means that consumer education should enable people to develop a critical and analytical view of the real need for goods and services, consumer rights and responsibilities, and the fundamental socio-political and economic factors (both local and international) affecting the supply of products and services. In other words, consumer protection movement seeks to develop critical awareness and living skills which are oriented towards building a better future for mankind. As seen in the rise of 'Green Consumerism', consumer education is orienting societies to consume products and services based on an ethical and environmental conscience. Producers and their products are no longer merely judged on quality, durability, performance, price and after sales services. More and more consumers now evaluate products and producers based on three additional criteria; i.e., Ethics, Ecology and Equity. This implies the following: * a) Is the production ethical? Does the concerned company engage in business practices which take advantages of lenient legal, social and environmental regulations in Third World host countries. This is as compared with the strict regulations existing in the company's home country. Does the company engage in malpractices like bribery and corruption? * b) Is the production ecological-friendly? Is the production process in harmony with the environment? * c) Is the production equitable? Is it fair to the traditions and economics of local communities and vulnerable Third World societies? Business enterprises, both government and private, can be judged for their social responsibility by criteria such as: (a) respect for the environment (b) sensitivity to cultural diversity (c) public accountability through disclosure of information (d) advancement of women's rights and position (e) impact on local community based industries and (f) employment policies and a fair deal for workers including health and safety standards in the work place. Ecological or 'green' issues are particularly important and consumers should have the information to use their power of not buying products that are likely to: (a) cause significant damage to the environment due to undesirable exploitation of natural resources, (b) consume a disproportionate amount of energy during manufacture, use or disposal (c) cause unnecessary waste either because of over packing or because of an unduly short product life, (d) use material derived from threatened species or from threatened environments (e) involve the unnecessary use of or cruelty to animals, whether this be for toxicity testing or for other purposes and (f) adversely affect other countries and communities, particularly in the Third World. ### 8.6.1 Areas of Emerging Concern Several global issues have emerged in recent years that need to be considered in tandem with the consumer policy. These issues pertain to the global information revolution and its impact on financial services and the effect of the growth of advertising and mass media on information available to consumers, as well as the globalisation of manufacturing, production and distribution systems. The Department of Economic and Social Development of the United Nations Secretariat is undertaking a study on the financial services sector, with an emphasis on banking insurance and securities. Policy makers, academicians and business leaders will examine the entire balance sheet of consumer opportunities and hazards with the aim of elaborating targeted guidelines. There are, at present, three strong currents of change in retail markets for financial services, internationalization; deregulation and technological innovations. Liberalization of entry to foreign financial institutions has already occurred in the most developing countries. This is causing wholesale international takeovers, mergers, cross-share holdings. Networking agreements are increasingly common. Developing countries are faced with difficult choices and the need to find an optimal balance of national domestic savings and national domestic investment. Recently, many countries have seen the partial or complete removal of government controls over interest rates, volume of credit and pricing of financial services. Structural boundaries between different types of financial institutions are also being allowed to disappear so that all-purpose financial conglomerates are beginning to emerge. It is a challenge to ensure that the interests of individual consumers are taken into account in this shift. Technological innovations such as electronic funds transfer, telephone and computer based home banking phenomena that are largely confined to the developed world, are nevertheless affecting developing countries as well. Of possible concern to consumers in this regard are one-sided contracts, electronic services and the exposure of personal financial data. ### 8.6.2 Possibilities for Action Above mentioned issues lead to several conclusions about what is necessary for the 'Conscious Consumer' to become a significant force for economic change. First, we need more information of a kind that goes well beyond the price, quality convenience and usefulness criteria of traditional consumerism. Second, that information must be linked to possibilities for action, especially in terms of access to the products or services seen as desirable. Thirdly, if we are really serious about justice to the consumer, then there is a need for effective organisational opportunities for those who want to move beyond the impersonality of the global marketplace to engage in collective or locally-focussed activities, direct producer consumer links or the many means of humanising the exchange process. That is what the consumer cooperative movement sought to do. It is surely a dimension that needs a rediscovering today. In protecting and promoting a more sustainable and environmentally sound economic development through more responsible consumption patterns and lifestyles, consumer groups must aim at : * a) A qualitative change in the manufacture and supply of products and services in a way that will reduce environmental pollution, wastage of raw materials and utilisation of energy. * b) A quantitative change in the consumption of certain products and services, which are considered exploitative, elitist and/or a waste of resources. ### 8.6.3 Expanding Scope All consumer movements, can work towards improving "the quality of life" of citizens. It may be all right to test colour TV sets or some other household equipments but similar approaches and methods to question, test and evaluate should be applied to other areas of life such as housing and education policy, environmental issues, disposal of toxic wastes etc. The consumer movement is not for training people in the art of acquiring more and more personal possessions, but it is concerned with social, economic community responsibilities. Even more so in a system where economic and social inequalities persist to a very large extent. ## 8.7 THE TASKS AHEAD The consumer movement in India will have to address itself to the challenges posed by the process of economic liberalization and the subsequent opening up of the rural markets to high pressure advertising and merchandising by all powerful MNCs. These bodies have the skills and the wherewithal to change ageold and healthy traditional patterns of consumption overnight. Already, we see that much damage has been done to the nutritively sound food consumption habits of the rural masses by the advertising of instant foods, beverages, and junk foods. Economic liberalization may bring in a faster growth rate and an increase in the per capita income, but would perhaps not bring about a better life for the poor because of discriminatory distribution built into the system. A vibrant consumer movement can throw up these contradictions in the system and create an awareness among the well-to-do consumers so that they realise their social responsibility. Whenever the rich or the middle class consumers are spending a rupee, they are voting for a particular economic system. When the rupee is spent on foreign branded goods or goods produced with high technology, the vote is against the poor employed in the handloom and the cottage sectors. Whenever consumers are spending on luxury goods and conspicuous consumption, they are voting for exploitation of the poor and the downtrodden. It is this ultimate message that has to be conveyed by the consumer organizations in India in their programmes. **Check Your Progress Exercise 3** *Note: i) Use the space given below for your answers. ii) Check your answer with model answers given at the end of this unit.* 1) What is the meaning of “Green Consumerism ?"