Consumer Awareness in Rural India - An Empirical Study

Project Directors

Prof. Suresh Misra Ms. Sapna Chadah

Project Associates

Dr. Amit Kumar Singh Virendra Nath Mishra

Sponsored by

Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution

Government of India, New Delhi

Conducted by

Centre for Consumer Studies Indian Institute of Public Administration Indraprastha Estate, New Delhi-110002

i

PrefacePrefacePrefacePreface

The welfare of the consumers lies in the fulfilment of theThe welfare of the consumers lies in the fulfilment of theThe welfare of the consumers lies in the fulfilment of theThe welfare of the consumers lies in the fulfilment of their normal and legitimate ir normal and legitimate ir normal and legitimate ir normal and legitimate

expectation with regards to the goods they purchases and the services they avail. In a expectation with regards to the goods they purchases and the services they avail. In a expectation with regards to the goods they purchases and the services they avail. In a expectation with regards to the goods they purchases and the services they avail. In a

country like India where all the consumer protection laws are in place, the consumers are country like India where all the consumer protection laws are in place, the consumers are country like India where all the consumer protection laws are in place, the consumers are country like India where all the consumer protection laws are in place, the consumers are

not really aware of them and the mechanism in place tonot really aware of them and the mechanism in place tonot really aware of them and the mechanism in place tonot really aware of them and the mechanism in place to redress their grievances. Those redress their grievances. Those redress their grievances. Those redress their grievances. Those

who know the laws know that the process is very slow and cumbersome. There are a who know the laws know that the process is very slow and cumbersome. There are a who know the laws know that the process is very slow and cumbersome. There are a who know the laws know that the process is very slow and cumbersome. There are a

number of steps taken to protect the rural consumer but without much impact due to the number of steps taken to protect the rural consumer but without much impact due to the number of steps taken to protect the rural consumer but without much impact due to the number of steps taken to protect the rural consumer but without much impact due to the

prevailing socio prevailing socio prevailing socio prevailing socio ---- economic conditions of the rural con economic conditions of the rural con economic conditions of the rural con economic conditions of the rural consumers. They generally base their sumers. They generally base their sumers. They generally base their sumers. They generally base their

purchasing decisions on the advertisement campaigns and promotional strategies purchasing decisions on the advertisement campaigns and promotional strategies purchasing decisions on the advertisement campaigns and promotional strategies purchasing decisions on the advertisement campaigns and promotional strategies

employed by the organizations and also lack choiceemployed by the organizations and also lack choiceemployed by the organizations and also lack choiceemployed by the organizations and also lack choice....

TTTThe he he he rural markets, which were earlier ignored by most of the big international rural markets, which were earlier ignored by most of the big international rural markets, which were earlier ignored by most of the big international rural markets, which were earlier ignored by most of the big international

market playmarket playmarket playmarket players, are now being seen as a land of great business opportunity. As the ers, are now being seen as a land of great business opportunity. As the ers, are now being seen as a land of great business opportunity. As the ers, are now being seen as a land of great business opportunity. As the

disposable income of the masses is growing, more and more corporate houses are entering disposable income of the masses is growing, more and more corporate houses are entering disposable income of the masses is growing, more and more corporate houses are entering disposable income of the masses is growing, more and more corporate houses are entering

into the rural markets with their new goods and products. Due to this marketing for rural into the rural markets with their new goods and products. Due to this marketing for rural into the rural markets with their new goods and products. Due to this marketing for rural into the rural markets with their new goods and products. Due to this marketing for rural

consuconsuconsuconsumers is becoming more complex. In a country like India, where a substantial mers is becoming more complex. In a country like India, where a substantial mers is becoming more complex. In a country like India, where a substantial mers is becoming more complex. In a country like India, where a substantial

number of the rural people are living below the poverty line, having high level of number of the rural people are living below the poverty line, having high level of number of the rural people are living below the poverty line, having high level of number of the rural people are living below the poverty line, having high level of

unemployment and poor literacy level; consumer awareness continues to remain low. unemployment and poor literacy level; consumer awareness continues to remain low. unemployment and poor literacy level; consumer awareness continues to remain low. unemployment and poor literacy level; consumer awareness continues to remain low.

Several studiSeveral studiSeveral studiSeveral studies have shown that rurales have shown that rurales have shown that rurales have shown that rural consumers are generally ignorant and also consumers are generally ignorant and also consumers are generally ignorant and also consumers are generally ignorant and also

unorganised. Under these circumstances, the sellers or the manufacturers, exploit the unorganised. Under these circumstances, the sellers or the manufacturers, exploit the unorganised. Under these circumstances, the sellers or the manufacturers, exploit the unorganised. Under these circumstances, the sellers or the manufacturers, exploit the

consumers. consumers. consumers. consumers.

Though, the consumers in India have been provided with various safety measures Though, the consumers in India have been provided with various safety measures Though, the consumers in India have been provided with various safety measures Though, the consumers in India have been provided with various safety measures

against theagainst theagainst theagainst their exploitation, still the sellers and producers are hoarding and blackir exploitation, still the sellers and producers are hoarding and blackir exploitation, still the sellers and producers are hoarding and blackir exploitation, still the sellers and producers are hoarding and black----

marketing the essential goods, resorting economic corruption and frequently cheating marketing the essential goods, resorting economic corruption and frequently cheating marketing the essential goods, resorting economic corruption and frequently cheating marketing the essential goods, resorting economic corruption and frequently cheating

the consumers. Rural markets are full of subthe consumers. Rural markets are full of subthe consumers. Rural markets are full of subthe consumers. Rural markets are full of sub----standard goods and duplicity of branded standard goods and duplicity of branded standard goods and duplicity of branded standard goods and duplicity of branded

goods is anothgoods is anothgoods is anothgoods is another major problem in rural areas. As there is no check on production and sale er major problem in rural areas. As there is no check on production and sale er major problem in rural areas. As there is no check on production and sale er major problem in rural areas. As there is no check on production and sale

of such products in the rural markets, many of these products have become health of such products in the rural markets, many of these products have become health of such products in the rural markets, many of these products have become health of such products in the rural markets, many of these products have become health

hazards. The expansion of service sector has added to the problem. Services like insurance, hazards. The expansion of service sector has added to the problem. Services like insurance, hazards. The expansion of service sector has added to the problem. Services like insurance, hazards. The expansion of service sector has added to the problem. Services like insurance,

bankinbankinbankinbanking, electricity, medical have expanded in the rural areas without any checks and g, electricity, medical have expanded in the rural areas without any checks and g, electricity, medical have expanded in the rural areas without any checks and g, 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. balances and the rural consumers continue to be exploited by the service providers. balances and the rural consumers continue to be exploited by the service providers. balances and the rural consumers continue to be exploited by the service providers.

Deficiency in services is a major area of concern. Spurious drugs are causing major Deficiency in services is a major area of concern. Spurious drugs are causing major Deficiency in services is a major area of concern. Spurious drugs are causing major Deficiency in services is a major area of concern. Spurious drugs are causing major

health hhealth hhealth hhealth hazards. The vulnerable sections are mainly women, children and farmers. It is azards. The vulnerable sections are mainly women, children and farmers. It is azards. The vulnerable sections are mainly women, children and farmers. It is azards. The vulnerable sections are mainly women, children and farmers. It is

ii

common to find that farmers are supplied defective seeds, adulterated pesticides and other common to find that farmers are supplied defective seeds, adulterated pesticides and other common to find that farmers are supplied defective seeds, adulterated pesticides and other common to find that farmers are supplied defective seeds, adulterated pesticides and other

sub standard commodities. In the rural markets and hats spurious goods are very sub standard commodities. In the rural markets and hats spurious goods are very sub standard commodities. In the rural markets and hats spurious goods are very sub standard commodities. In the rural markets and hats spurious goods are very

common.common.common.common. The expansion of mass media has further given impetus to consumerism in the The expansion of mass media has further given impetus to consumerism in the The expansion of mass media has further given impetus to consumerism in the The expansion of mass media has further given impetus to consumerism in the

rural areas. rural areas. rural areas. rural areas. Therefore, now it is widely believed that the fate of the consumers cannot be Therefore, now it is widely believed that the fate of the consumers cannot be Therefore, now it is widely believed that the fate of the consumers cannot be Therefore, now it is widely believed that the fate of the consumers cannot be

left to the market forces. In view of this the Government of India has taken a number ofleft to the market forces. In view of this the Government of India has taken a number ofleft to the market forces. In view of this the Government of India has taken a number ofleft to the market forces. In view of this the Government of India has taken a number of

legal measures to protect the consumers by enlarging the scope of consumer protection. Of legal measures to protect the consumers by enlarging the scope of consumer protection. Of legal measures to protect the consumers by enlarging the scope of consumer protection. Of legal measures to protect the consumers by enlarging the scope of consumer protection. Of

the various legal remedies,the various legal remedies,the various legal remedies,the various legal remedies, the Consumer Protection Act, enacted on 24 the Consumer Protection Act, enacted on 24 the Consumer Protection Act, enacted on 24 the Consumer Protection Act, enacted on 24thththth December 1986 is December 1986 is December 1986 is December 1986 is

the principal legal remedy available to the consumers. This is an importantthe principal legal remedy available to the consumers. This is an importantthe principal legal remedy available to the consumers. This is an importantthe principal legal remedy available to the consumers. This is an important Act which Act which Act which Act which

seeks to provide better protection of the interests of the consumers.seeks to provide better protection of the interests of the consumers.seeks to provide better protection of the interests of the consumers.seeks to provide better protection of the interests of the consumers.

According to experts, the four factors which influence demand in rural India areAccording to experts, the four factors which influence demand in rural India areAccording to experts, the four factors which influence demand in rural India areAccording to experts, the four factors which influence demand in rural India are----

access, attitude, awareness and affluence. Some companies have successfully used this to access, attitude, awareness and affluence. Some companies have successfully used this to access, attitude, awareness and affluence. Some companies have successfully used this to access, attitude, awareness and affluence. Some companies have successfully used this to

infinfinfinfluence the rural market for its shampoos in sachets. The sachet strategy has proved so luence the rural market for its shampoos in sachets. The sachet strategy has proved so luence the rural market for its shampoos in sachets. The sachet strategy has proved so luence the rural market for its shampoos in sachets. The sachet strategy has proved so

successful that, according to an ORG successful that, according to an ORG successful that, according to an ORG successful that, according to an ORG ---- MARG data, 95 percent of total shampoo sale in MARG data, 95 percent of total shampoo sale in MARG data, 95 percent of total shampoo sale in MARG data, 95 percent of total shampoo sale in

rural India is by sachets. The company had developed a direct access to markets thrrural India is by sachets. The company had developed a direct access to markets thrrural India is by sachets. The company had developed a direct access to markets thrrural India is by sachets. The company had developed a direct access to markets through ough ough ough

wholesale channel and created awareness through media, demonstration and on ground wholesale channel and created awareness through media, demonstration and on ground wholesale channel and created awareness through media, demonstration and on ground wholesale channel and created awareness through media, demonstration and on ground

contact. This changed the attitude of the villagers. Today, the young and the educated in contact. This changed the attitude of the villagers. Today, the young and the educated in contact. This changed the attitude of the villagers. Today, the young and the educated in contact. This changed the attitude of the villagers. Today, the young and the educated in

the villages are already large in number and this number is increasing. Alreadthe villages are already large in number and this number is increasing. Alreadthe villages are already large in number and this number is increasing. Alreadthe villages are already large in number and this number is increasing. Already, 40 y, 40 y, 40 y, 40

percent of all those graduating from colleges are rural youth. They are the decision percent of all those graduating from colleges are rural youth. They are the decision percent of all those graduating from colleges are rural youth. They are the decision percent of all those graduating from colleges are rural youth. They are the decision

makers and are not very different in education, exposure, attitudes and aspirations from makers and are not very different in education, exposure, attitudes and aspirations from makers and are not very different in education, exposure, attitudes and aspirations from makers and are not very different in education, exposure, attitudes and aspirations from

their counterparts at least in smaller cities and towns.their counterparts at least in smaller cities and towns.their counterparts at least in smaller cities and towns.their counterparts at least in smaller cities and towns.

Consumers are explConsumers are explConsumers are explConsumers are exploited when they are cheated in any form or when not informed oited when they are cheated in any form or when not informed oited when they are cheated in any form or when not informed oited when they are cheated in any form or when not informed

adequately about the product. Consumer exploitation is in many ways. They may be adequately about the product. Consumer exploitation is in many ways. They may be adequately about the product. Consumer exploitation is in many ways. They may be adequately about the product. Consumer exploitation is in many ways. They may be

exploited by giving incomplete or wrong information. They may be exploited by sellers exploited by giving incomplete or wrong information. They may be exploited by sellers exploited by giving incomplete or wrong information. They may be exploited by sellers exploited by giving incomplete or wrong information. They may be exploited by sellers

who may weigh less or measurwho may weigh less or measurwho may weigh less or measurwho may weigh less or measure wrongly. Sometimes, a consumer may be given low e wrongly. Sometimes, a consumer may be given low e wrongly. Sometimes, a consumer may be given low e wrongly. Sometimes, a consumer may be given low

quality of goods. One of the very common and a serious problem by which a consumer quality of goods. One of the very common and a serious problem by which a consumer quality of goods. One of the very common and a serious problem by which a consumer quality of goods. One of the very common and a serious problem by which a consumer

may be exploited and cheated by the shopmay be exploited and cheated by the shopmay be exploited and cheated by the shopmay be exploited and cheated by the shop----keeper is by providing impure or adulterated keeper is by providing impure or adulterated keeper is by providing impure or adulterated keeper is by providing impure or adulterated

goods with harmful substances. Food agoods with harmful substances. Food agoods with harmful substances. Food agoods with harmful substances. Food adulteration is a serious problem in the rural dulteration is a serious problem in the rural dulteration is a serious problem in the rural dulteration is a serious problem in the rural

markets where the administrative machinery is not able to tackle this menace. As far as markets where the administrative machinery is not able to tackle this menace. As far as markets where the administrative machinery is not able to tackle this menace. As far as markets where the administrative machinery is not able to tackle this menace. As far as

the service sector is concerned a large number of complaints regarding medical services, the service sector is concerned a large number of complaints regarding medical services, the service sector is concerned a large number of complaints regarding medical services, the service sector is concerned a large number of complaints regarding medical services,

banking, insurance and electricitbanking, insurance and electricitbanking, insurance and electricitbanking, insurance and electricity go unreported as the consumer is unaware of the y go unreported as the consumer is unaware of the y go unreported as the consumer is unaware of the y go unreported as the consumer is unaware of the

redressal mechanism. Cases of medical negligence are common in the rural areas but redressal mechanism. Cases of medical negligence are common in the rural areas but redressal mechanism. Cases of medical negligence are common in the rural areas but redressal mechanism. Cases of medical negligence are common in the rural areas but

then the consumer has no choice.then the consumer has no choice.then the consumer has no choice.then the consumer has no choice.

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The present study has been conducted in five states of India namely Uttarakhand The present study has been conducted in five states of India namely Uttarakhand The present study has been conducted in five states of India namely Uttarakhand The present study has been conducted in five states of India namely Uttarakhand

from Nortfrom Nortfrom Nortfrom North, Maghalaya from East, Gujarat from West, Tamilnadu from South and h, Maghalaya from East, Gujarat from West, Tamilnadu from South and h, Maghalaya from East, Gujarat from West, Tamilnadu from South and h, Maghalaya from East, Gujarat from West, Tamilnadu from South and

Madhya Pradesh from Central India. The study attempts to evaluate the changing Madhya Pradesh from Central India. The study attempts to evaluate the changing Madhya Pradesh from Central India. The study attempts to evaluate the changing Madhya Pradesh from Central India. The study attempts to evaluate the changing

profile of the rural consumers in India, assess the level of awareness, of rural consumers profile of the rural consumers in India, assess the level of awareness, of rural consumers profile of the rural consumers in India, assess the level of awareness, of rural consumers profile of the rural consumers in India, assess the level of awareness, of rural consumers

on various consumon various consumon various consumon various consumer protection measures initiated by the Government of India and other er protection measures initiated by the Government of India and other er protection measures initiated by the Government of India and other er protection measures initiated by the Government of India and other

agencies, assess the rural consumers’ current knowledge, attitudes, behaviour and agencies, assess the rural consumers’ current knowledge, attitudes, behaviour and agencies, assess the rural consumers’ current knowledge, attitudes, behaviour and agencies, assess the rural consumers’ current knowledge, attitudes, behaviour and

practices while purchasing goods or availing services, examine the nature of unfair trade practices while purchasing goods or availing services, examine the nature of unfair trade practices while purchasing goods or availing services, examine the nature of unfair trade practices while purchasing goods or availing services, examine the nature of unfair trade

practices in tpractices in tpractices in tpractices in the rural areas, assess the level of satisfaction of the rural consumers on he rural areas, assess the level of satisfaction of the rural consumers on he rural areas, assess the level of satisfaction of the rural consumers on he rural areas, assess the level of satisfaction of the rural consumers on

various products and services available in the rural areas and to draw conclusions from various products and services available in the rural areas and to draw conclusions from various products and services available in the rural areas and to draw conclusions from various products and services available in the rural areas and to draw conclusions from

the study and suggest remedial measures for better protection of the rural consumers.the study and suggest remedial measures for better protection of the rural consumers.the study and suggest remedial measures for better protection of the rural consumers.the study and suggest remedial measures for better protection of the rural consumers.

We wouWe wouWe wouWe would like to acknowledge the support extended by the Department of ld like to acknowledge the support extended by the Department of ld like to acknowledge the support extended by the Department of ld like to acknowledge the support extended by the Department of

Consumer Affairs, GoI in conducting this study. We are particularly thankful to Shri. Consumer Affairs, GoI in conducting this study. We are particularly thankful to Shri. Consumer Affairs, GoI in conducting this study. We are particularly thankful to Shri. Consumer Affairs, GoI in conducting this study. We are particularly thankful to Shri.

Rajiv Agarwal, Secretary, Shri Rakesh Kakkar, Additional Secretary and Shri G.N Rajiv Agarwal, Secretary, Shri Rakesh Kakkar, Additional Secretary and Shri G.N Rajiv Agarwal, Secretary, Shri Rakesh Kakkar, Additional Secretary and Shri G.N Rajiv Agarwal, Secretary, Shri Rakesh Kakkar, Additional Secretary and Shri G.N

Shreekumaran, Joint SecreShreekumaran, Joint SecreShreekumaran, Joint SecreShreekumaran, Joint Secretary, Department of Consumer Affairs, GoI for their help. We tary, Department of Consumer Affairs, GoI for their help. We tary, Department of Consumer Affairs, GoI for their help. We tary, Department of Consumer Affairs, GoI for their help. We

would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for his encouragement and would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for his encouragement and would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for his encouragement and would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for his encouragement and

guidance. Our thanks are due to our colleagues in the Centre for Consumer Studies guidance. Our thanks are due to our colleagues in the Centre for Consumer Studies guidance. Our thanks are due to our colleagues in the Centre for Consumer Studies guidance. Our thanks are due to our colleagues in the Centre for Consumer Studies

particularly Amit, Virendraparticularly Amit, Virendraparticularly Amit, Virendraparticularly Amit, Virendra and Pankaj for not only providing valuable inputs and and Pankaj for not only providing valuable inputs and and Pankaj for not only providing valuable inputs and and Pankaj for not only providing valuable inputs and

rendering support in completing the study but also in taking up most of the field work.. rendering support in completing the study but also in taking up most of the field work.. rendering support in completing the study but also in taking up most of the field work.. rendering support in completing the study but also in taking up most of the field work..

We also acknowledge the use of data from various sources for which appropriate references We also acknowledge the use of data from various sources for which appropriate references We also acknowledge the use of data from various sources for which appropriate references We also acknowledge the use of data from various sources for which appropriate references

are given.are given.are given.are given.

We are conWe are conWe are conWe are confident that this report will be useful to various stakeholders and policy fident that this report will be useful to various stakeholders and policy fident that this report will be useful to various stakeholders and policy fident that this report will be useful to various stakeholders and policy

makers to reorient policies and programmes for better protection of the rural consumers. makers to reorient policies and programmes for better protection of the rural consumers. makers to reorient policies and programmes for better protection of the rural consumers. makers to reorient policies and programmes for better protection of the rural consumers.

Unless the consumer movement reaches the village, the consumers will continue to be Unless the consumer movement reaches the village, the consumers will continue to be Unless the consumer movement reaches the village, the consumers will continue to be Unless the consumer movement reaches the village, the consumers will continue to be

exploitedexploitedexploitedexploited....

Suresh MisraSuresh MisraSuresh MisraSuresh Misra Sapna ChadahSapna ChadahSapna ChadahSapna Chadah

20.9.200920.9.200920.9.200920.9.2009 New DelhiNew DelhiNew DelhiNew Delhi

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Contents

Page No.

Preface i-iii

1. Chapter I Introduction 1-14

2. Chapter II Profile of Rural Consumers 15-42

3. Chapter III Level of Awareness among Rural Consumers 43-84

4. Chapter IV Findings & Recommendations 85-91

5. Annexure 92-94

1

CHAPTER I

INTRODUCTION

Globalisation, liberalisation and privatisation have transformed the Indian

economy into a vibrant, rapidly growing consumer market. As a result the markets

are flooded with different kinds of goods and services, substantially effecting and

changing the purchasing pattern of the consumers. The rural markets, which were

earlier ignored by most of the big international market players, are now being seen

as a land of great business opportunity. As the disposable income of the masses

is growing, more and more corporate houses are entering into the rural markets

with their new goods and products. Due to this marketing for rural consumers is

becoming more complex.

In a country like India, where a substantial number of the rural people are

living below the poverty line, having high level of unemployment and poor literacy

level; consumer awareness continues to remain low. Several studies have shown

that rural consumers are generally ignorant and also unorganised. Under these

circumstances, the sellers or the manufacturers, exploit the consumers. Though,

the consumers in India have been provided with various safety measures against

their exploitation, still the sellers and producers are hoarding and black-marketing

the essential goods, resorting economic corruption and frequently cheating the

consumers. Rural markets are full of sub-standard goods and duplicity of branded

goods is another major problem in rural areas. As there is no check on production

and sale of such products in the rural markets, many of these products have

become health hazards. 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. Deficiency in services is a major area of

concern. Spurious drugs are causing major health hazards. The vulnerable

sections are mainly women, children and farmers. It is common to find that farmers

are supplied defective seeds, adulterated pesticides and other commodities. In the

rural markets and hats spurious goods are very common. The expansion of mass

2

media has further given impetus to consumerism in the rural areas. Therefore, now

it is widely believed that the fate of the consumers cannot be left to the market

forces. In view of this the Government of India has taken a number of legal

measures to protect the consumers by enlarging the scope of consumer protection.

Of the various legal remedies, the Consumer Protection Act, enacted on 24th

December 1986 is the principal legal remedy available to the consumers. This is

an important Act which seeks to provide better protection of the interests of the

consumers.

In the present situation, consumer protection, though as old as consumer

exploitation, has assumed greater importance and relevance. Now there are laws

and policies which focus on consumer protection and welfare. Special emphasis is

being given to consumer education so that people become aware about their rights

and responsibilities as consumers and how to redress their grievances. In India

various Acts intended to protect the consumers directly or indirectly against

different forms of exploitation were enacted from time to time. However, except for

the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, all the other

Acts were mainly punitive and preventive in nature. Inspite of these Acts the

consumers did not have any effective mechanism or institutional arrangements for

the speedy redressal of their grievances and also the lack of effective popular

movement isolated the consumer and his plight only increased. Seeing the

pressure mounting from various consumer protection groups and the consumers

themselves the Parliament enacted the Consumer Protection Act in 1986.

Consumer Awareness in India

The Consumer Protection Act enacted on 24th December, 1986 is a

benevolent, unique and highly progressive piece of social welfare legislation

providing for simple, speedy and less expensive remedy for the redressal of

consumer grievances in relation to defective goods and deficient services.

Consumer Protection Act is a weapon in the hands of consumers to fight against

exploitation by traders, manufacturers and sellers on one hand and providers of

services on the other. The Act provides effective, people oriented, broad based

and efficient remedy to consumers against unfair dealings and exploitation. It was

3

enacted with an objective to provide better protection of the interests of the

consumers and to make provision for the establishment of Consumer Councils and

other authorities for the settlement of consumer disputes. Unlike other laws, which

are basically punitive or preventive in nature the provisions of the Act are

compensatory. It is a matter of great satisfaction that we can legitimately boast that

we now have in our country a statute, which provides more effective protection to

the consumers than any corresponding legislation in force in countries, which are

considered to be much more advanced and industrialised.

The Act contemplates establishment of adjudicatory and advisory

structures in the form of consumer fora and council structure respectively for the

protection of consumers’ rights. It extends to the whole of India except the State of

Jammu and Kashmir which has its own Consumer Protection Act. The Act applies

to all goods and services unless any good or service is expressly excluded by the

Central Government by notification. The Act extends to all sectors -public, private

or cooperative. The Consumer Protection Act is an alternative and additional

remedy to the remedies already available to the aggrieved persons/consumers by

way of civil suit.

To provide cheap, speedy and simple redressal to consumer disputes, three

tier quasi-judicial machinery is set up at each District, State and National levels

called District Forums, State Consumer Disputes Redressal Commission and

National Consumer Disputes Redressal Commission respectively. At present,

there are 662 District Forums, 35 State Commissions with apex body as a National

Consumer Disputes Redressal Commission (NCDRC). These quasi-judicial bodies

are required to follow summary procedure and Principles of Natural Justice to

provide quick and speedy justice to the consumers.

After the enactment of the Consumer Protection Act, 1986, the first

independent evaluation study of the implementation of this Act was done through a

study conducted by IIPA in 1994. It was found that large majority of the consumers

belonging to various categories and income groups were completely ignorant of

the existence of the CPA and the redressal agencies created under it. Eleven

4

years later, according to a survey commissioned through ORG Centre for Social

Research by the C&AG, the position had improved only marginally. The survey

was conducted in July-August, 2005 in 25 States/ UT’s covering 48,732

consumers, 6237 complaints, 249 manufacturers / service providers, 39 NGOs and

34 laboratories. The report of ORG-MARG revealed that: 1

• Sixty-six percent of the consumers interviewed were not aware of consumer rights and 82 percent were even unaware of the Act.

• Nearly 49 percent of the aware consumers had come to know about the Act only in the last 4 years though the Act had been in existence for the past 18 years.

• Overall, only 13 percent of the consumers reported to have been aware of the existence of any redressal agency.

• A majority of the complainants came to know about the redressal agencies through electronic media (48 percent), print media (61 percent) and friends/relatives (68 percent,), NGOs were not a popular source of awareness as only 4.9 percentage of the complainants attributed their awareness to the work of NGOs.

• The consumers were not aware of the features of the simple and inexpensive system of lodging complaint in the absence of any focused awareness programme launched by the Ministry or the States in this regard. The beneficiary survey carried out by ORG – MARG revealed that 78 percent of the respondents were carrying a negative opinion of the efforts made by the government or had no idea about the same and were not aware that they could directly represent themselves in the Consumer Forums. It is pertinent to note that lack of awareness in this regard had deprived the consumers of the benefit of the adjudication mechanism as out of the total expenditure of ` 3387 incurred by the consumers on each case in the Consumer Forum on an average, as much as ` 2787 (82 percent) was the expenditure on advocates.

Therefore, one of the major hindrances in the consumer movement in the

country is the lack of awareness among the consumers. The consumers apart from

being unorganized do not have the mechanism to understand their rights and

responsibilities. These studies reveal not only lack of awareness but lack of

consumer education as well. A lot more needs to be done on this front. The right to

consumer education has been recogonised under the Consumer Protection Act,

1 CAG, Performance Audit of the Implementation of the Consumer Protection Act and Rules-Report

of the Comptroller and Auditor General of India for the year ended March 2005, Union Government (Civil), Performance Audit, 2006, p. 9

5

1986. However, unless awareness increases realizing the rights to the consumers,

consumer education remains a distant dream.

Need for Consumer Education

The need for consumer education has increased over time as today the

consumers operate in an increasingly complex marketplace and are faced with

increasing amounts of information and an expanding choice of complex products

and services. As a consequence they are more exposed to fraud and require a

wider range of skills and knowledge than ever before. Consumer education is a

potent tool for empowering consumers as it equips consumers with information and

skills necessary to meet challenges posed by the markets. Through education,

consumers obtain information about the products and the services and empower

them and makes them aware of their rights and responsibilities and helps to

ensure their welfare.

Consumer education improves the position of the consumers in the

marketplace and helps them make informed choice and thereby enhance their

welfare. It also contributes to the well functioning of the markets by promoting

effective competition. It is thus in the common interest of governments, consumers

and businesses to empower the individual consumer as much as possible through

awareness of his/her rights, knowledge of how to defend himself against various

pitfalls and to cope with the subsequent consequences, as well as the ability to act

proactively in the marketplace. According to Wells and Atherton consumer

education can be defined as:

“ a process of gaining skills, knowledge and understanding needed by individuals in a consumer society such that they can make full use of consumer opportunities presented in today’s complex marketplace.” 2 Most countries consider consumer education as an important tool for

consumer protection. However, the scope of consumer education differs

significantly among countries depending on the socio-economic and cultural

conditions prevailing there. Yet it generally covers one or more of the following

2 Wells, J and Atherton, M., “Consumer Education : Learning for Life”, Consumer 21, Autumn,

1998,pp. 15-20,

6

areas: consumer protection, consumer skills to help them make more informed

decisions and protection of public interest which relates to environmental and

social issues. Countries have articulated consumer education objectives in various

ways, such as laws on consumer protection; education on trade; government

programmes and strategies; and school and college curricula. High quality

programmes focused on stimulating relevant issues can engage the interest of

consumers and help equip them with the skills and knowledge to make better

choices and to resolve problems when things go wrong. Empowered consumers

are knowledgeable, confident, assertive and self reliant. Consumer education has

an important role to play in supporting those with less developed consumer

knowledge and skills. By demanding high standards from business, consumers

help promote vigorous, competitive, markets. As a tool for empowerment,

consumer education is therefore important to make markets work well for

consumers.

Structure of Consumer Education

Available literature indicates that consumer education takes many forms

and takes place in many different settings, from formal courses in schools or

universities to informal experience in families, communities and workplaces. Three

forms of consumer education are being implemented in OECD member countries

and some non-member economies which are as follows: 3

� Formal education refers to learning through a programme of instruction in

an educational institution, adult training centre or in the workplace, and is generally

recognized by a qualification or a certificate. All countries acknowledge that

children and young people are particularly important targets of consumer education

as theses age groups account for an ever-increasing share of family consumption.

At the same time they are likely to be particularly vulnerable to making unwise

decisions and or falling victim to aggressive marketing. The fact that both parents

often work outside the home has led to a change in the role of parents in consumer

training. With this in mind, many countries have made consumer education

3 OECD, Promoting Consumer Education – Trends, Policies and Good Practices, OECD, 2009 pp.

11-31;

7

compulsory in primary, secondary and in some countries in upper-secondary

grades. The objectives include helping pupils to: gain knowledge of what it means

to act as informed consumers; develop and understand society’s function as a

whole and specific role of consumers; master skills to function as informed and

responsible consumers; recognize the importance of being an informed consumer.

The ultimate goal is for consumers to act spontaneously in informed, educated and

responsible ways. 4

In most countries, consumer education is integrated into the school

curriculum in an interdisciplinary way. Subjects that may include consumer

concepts are economics, mathematics, biology, chemistry, language, arts,

business education and home economics. These subjects cover a variety of issues

which are important for consumers in contemporary society, including the effects of

consumption on the environment, production and consumption in a global

perspective, health and food, product quality and safety, and financial

management. Relevant issues are thus addressed in cross-curricular themes such

as home economics, citizenship, civic education or social studies.

In addition, a variety of non-formal education tools or activities (i.e. not

included in the curriculum) complement more traditional methods. These are

websites, videos, exercise books, school magazines as well as theme days, school

competitions and contests, consumer clubs, national fairs for teachers and pupils

and special educational programmes. These non-formal teaching tools are mostly

produced by consumer associations in co-operation with parent-teacher

associations, and in some countries with other stakeholders. Consumer education

generally focuses on the primary and secondary school curriculum. However, in

some countries it also takes place in universities.

� Lifelong education- There is wide consensus that learning, which is of

significance to individuals as well as to communities and societies, must extend

beyond formal education. Lifelong education covers all purposeful learning activity

4 Bannister, R. and C. Monsma, “Classification of Concepts in Consumer Education “ NASSP

Bulletin, 1982

8

“from the cradle to the grave” which aims to improve the knowledge and

competencies of all individuals who participate in learning activities. A prerequisite

for lifelong learning is a sound foundation in basic educational competencies

acquired in formal education and opportunities for further learning once persons

leave initial education and training. Practically, this includes education available at

community centres as well as loosely organized education. Lifelong learning may

take place at the individual level (e.g. self-directed learning) or at the group level

(e.g. at the workplace or within the family).

One of the fundamental features of lifelong learning is a systematic and

interconnected approach to the organization of learning rather than a fragmented

approach in which separate policies are implemented for each stage of education.

This is appropriate for consumer education, since consumers’ knowledge and

information needs to be frequently updated, and the attainment of informed and

knowledgeable consumption is a cumulative process. The adult consumers face a

more complex environment than young consumers, the range of knowledge they

need also becomes broader and more complex as they grow older.

� Targeted education- It refers to a range of educational activities designed

for particular consumer groups that are considered vulnerable (e.g. women, the

disabled and the poor) to help protect them against fraudulent or deceptive

practices in the marketplace or other specific consumer–related issues. Specific

groups which are targeted in various countries in their major initiatives are: young

children, the elderly, women, people with a limiting or longstanding illness or

handicapped, populations in rural areas, unemployed persons and tourists.

These three concepts are not mutually exclusive. Lifelong education is a

broad concept that encompasses both formal and targeted education. At the same

time, several countries implement formal and/or targeted education but do not

support the lifelong learning concept. Lifelong and targeted consumer education

may be “non-formal” or “informal”:

9

• Non-formal learning takes place through a programme but is not usually evaluated and does not lead to certification.

• Informal learning is learning from daily work-related, family or leisure activities.

Framework for Consumer Education

Most countries have a centralized institutional framework for consumer

education, under which the central government develops consumer education

policies which reach local areas through local governments or through regional

networks. In many countries, local governments implement policies which are

adjusted to the regional environment but they lack discretionary power. A few

countries operate consumer education policies in a decentralized way. In this case,

the central government sets the overall policy framework but major initiatives are

developed and delivered at local levels.

Other market players and stakeholders actively involved in consumer

education include:

• Consumer organizations and other civil groups whose objective is to promote consumer education.

• Industry and trade associations and individual companies.

• Universities and educational institutions.

• Teachers’ associations, practitioners, teachers and instructors.

• Family and parents associations.

• Media

As the scope of consumer education has broadened and become more

proactive, more groups have been involved and there has been a greater focus on

influencing consumption behaviour in more conscious and critical ways. The

respective roles of the public and private sectors in enhancing consumer education

vary among jurisdictions, depending in part on their statutory situation. In general,

the provision of information and advice relating to consumer protection is mainly

the task of government and consumer organization. Yet the objective of raising

consumer awareness involves a broader range of stakeholders.

10

Key Issues and Challenges in Consumer Education

Basically consumer education faces five main challenges: 5

• Lacks of overall strategies- Most countries do not have an overall

consumer education strategy. Even in countries where lifelong consumer

education has been endorsed, little appears to have been done to

implement programmes to support such learning.

• Need to enhance the quality of education provided- According to the

country responses, the quality of consumer education could be

enhanced in terms not only of content, but also of delivery.

• Limited opportunities for education in school settings- Because of

the limited time available in the school curriculum, it is not easy to find a

place for consumer education. In addition, responses indicate that the

relevant governmental institutions do not always fully see the importance

of consumer education and that school teachers hesitate to include

consumer education in their classes.

• Lack of coherence in education initiatives- Although consumer

education in taught, there is a general lack of cohesiveness with other

relevant education policies, and it is implemented in a fragmented way.

• Lack of sufficient self-motivation for both the educated and the

educator- Some responses suggest that it is difficult for policy - makers

to promote consumer education because both the educators and the

educated are not very motivated to find and profit from the relevant

educational opportunities and information.

• Limited resources- All of these challenges require additional resources

but these are limited in many countries.

Need of the Study

Since 1986, consumer education and awareness has attracted the attention

of the Government of India. The laws can only give certain rights to the consumers,

but its functioning and implementation largely depends on the awareness and

5 OECD, Promoting Consumer Education – Trends, Policies and Good Practices, OECD, 2009 pp.

39-40

11

efforts of the consumers themselves. The problem is more acute in the rural areas.

In fact, an educated and aware person is an empowered consumer. Education

equips a person with the skill to make discerning choices, to sort out problems

effectively and to seek further information and help appropriately.

In this backdrop of ongoing efforts of Government of India to disseminate

the consumer rights to the people and to protect them from the exploitation of

market forces, the focus of the present research work is to evaluate the level of

consumer’s awareness in different parts of rural India. The reports of National

Commission for Applied Economic Research clearly reveal that the rural growth

rates have already outpaced urban ones and will continue to do so through the

next decade. Rural India accounts for more than 50% of the GDP. Out of 62.97

million households of India those are getting more than 5 lakhs per annum, nearly

28.68 million households (46%) live in Rural India. The rural market in India is

projected to be bigger than the urban market for fast moving consumer goods;

rural consumption expenditure is accounted for around 60 percent of the country's

total consumption expenditure. Hence, it is imperative to analyse the social, legal

and other measures taken in rural areas to protect the interest of consumers, as

more and more companies will try to sell their goods and products in rural markets.

The rural consumers need to be educated about their rights and adequate steps

are taken to ensure that they get the value for their money as consumers.

Objectives of the Study

The main objectives of the study are as follows:

1. To evaluate the changing profile of the rural consumers in India 2. To study the level of awareness, of rural consumers on various consumer

protection measures initiated by the Government of India and other agencies.

3. To evaluate the rural consumers’ current knowledge, attitudes, behaviour

and practices while purchasing goods or availing services.

4. To examine the nature of unfair trade practices in the rural areas.

12

5. To assess the level of satisfaction of the rural consumers on various products and services available in the rural areas.

6. To draw conclusions from the study and suggest remedial measures for better protection of the rural consumers.

Methodology

The present study is an empirical research based on both primary and

secondary data. It is a blend of both descriptive and analytical methods of study.

The secondary data was collected from government publication, books, journals,

newspapers and various prominent Voluntary Consumer Organisations working in

this area. The information regarding level and satisfaction, awareness, attitude and

behaviour of rural consumers at individual and household level was gathered

through primary surveys. For the purpose an interview schedule was prepared.

Besides focus group interaction was also done. The questionnaire was subjected

to reliability by pre-testing the constructed tools by administering it to 100

consumers randomly. The questionnaire was modified based on the responses got

from the consumers.

The sample areas were selected in a way that they can best represent the

entire geographical regions of the country. Consequently, five states from different

regions of India were selected for the study. They were: Uttarakhand from North,

Maghalaya from East, Gujarat from West, Tamilnadu from South and Madhya

Pradesh from Central India. It is true that geographical location may not

necessarily be the influencing factor of people’s awareness but such a selection is

necessary to know the level of awareness among consumers, from all the parts of

the country. The sample was selected from these five states using the random

sampling technique. From each State two Districts and from each district two

blocks were randomly selected. From each block four villages were randomly

selected. It was not difficult to identify a consumer as everyone is a consumer and

either buys a product or avails of a service for consideration. The households from

these villages were selected by random sampling technique. Total sample of 2000

households was taken for investigation from 80 villages (25 household from each

village) spreading across ten Districts of five selected states. The data so collected

13

was analyzed and tabulated. Appropriate statistical methods were applied to

classify and analyze the data, collected on the subject.

Sample Area

State District Two blocks randomly selected from each district

Ahmedabad Daskroi Bavla Gujarat

Junagarh Veraval Talala

Bhopal Phanda Berasia Madhya Pradesh Jabalpur Sihore Kundam

East Khasi Hills Mylliem Mawryngkneng Meghalaya

Ribhoi Umsning Umling

Kanyakumari Agasteeswaram Thovalai Tamilnadu

Viudhnagar Aruppukottai Kariapatti

Nainital Bhimtal Dhari Uttarakhand

Pauri Garhwal Pauri Kot

All India (2000)

Tamilnadu (400)

Mehalaya (400)

MP (400)

Gujarat (400)

Two Districts from each State

(2x5 =10)

Two Blocks from each District

(2x10 = 20)

Uttarakhand (400)

Four Villages from each Block

(4x20 = 80)

25 HH from each village

(25x4 = 100)

14

Work plan and its phasing:

Work Plan Months

1 2 3 4 5 6

Phase 1- Identification of District and Villages and Resource Planning

Phase 2- Collection of Primary and Secondary Data

Phase 3- Data Analysis and Report writing

Phase 4- Final Report Preparation and Plan formulation

15

CHAPTER II

PROFILE OF RURAL CONSUMERS

Introduction

India lives in numerous villages, scattered throughout the country. Rural

areas currently are home to nearly 70 percent of India’s population and have

historically accounted for more than half of Indian consumption. Even with

increasing urbanization and migration, it is estimated that 63 percent of India’s

population will continue to live in rural areas by 2025. In terms of economic output,

rural India accounts for almost half (48%) of the country’s economy, and the rural

markets have the potential to reach $500 billion by 2020. Thus rural areas will

continue to remain vitally important to the Indian economy. However, it is

unfortunate truth that a large percentage of this population lives in high risk and

unpredictable environment. Large section of the population lacks even basic

services like education, health, drinking water, sanitation and employment.

Providing rural India with better access to services, technology, education and

health care will reduce inequality, alleviate poverty for hundreds of millions of

India’s citizen and add an additional engine of growth to India’s bulging economy.

The rural population in India comprises the core of Indian society and

represents the real India. According to the 2001 census, there are 5, 80,779

villages in India and about 74% of Indian population lives in these villages. The

number of people living in each of these villages also varies considerably. It is

found that most of the Indian villages have a population of less than 10,000 while

there are only a few villages where more than 10,000 people live (Table 1). The

country opened up its economy in 1992 and since then due to globalisation and

liberalisation the market is flooded with new products and services. Technological

revolution and information explosion have also given tremendous boost to

consumer culture. The consumers have been sucked into the market economy and

today the market determines the needs and preferences of the consumers. This

16

consumer culture and the changing consumption pattern is now not only confined

to the urban areas but is going deep down to the rural markets. The rural markets

are the new hunting grounds for the business.

Table 1 Location and Concentration of Rural Population

Population Range (No of

Persons) Number of

Villages Proportion to Total Village

Proportion to total Rural Population

Less than 200 103952 17.9 1.7 200 to 499 141143 24.3 7.8

500 to 9991 144998 25 16.8 1000 to 1999 114395 19.7 25.7 2000 to 4999 62915 10.8 29.8 5000 to 9999 10597 1.8 11.2

10000 and above 2779 0.5 7.0 Total 580779 100 100

Source: Census of India, 2001

Given the rapidity with which urban population is growing, the share of rural

population may come down to 70 percent by the turn of this century. While a

quarter (25.70 percent) of population of India is classified as urban (in 1991), only

20.83 percent of the labour force lives in cities. Rural areas thus sustain four-fifth

of the total labour force (main workers) of the country. More than two thirds (63.2

percent) of the working population is engaged in agriculture and allied activities (as

cultivators, agricultural labourers and live-stock farmer, etc. (Table 2 and Figure 1)

Table 2 Occupational Pattern of Rural population

Occupation Proportion to Total Rural Population (in %)

Agricultural 50 Agricultural labour 27 Business 10 Non-agricultural labour 9 Salary earners 2 Not gainfully employed 2 Total Rural Population 100

Source: Census of India, 2001

17

Though large parts of rural India continues to be abjectly poor and

dependent upon unprofitable agriculture business, yet there is a new emerging and

expanding rural India as well. This rural India is prosperous and has money power,

consisting of self employed people. Thus rural India with significant income growth

and employment diversity is a potential market for business to capture. The rural

consumers have now started demanding life improving products and services of

real quality and durables that enhance productivity and increase earning. Though

the penetration of most products in rural India is still very poor, however, a small

penetration of a large population results in a very large actual market size. Thus

rural markets are and will continue to remain attractive and important.

Figure 1

Occupation of Rural Population

Source: Census of India, 2001

PROFILE OF RURAL CONSUMERS

Sources of Rural Income

The share of rural activities in the gross National Product of the country is,

however, secularly declining. Agriculture’s share in the GDP in 1951 was 65

percent; it declined to 45 percent in 1971. In 1990-91, the contribution of

agriculture towards Gross Domestic Product (GDP) output was at 32%, which has

18

decreased to 20% by 2005-06. If this trend continues, the output would be

expected to decrease further. This makes us think about the fact that the Indian

economy is mainly dependant on agriculture, but in the future it would contribute to

only 10-15% of the GDP. We need to look into the reasons for this worrying trend.

Agriculture is undoubtedly the most important sector from the point of view of

inclusion, since it is the primary source of income for about half the population

even today. (Table 3 and Figure 2) The slowing down of agriculture growth to less

than 2 percent per annum, since the late 1990s has undoubtedly been the root

cause of much of the rural distress. Naturally then, the per capita income of rural

population is far lower than that of its counterpart living in urban areas.

Table 3

Source of Income of Rural Population

Sources of income Proportion to Total Rural income

Agricultural 59 Agricultural wage 16 Business & Craft 9 Non-agricultural wage 7 Salaries 3 Current transfers 2 Others 4 Total 100 Source: Census of India, 2001

Figure 2

Sources of Income of Rural Population

Source: Census of India, 2001

19

There are more poor in rural than in urban areas whether one looks at

poverty in terms of absolute number or in terms of percent of population below the

poverty line. A substantial number of urban poor have deep roots in rural areas.

When we look at the question of poverty in terms of access to work opportunities

and basic needs, the rural parts of India are in far worse situation. Self reliance

which made rural people meet their basic needs in most adverse circumstances

stands totally destroyed. Government, which professed and promised to uplift them

from the miserable living conditions, has failed to do much, if the records of the last

five decades are any indicator.

Land in its broadest sense is the most vital resource of rural India. Its

importance further increases in the context of rapid growth of population

particularly in rural areas. The first task of any meaningful rural development policy

is to ensure access to land for all those who were denied the same. Another major

task would be to diversify the rural economy to such an extent that dependence of

the people on agriculture declines. Agricultural census returns have consistently

shown iniquitous distribution of arable land in India. In 1971, the country had 71

million operational holdings which increased to 105 million in 1990-91. The

average size of holdings, however, declined from 2.28 ha in 1970-71 to 1.57 ha in

1990-91 indicating increasing pressure of population on land resources. When we

look at the size of distribution of holdings, we find that 69.9 percent of holdings

were small i.e. less than 2 ha in 1970-71. The proportion increased to 78.9

percent in 1990-91. The share of marginal holdings (less than one ha) also

increased from 51 percent to 59 percent. In 1970-71, almost 70 percent (69.90

percent) of the total operational holdings accounted for only 20.9 percent of the

area operated.

According to the NSS Report No. 492 on “Some Aspects of Operational

land Holdings in India, 2002-03,” released in 2006 there were 101.3 million

holdings operated during the kharif season of 2002-03 and 95.7 million holdings

operated during the rabi season of the same agricultural year. The average area

operated per holding in 2002-03 was 1.06 hectares compared to 1.34 hectares

20

during 1991-92 and 1.67 hectares in 1981-82. Marginal holdings (of size 1 hectare

or less) in 2002-03 constituted 70% of all operational holdings, small holdings (size

1 to 2 hectares) constituted 16%, semi-medium holdings (2 to 4 hectares) were

9%, medium holdings (4 to 10 hectares) were 4%, and large holdings (over 10

hectares) less than 1%. The share of marginal holdings in total operated area

climbed by 6-7 percentage points since 1991-92 to reach 22-23%, drawing level

with the shares of the semi-medium and medium holdings, which had the largest

shares in 1991-92. Tenant holdings, that is, holdings with partly or wholly leased-

in land, formed about 10% of operational holdings during 2002-03 compared to

11% in 1991-92. On an average, a tenant holding operated 0.7 hectares of

tenanted land in 2002-03. The share of leased-in land in total operated area, which

has been declining more or less steadily from 10.7% in 1960-61, was 6.5% for the

kharif season of 2002-03. Today land has become the most valuable asset for the

rural inhabitants due to lack of employment as a result there are serious protests

as a result of land acquisition.

The report of the global Hunger Index 2007 from International Food Policy

Research Institute (IFPRI) has ranked India 94th, well behind neighboring China

and Pakistan, in its overall list. Worse, while much is being made out of India being

a young country, the report said that 40 percent of the world’s underweight children

below five years live in India while more than half of all children with low birth

weight are born in South Asia. The report said that though India has improved its

score of 25.03 on the index compared to 33.73 in 1990, it is lagging behind China

and Pakistan ranked at 47 and 88 respectively, in the list of 118 countries. The

index is primarily based on a comparison of the undernourished out of the total

population of a country and prevalence of under weight children below five years.

“One in seven people go to bed hungry every day, which counts up to 854 million

people worldwide. Hunger is one of the world’s major problems and therefore one

of its most important challenges”, the report states.

Besides, India’s score on the progress indicator of the Global Hunger Index

is 0.496. It reduced hunger by 8.7 since 1990 whereas the reduction target was

21

17.6 for the period from 1990-2015. “In India where a large majority of the South

Asia’s population lives, economic growth in the agricultural sector has lagged

considerably behind the growth in other sectors in recent years. This has a

negative effect on the progress in alleviating poverty and hunger in rural areas,”

the report stated. Further, it added that members of the lower castes and certain

ethnic minorities continue to be discriminated against in the society and are

therefore in a disadvantageous position in regard to educational opportunities and

the labour market. The report published by the National Commission for

Enterprises in the Unorganized Sector (NCEUS) in August 2007 had come out with

similar findings. The NCEUS report had stated that “agricultural labourers are

among the most marginalized group among the rural poor, at the lowest rung of

poverty levels.”

On malnutrition in the South Asian Region, the IFPRI report said that “in

some parts of India, for instance, male and women make do with the leftovers. This

results in children of undernourished and anemic mothers too have a higher risk of

being born underweight”.

Rural Consumers

The rural consumer is generally seen as the less affluent, as compared to

his urban cousin but things are changing in rural India over the last ten years. Like

any market that has seen a demand and awareness boom, rural India has also

been witnessing considerable rise in purchasing power. A change in consumption

patterns and access to communication media have made rural market a vital cog in

the sales-growth wheel, especially with demand for many categories of products

and services plateau in the urban markets. In spite of increasing number of rural

consumers, provisions for consumer protection and welfare are often based on the

general standard and circumstances of those living in big cities and towns.

Although consumers as a whole are in an equal bargaining position, there are

certain recognizable groups which are disadvantaged in more ways than the

others. Disadvantaged consumers are those who are less able to assert their rights

and rural consumers comprise one such group. Rural consumers remain

disadvantaged as their right to information, choice, redress, and consumer

22

education are not sufficiently fulfilled. Consequently such consumers need support

in maintaining their rights so that they can bargain equally with the producers or

the service providers.

Marketing and Research Team, (MART) an organization involved for

decades in rural marketing research, has over the years built up a veritable trove of

research on rural consumers and their consumption patterns. Some of the findings

were presented by the President, MART at the Rural Marketing and

Communication Conference organized by the Federation of Indian Chamber of

Commerce and Industry (FICCI) at Delhi held in 2003. The following are the

findings of MART:

1. The rural consumer may not be very educated, but he is certainly astute,

with a lot of common sense and practical experience of handling the

vagaries and uncertainties of life. He displays great ingenuity and

adaptability as evidenced by his learning to repair his tractor, hand pump

and motorbike, and finding a host of local solutions in everyday life.

2. Though low on economic resources, he does not go in for only 'cheap’

products but looks for value for money. Perception of a premium product

is not yet relevant in rural markets, with consumers more concerned with

functionality than unnecessary ‘frills’ with a consumer durable. Too many

features with a product tend to confuse the rural consumer.

3. Rural consumers are generally mistrustful and wary of urbanities and

turned off by their patronizing attitudes. It is not easy for a rank outsider

to get the rural consumer to spend money.

4. Brand adherence is high among village consumers. This may not

necessarily be on account of loyalties. Limited access to alternatives and

lack of information about possible choices do make them 'stick' to tried

and tested brands.

23

5. Brand recognition is often on the basis of logos, symbols, colours rather

than the exact brand name. This tendency is partly responsible for the

widespread menace of spurious products in rural markets, as it is easy

to deceive the rural consumer with look-alikes.

6. A very high degree of involvement characterizes purchase of expensive

products like consumer durables. A lot of checking and counterchecking

is done to seek reassurance on the soundness of the buying decision.

Marketers must embody reassurance and provide opportunity to 'see

and touch' the product in their marketing communication processes.

7. Routine is important to a rural consumer's life as a lot of time consuming

activities characterize his everyday life. The routine is governed by

nature and seasons, not by the calendar or the clock. Sunday is not

typically a holiday. In buying processes, the consumer is not in a hurry

and cannot be pushed into a hasty purchase for these segments.

8. Rural incomes show a great seasonality for the segment of large

farmers. The segment of petty farmers, farm labour, non farm workers

and the salaried class show a greater regularity of income patterns so

the consumption cycles are also more regular and predictable.

9. On account of far higher degree of inter personal communication

characterizing village life and relatively low penetration of mass media,

word of mouth is a very effective medium of influence generation.

Existing users, dealers, village influential, youth studying or working in

urban locations are all consulted before making purchases.

10. Among the households with TV ownership, TV viewing is the highest

among women and children who in contrast to the traditional, household

head dominated decision scenario are fast emerging as demand

generators for the household goods. Decisions on durables like radio,

TV and two wheelers are still male dominated decisions, taken in

consultation with other people in the community.

24

11. The rural youth are increasingly becoming more exposed to urban

lifestyles on account of their frequent visits to urban locations either for

higher education or for work. Their media exposure to television is also

much higher. This makes urban lifestyles an inspirational model for them

and their preference for national brands is on the rise.

12. While culture and social norms have a greater hold on rural consumer

than urban ones, perceptions, traditions and values vary from state to

state, sometimes from region to region. It is, therefore, difficult to work

with a pan rural Indian communication package. Two step flow of

communication, using opinion leaders and mass media both, seems to

work better in rural settings. These observations made on the basis of a

host of research based inputs make it very clear that rural marketing

effort cannot be visualized as a simple extension of the urban marketing

process. It is a different market and presents a different set of premises

on the basis of which suitable marketing.

Impact of globalisation

The impact of globalisation is being felt in rural India as much as in urban.

But it is slow. However, in the long run it will have its impact on target groups like

farmers, youth and women. In some states the affluent farmers, today 'keep in

touch' with the latest information and maximise both ends. Animal feed producers

no longer look at Andhra Pradesh or Karnataka. They keep their cell phones

constantly connected to global markets. Surely, price movements and products'

availability in the international market seem to drive their local business strategies.

On youth its impact is on knowledge and information and while on women it still

depends on the socio-economic aspect.

Rising Rural Prosperity

Rural consumers have acquired importance as India is now seeing a

dramatic shift towards prosperity in rural households. Rural India with its traditional

perceptions has grown over the years, not only in terms of income but also in

terms of thinking. The purchasing power in rural India is on steady rise and it has

25

resulted in the growth of the rural markets. The market has been growing at 3-4

percent per annum adding more than one million consumers every year. According

to a study by the National Council for Applied Economic Research (NCAER), there

are as many middle incomes and above households in the rural areas as are in the

urban areas. Moreover, there are almost twice as many lower middle income

households in the rural areas as in the urban areas. At the highest income level

there are 2.3 million urban households against 1.6 million households in rural

areas. As per the NCAER projections, the number of middle income and high

income households in rural India was expected to grow from 80 million to 111

million by 2007. In urban India, the same is expected to grow from 46 million to 59

million. Thus, the absolute size of rural India is expected to be double that of urban

India. The rural households constitute 72.6 percent with a population of 74.6

percent while 27.4 percent constitute the urban households with a population of

25.4 percent.

Table 4 Percentage Distribution of Households

Source: Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Sector by S. John Mano Raj & Dr. P Selvaraj

Table 5 Income-wise Distribution of Population

2001-02 2006-07 Income groups

Total Rural No. % Total

Rural No. %

High 1.48 0.41 27.7 2.96 0.7 23.6

Middle 69.18 4.83 64.8 90.25 59.85 66.3

Low 32.29 29.52 91.42 20.41 95.8 95.7

Total 102.95 74.76 72.6 114.52 80.96 70.7

Source: NCAER cited in Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Sector by S. John Mano Raj & Dr. P Selvaraj

Area Households Population

Rural 72.6 74.6

Urban 27.4 25.4

All-India 100 100

26

Figure 3 Growth of Rural Population by Income Groups

Growth of Rural Population by Income Groups 27.7

64.8

91.4

2

72.6

23.6

66.3

95.7

70.7

0

20

40

60

80

100

120

High Middle Low Total

Income Groups

2001-02

2006-07

Figure 4 Growth in the Number of Rural Households

Growth in the number of rural households (%)

12

113

35

76

75

185

119

32-

51-

11-

2009-10 to 2015-16**

2004-05 to 2008-09

Upper-middle

Highest

Middle

Lowe-middle

Lowest

27

Figure 5

Age wise Growth of Rural Population

(All Figure in Million)

119. 5

233. 3

90. 7

82. 1

141. 9

104

73. 3

31. 1

70.6

108.5

239.1

0

109.0

0

90.2

0

156.6

0

121.6

0

85.7

0

26.4

0

62.3

0

0

50

100

150

200

250

300

0-4

5 t

o 1

4

15

to

19

20

to

24

25

to

34

35

to

44

45

to

54

55

to

59

60

+

Age Group

1996

2001

Source: Registrar General of India

Gone are the days when the rural consumer went to the nearby city to buy

branded products and services. The rural consumer is growing and the global

players in the market are trying to grasp the market share –whether it is into

FMCGs sector or retail sector. Some FMCG products like toothpaste, hair oil and

other like shampoos have done much better in rural areas than in the urban and

the semi urban areas. The estimated annual business from rural markets is around

1, 23000 crores, comprising 65000 crores of FMCG ` 5000 crores of durables, `

45000 crores of agricultural inputs including tractors and ` 8000 crores of two

wheeler and four wheelers. Similarly the retail sector has a huge potential for

growth and the opportunities in retail sector is expected to touch $43 billion by the

year 2010.

28

Growth of Rural Markets

In recent years rural markets have acquired significance in countries like

India and China as the overall growth of the economy has resulted into substantial

increase in the purchasing power of the rural community. On account of

globalization and liberalization the rural areas are consuming a large quantity of

industrial and urban manufactured products. Rural market has witnessed a high

demand both for products and services. For several product categories, rural

markets account for well over 60 percent of the national demand. It is the rural

segment of the market that contributes more profit than its urban counterparts. The

general impression is that only agricultural inputs like seeds, fertilizers, pesticides,

cattle feeds and agricultural machinery have a potential for growth in the rural

market. However, there is a growing market for consumer goods now. It has been

estimated that the rural market is growing at the rate of five times its urban

counterpart (Tables 6, 7, 8, 9, 10, 11 and Figure 7)

Table 6 Comparison of Average Rural and Urban Monthly Per capita

Consumer Expenditure of Major States in 2007-08

Average MPCE (`̀̀̀) State Rural Urban

Andhra Pradesh 816 1550

Assam 799 1452 Bihar 598 1080 Chhattisgarh 582 1503 Gujarat 875 1471

Haryana 1034 1628 Jharkhand 592 1395 Karnataka 819 1668 Kerala 1383 1948 Madhya Pradesh 634 1190

Maharashtra 868 1709 Orissa 559 1438 Punjab 1273 1633 Rajasthan 801 1265 Tamil Nadu 834 1410

Uttar Pradesh 680 1121 West Bengal 702 1452 All India 772 1472

Source: NSSO, Ministry of Statistics and Programme Implementation, Govt. of India, 2007

29

Table 7

Size of Rural Markets

States Market Size (Crores)

Rural population (Millions), 2001 Census

Market Size per Capita (`)

Gujarat 86,451 31,740,467 27,237

Tamilnadu 61,422 34,921,681 17,589

Madya Pradesh 51,102 44,380,878 11,514

Uttrakhand 14,796 6,310,275 23,447

Mizoram 773 447,567 17,271

Andhra Pradesh 130,611 55,401,067 23,576 Assam 36,880 23,216,288 15,885 Arunanchal Pradesh 1,831 870,087 21,044 Andman & Nicobar 623 239,954 25,963 Bihar 57,062 74,316,709 7,678 Chhttisgarh 33,859 16,648,056 20,338 Chandigarh 525 92,120 56,991 Delhi 4,944 944,727 52,333 Dadar & Nagar Haveli 349 170,027 20,526 Daman & Diu 545 100,856 54,037 Goa 4,292 677,091 63,389 Himachal Pradesh 18,404 5,482,319 33,570 Haryana 53,455 15,029,260 35,567 Jharkhand 37,721 20,952,088 18,003 Jammu & Kashmir 15,307 7,627,062 20,069 Kerala 60,327 23,574,449 25,590 Karnataka 70,044 34,889,033 20,076 Lakshadweep 349 170,027 20,526 Maharashtra 126,313 55,777,647 22,646 Manipur 3,845 1,590,820 24,170 Nagaland 4,078 1,647,249 24,756 Orissa 57,254 31,287,422 18,299 Punjab 39,867 16,096,488 24,768 Pondicherry 814 325,726 24,990 Rajasthan 62,082 42,292,813 14,340 Sikkim 1,278 480,981 26,571 Tripura 6,593 2,653,453 24,847 Uttar Pradesh 146,528 131,658,339 11,129 West Bengal 122,703 57,748,946 21,248 Source: Indicus analytics

30

Table 8 Average Monthly Expenditure per person (`) at Current Prices

(in `) Rural Urban

Years Fo

od

No

n-f

oo

d

To

tal

Fo

od

No

n-f

oo

d

To

tal

27th round (oct1972-sept 1973) 32.16 12.01 44.17 40.84 22.49 63.33

32th round (July 1977 to June 1978) 44.33 24.56 68.89 57.67 38.48 96.15

38th round (January 1983 to December 1983) 73.63 38.68 112.31 97.31 68.49 165.8

43rd round (July 1987 - June 1988) 100.82 57.28 158.1 139.73 110.18 249.91

50th round (July 1993 - June 1994) 177.8 103.6 281.4 250.3 207.7 458

55th round (July1999 to June 2000) 288.8 197.36 486.16 410.84 444.08 854.92

61th round (July 2004-June 2005) 307.6 251.19 558.79 447.14 604.95 1052.09

Source : Source: NSS Report No.508, Level and Pattern of Consumer expenditure, 2004-05

Figure 6

(a) (b)

Expenditure on Food Items

32.16 44.33

307.6

57.67

97.31

139.73

250.3

177.8

100.8273.63

288.8

40.84

410.84447.14

0

100

200

300

400

500

600

700

800

900

1000

27th

ro

un

d

32th

ro

un

d

38th

ro

un

d

43rd

ro

un

d

50th

ro

un

d

55th

ro

un

d

61th

ro

un

d

Exp

en

dit

ure

(R

s.)

Rural Urban

Expenditure on Non-Food Items

24.56

103.6

38.68

251.19

12.01

57.28

197.36

22.49 38.4868.49

110.18

207.7

444.08

604.95

0

100

200

300

400

500

600

700

800

900

1000

27

th r

ou

nd

32

th r

ou

nd

38

th r

ou

nd

43

rd r

ou

nd

50

th r

ou

nd

55

th r

ou

nd

61

th r

ou

nd

Exp

en

dit

ure

(R

s.)

Rural Urban

31

Table 9 Monthly Per capita Consumer expenditure (MPCE)

On Food & Non-food Item in Rural India (in %)

Expenditure as % of total consumer Expenditure

Items

19

72

-19

73

19

77

-78

19

83

19

87

-88

19

93

-19

94

19

99

-20

00

20

04

-20

05

Expenditure on Food 72.9 64.3 65.6 64 63.2 59.4 55

Expenditure on Non-food 27.1 35.7 34.4 36 36.8 40.6 45 Source: NSS Report No.508, Level and Pattern of Consumer expenditure, 2004-05

Figure 7 Monthly Per Capita Consumer Expenditure (MPCE) of Rural India

Source: NSS Report, 2005-2008

The share of food versus non food expenditure in the economy is one of the

measures of the extent of consumption sophistication in an economy. The NSS

data reveals that the share of expenditure in 2004-05 on food in rural India is still

55 percent of the total expenditure, while non-food expenditure is 45 percent. The

growth of food related expenditure has been much lower than the growth of non-

food expenditure. The increase in expenditure on non food items is much more

32

than food items. The monthly per capita expenditure on food in 1999-2000 was

288.8 which has increased to 307.6. The increase in MPCE was of 18.8. On the

other side MPCE on non-food was 197.36 in 1999-2000 which has increased to

251.19. The increase in MPCE was of 53.83. The fastest growing non- food

expenditure categories are education, healthcare. Consumer durables are another

category that is growing fast. Rural consumers are now opting for life improving

products & services of real quality or durables that enhance productivity and

increase earnings.

Table 10 Average monthly expenditure per person on Durable Goods

(in `) Years Rural Urban Total

27th round (oct1972-sept 1973) 0.95 1.4 2.35 32th round (July 1977 to June 1978) 4.82 8.55 13.37 38th round (January 1983 to December 1983) 2.6 4.55 7.15 43rd round (July 1987 - June 1988) 5.64 10.6 16.24 50th round (July 1993 - June 1994) 7.7 15.2 22.9 55th round (July1999 to June 2000) 12.76 30.85 43.61 61th round (July 2004-June 2005) 19.23 42.81 62.04

Source: Source: NSS Report No.508, Level and Pattern of Consumer expenditure, 2004-05

Figure 8

Expenditure on Durable Goods

0.954.82

2.65.64

7.7

12.768.55

4.55

10.6

15.2

30.85

19.23

42.81

1.4

0

10

20

30

40

50

60

70

27th

round

32th

round

38th

round

43rd

round

50th

round

55th

round

61th

round

Expenditure

(Rs.)

Urban

Rural

33

Table 11 Expenditure on Different Categories

(in % )

Items Rural Urban

Beverages 2.59 3.09 Cereals/cereal products & Substitutes 11.56 5.68 Clothing 4.75 3.56 Consumer Services excl. Conveyance 6.48 10.57 Consumer taxes and Cesses 0.39 1.34 Conveyance 6.63 9.96 Durable Goods 3.79 3.68 Edible Oil 2.95 1.94 Education 1.92 3.29 Egg, Fish and Meat 2.16 1.55 Entertainment 1.11 3.11 Footwear 0.51 0.42 Fruit 1.12 1.19 Fuel and light 18.28 15.87 Medical (institutional) 2.23 1.14 Medical (non-institutional) 5.92 4.21 Milk and Milk products 5.52 4.51 Paan, tobacco and intoxicants 1.7 0.91 Personal care and effects 0.55 0.53 Pulses and pulses products 2.06 1.28 Rent 0.94 9.19 Salt and spices 1.35 0.8 Sugar 149 0.84 Sundry articles 4.77 3.89 Toilet articles 5.09 4.38 Vegetables 4.14 2.79

Source: Indicus analytics, 2008

Moreover, the rural market is getting an importance because of the

saturation of the urban market. Due to competition in the urban markets, the

market is so saturated as most of the capacity of the purchasers has been targeted

by the marketers. The marketers are now looking for extending their product

categories to an unexplored market i.e., the rural market. The rural market has

been growing steadily since 1980’s and is now bigger than the urban market for

both FMCGs and consumer durables. An analysis of the NSS data reveals that 75

percent of the expenditure on manufactured goods is accounted by rural India.

34

Table 12 Where Rural Money Goes

Particulars Expenses (%)

Personal care 5.2

Groceries 34

Saving 3.1

Interest Payment 3.9

Jewellery 1.7

Agri Input 14

Household maintenance 2.5

Home textiles 0.5

Vehicles 5.2

Home appliance 0.3

Consumer Durables 1.6

Apparel & Footwear 8.1

Hard Liquor & Tobacco 2.3

Entertainment & Music 1.7

Fuel 6.4

Medicines & Healthcare 9.5 Source: KSA Technopak cited in Consumers and Consumer Protection by S.S. Kaptan

Figure 9

35

Table 13 Rural FMCG Market Projections

Source: NCAER cited in Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Secto by S. John Mano Raj & Dr. P Selvaraj

Figure 11

Source: NCAER cited in Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Secto by S. John Mano Raj & Dr. P Selvaraj

2001-02 2006-Projected Category Growth %

Total Rural Share

Total Rural Share

Rural market share %

Toilet soaps 13.4 9645 6021 18086 11291 62.4

Body Talcum Powder

23.65 1445 793 4237 2292 54.1

Toothpaste 23.5 3198 1441 9376 4140 45.1

Cooking oil 10.91 20946 15731 35295 25806 73.4

Vanaspati 7.63 4549 2846 6648 4108 62.6

36

Table 14 Indian FMCG market-Brand Penetration

Category Within category

(%) High Penetration Brand (Company)

Toilet soap 91 Life buoy(HLL) Washing cakes/Bar 88 wheel (HLL) Edible Oil 84 Double Iran Mustard Tea 77 Liptom Taaza(HLL) Washing poweder/Liquide 70 Nirma (Nirma) Salt 64 Tata salt (Tata) Biscuits 61 Parle G (Parle) Skin cream 58 Fair & Lovely (HLL) Talcum Poweder 65 Pond's (HLL) Source: www.estratagicmarketing.com

Trends indicate that the rural markets are coming up in a big way and

growing twice as fast as the urban, witnessing a rise in sales of hitherto typical

urban kitchen gadgets such as refrigerators, mixer-grinders and pressure cookers.

According to one estimates the money available to spend on FMCGs (Fast Moving

Consumer Goods) products by urban India is ` 49,500 crores as against is

` 63,500 crores in rural India. The study on ownership of goods indicates the same

trend. It segments durables under three groups - (1) necessary products -

Transistors, wristwatch and bicycle, (2) Emerging products - B&W TV and cassette

recorder, (3) Lifystyle products - CTV and refrigerators. Marketers have to depend

on rural India for the first two categories for growth and size. Even in lifestyle

products, rural India will be significant over next five years. (Table 15)

Table 15 Ownership of Durables by Rural Consumer

Product No. of Owners per 100 Households

Bicycle 53

Fan (Ceiling) 19

Fan(table) 13

T.V (B&W) 16

Pressure Cooker 13

Wristwatch 76

Radio/Transistor 42 Source: NCAER Reports

37

According to experts, the four factors which influence demand in rural India

are- access, attitude, awareness and affluence. Some companies have

successfully used this to influence the rural market for its shampoos in sachets.

The sachet strategy has proved so successful that, according to an ORG - MARG

data, 95 percent of total shampoo sales in rural India is by sachets. The company

had developed a direct access to markets through wholesale channel and created

awareness through media, demonstration and on ground contact. This changed

the attitude of the villagers. Today, the young and the educated in the villages are

already large in number and this number is increasing. Already, 40 percent of all

those graduating from colleges are rural youth. They are the decision makers and

are not very different in education, exposure, attitudes and aspirations from their

counterparts at least in smaller cities and town.

Myths about Rural Consumers

It is common for us to think of rural India as one aggregate mass of people

that behaves in the same way. The concept of homogeneity of rural consumer has

posed a serious problem in formulating appropriate strategies to protect the rural

consumers. Now this notion needs to be changed. Rural India should be

understood from different economic and socio-cultural segments that thrive in it.

Unlike the urban ones who are individualistic, rural consumers tend to make

decisions as a community. Communities of youth, women and professions are

important influences on particular buying decisions. The rural consumer is not

illiterate when it comes to his needs and buying decisions. He exhibits a strong

visual literacy and associates with brands through their “visual touch”.

Another myth is that the rural women do not play a role in decision-making.

However, empowerment of the women is also having its impact. Women in rural

India have come to enjoy increasing economic power and are a major influence in

the purchase of household articles particularly FMCG brands. They are perceived

as the custodian of the family’s health and hygiene. There is also a perception that

the rural consumer is only price- conscious, not quality conscious. But there is a

cost value perception in upper class rural consumers. Another myth is that they

38

aren’t loyal to brands. To them, logos and symbols represent a brand, which gives

rise to so many fakes. The biggest market for fakes is the rural market.

Exploitation of Rural Consumers

With the growth in rural markets and due to poor knowledge about their

rights and lack of skills to take a rational decision based on information about the

product or services, the rural consumers in India are being exploited in many ways.

The rural consumer has been made to endure sub-standard products and services,

adulterated foods, short weights and measures, spurious and hazardous drugs,

exorbitant prices, endemic shortages leading to black marketing and profiteering,

unfulfilled manufacturing guarantees and host of other ills. The rural consumers

who generally depend on weekly markets to purchase essential things are often

cheated due to lack of choice.

The rural consumers in India are generally ignorant and they are also

unorganized. Thus, they are exploited by the manufacturers, traders and the

service providers in different way. They are not only scattered but also diverse and

heterogeneous. As a result of globalization and liberalization the rural market in

India is the largest potential market in the world. Thus there are vast opportunities

for rural marketing. The manufactures and traders take advantage of the condition

of the rural consumers. It has been observed that the condition of the rural

consumers is deplorable because they are largely exploited in the rural markets on

account of lack of competition among the sellers. The rural consumers face various

problems like adulteration, short weighing and measuring, lack of safety and

quality control in appliances and equipments, electrical and mechanical, unfair

warranties and guarantees, imitation, sales gimmicks and unreasonable pricing.

Fake Brands and Spurious Products

One of the major problems being faced by the rural consumers is that of

fake brands and spurious products. The brand image of the successful FMCG

majors has been imitated by some of the small regional companies. These fake

brands have been sold mostly in rural areas. Fake products are of two types – one

counterfeit products and two pass - off products. Counterfeit products are fake

39

products that bear identical name of a product/packaging/graphics/colour scheme

and even same name and address as the genuine manufacturer. Some one

produces these to look exactly like real products other than the legal owner of the

real product, trademarks and product packaging. Sometimes it becomes difficult to

tell which the real product is. A rural consumer is brand loyal and understands

symbols better and this also becomes a problem as it is easy to misguide the rural

consumer. The FMCG industry alone has been facing loss of over ` 5,000 crore

per year, due to counterfeit products, of the ` 113,000-crore FMCG market in India.

Counterfeit products result in an annual loss of approximately ` 30,000 crore to the

industry and ` 15,000 crore to the Government exchequer. Pass- off products uses

similar sounding or is similar in spelling. They use similar type of packaging or

color or design. These are look-alike products that resemble the original products,

mainly through misspelling of the trademark. For example, Sunslik instead of

Sunsilk, Clemic Plus or Climic Plus or Cosmic Plus instead of Clinic Plus,

Collegiate for Colgate, Vips Rub or Vives Rub as a pass-off for Vicks Vaporub.

They come out with the motive to mislead and cheating ordinary consumers who

are uneducated or in a hurry in purchasing products.

A study conducted by AC Nelson, a leading research agency reveals that

FMCG industry loss is around ` 2500 crores annually to counterfeits and pass- off

products. It is also estimated that top brands in India are estimated to lose up to 30

percent of their business to fake products. Besides the loss of revenue, the trading

companies also face the loss of damage to brand image and brand loyalty to

consumers. Apart from the loss of revenue and brand image fake products cause

immense damage to consumer’s health. 10% of all major soft drinks sold are

spurious, while 10-30% of cosmetics, toiletries and packaged food are counterfeits.

Fake gold and precious metals are worth ` 60 billion in India.

Another interesting point is that FMCG counterfeit products only come in

smallest size of packing. In the rural segment where fake products thrive, the

consumer’s low purchasing power makes sachets and smaller packs popular. It is

in the case of these small packs that consumers are duped more easily as the

40

quantity is not large enough for the buyer to discern its quality. This is especially so

in sachets of shampoo, hair oils, and detergents and so on.

Misleading Advertisements and Role of Media

The media has a greater responsibility towards the vulnerable sections of

the society. The rural consumers are one such. Rural consumers today have

access to diverse media with the advent of modern technology. Advertising is the

major or even the main sources of information about many new products or newly

introduced products. The changes in advertising are in part a response to the rapid

growth in markets due to globalization. Due to the entry of a large number of

players in the rural market and also due to stiff competition there are large

numbers of misleading advertisements in the print and electronic media resulting

into exploitation of the consumers.

The advertising firms are studying consumer behaviors to design effective

communication strategies without caring for the welfare of the consumer. In most

parts of the rural areas in the country there is considerable awareness on various

latest products that are available in the market. This has been possible due to the

penetration of cable and satellite channels that have brought down the world at the

finger tips of the common man. The media has influenced the mindset of the rural

consumers to such an extent that people who have money start purchasing the

products unmindful of the costs, just to satisfy their needs as well as their ego.

The problem is that there are no effective sanctions against misleading

advertisements. What needs to be emphasized is that the poor, uneducated

consumers in the rural areas are most likely to be harmed. More generally, as a

recent World Development Report rightly emphasized, ‘information problems are

often at the core of the difficulties that poor people in developing countries

encounter in their daily struggle to survive and to improve their lives”.

The government and its various agencies need to counter the misleading

claims of the producers/ service providers. Jago Grahak Jago is an important

mean to communicate with the consumers. However, to communicate effectively

41

with the rural audiences, we need to move 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. Moreover, we also need

to have an effective regulator for advertisements so that the consumers are not

misled by claims and counter-claims.

The Consumer Protection Act, 1986 gives a comprehensive definition of

unfair trade practice. The consumer courts have given some excellent orders in

this area, but they cannot deal with misleading advertisements like the MRTPC as

the consumer court neither has the power nor the infrastructure to investigate, suo

motu into misleading advertisements nor take up such cases on their own as was

done by the MRTPC. The ASCI also has not been an effective regulator. Now that

MRTPC has ceased to exist, we need to think of some mechanism to check

misleading advertisements.

Sum up

The NGOs have an important role to play in consumer education and

empowerment. However, the task is gigantic and therefore, it is time to involve the

PRIs to reach the rural consumers. The meetings of the Gram sabhas can be

utilized as a forum to educate the consumers about their rights and obligations and

enhance their knowledge about fake and spurious products. An integrated

approach is needed to empower the rural consumers. As the largest consumer

base is in the rural areas, protecting the rural consumer has to be a priority in any

strategy to protect the consumers.

42

References

1. S.John Mano Raj and P. Selvaraj; “Social Changes and the Growth of

Indian Rural Markets: An Invitation to FMCG”, International Marketing Conference on Marketing and Society, April 8-10, 2007, IIM, Kozhikode

2. Sutirtho Patronobis,. “HT Nation, Monday”, October 15, 2007, New Delhi. 3. Sarangapani A, A Textbook on rural Consumer Behaviour in India- A Study

on FMCGs, University Press, 2009, New Delhi 4. Venkatesh Tamlurkar; “Assessing the Marketing for Rural India”,

www.indianmba.com/Faculty 5. Preeti Mehra; “Crusade against Counterfeit”, Business Line, Monday, July

02, 2001 6. Ambi M.G.Parameswaran; “The Great Indian Rural Consumer”, Business

Standard, Feb 15, 2008, New Delhi 7. D.K.Bose; “Marketing in Rural India”, Horizon07. Oct 7,2007, IIM Kozhikode 8. K.V.kannan; “Strategies for Chocolate Companies to Kill Fake Products in

Indian Rural Market”, www,indianmba.com/Faculty 9. Pushma Girimaji; Misleading Advertisements and Consumer, IIPA, New

Delhi, 2008 10. Kaptan S.S, Rural Consumer and Consumer Protection, Sarup & Sons

Publication, 2004 (pp 19, 83), New Delhi 11. Ambi M.G.Parameswaran; “The Great Indian Rural Consumer”, Business

Standard, Feb 15, 2008, New Delhi

43

CHAPTER III

Level of Awareness among Rural Consumers

Economic liberalization along with the rise in rural prosperity has opened the

flood gates for rural markets. The rural market is growing fast and touching the

lives of millions of the rural consumers. The rising prosperity in the rural areas and

the impact of media penetration has opened up the rural market for the

multinational companies and other producers. A range of products and services

are available to the rural consumers. However, due to ignorance and lack of

information the rural consumer has to endure with sub-standard products and

services, adulterated foods, short weights and measures, spurious and hazardous

drugs, and exorbitant prices along with unfulfilled manufacturing guarantees and

host of other ills. In a market driven economy like ours, the aspirations of the

consumers including the rural consumers is on the rise due to a number of

reasons. Today the rural consumers are being lured by advertisements which do

not really educate the consumer nor provides information to them but only exploit

his ignorance and in the process we forget that the consumer is an important

component of society and every business has an obligation to him/her. The

marketers resort to all sorts of tactics to cheat the consumers especially when the

goods are short in supply in the market. High prices are charged by the producers

and consumers have no choice other than to purchase what is available.

Therefore, the consumer is to be protected from unsafe products, poor quality of

goods and services, high prices, unfair trade practices and misleading

advertisements. The best way to empower the consumers is to educate them and

enhance their awareness, therefore if the consumers are to be protected it is

necessary to educate the consumers and make them aware about the various

mechanisms available to them so that they are able to make a rational decision

while making a purchase.

The welfare of the consumers lies in the fulfilment of their normal and

legitimate expectation with regards to the goods they purchases and the services

they avail. In a country like India where all the consumer protection laws are in

44

place, the consumers are not really aware of them and the mechanism in place to

redress their grievances. Those who know the laws know that the process is very

slow and has become cumbersome. There are a number of steps taken to protect

the rural consumer but without much impact due to the prevailing socio economic

conditions of the rural consumers. They generally base their purchasing decisions

on the advertisement campaigns and promotional strategies employed by the

organizations and also lack of choice.

Consumers are exploited when they are cheated in any form or when not

informed adequately about the product. Consumer exploitation is in many ways.

They may be exploited by giving incomplete or wrong information. They may be

exploited by sellers who may weigh less or measure wrongly. Sometimes, a

consumer may be given low quality of goods. One of the very common and a

serious problem by which a consumer may be exploited and cheated by the shop-

keeper is by providing impure or adulterated goods with harmful substances. Food

adulteration is a serious problem in the rural markets where the administrative

machinery is not able to tackle this menace. As far as the service sector is

concerned a large number of complaints regarding medical services, banking,

insurance and electricity go unreported as the consumer is unaware of the

redressal mechanism. Cases of medical negligence are common in the rural areas

but then the consumer has no choice.

Consumers not only pay their hard earned money, but also have to undergo

the trauma of suffering from ill health and in some cases even risking their lives

due to spurious products. It is quite common that the rural consumers are unaware

about maximum retail price, expiry and manufacturing date and other information

that is to be provided on the products due to ignorance and illiteracy. The

consumers are at risk with such market practices. Sometimes the producers may

deliberately conceal information and circumstances in which the product must be

used or the accompanying devices to be used with the product or circumstances

during which a product would not work. In such situations the consumers feel

helpless and trapped.

45

There are many factors leading the consumer exploitation in rural areas.

Illiteracy and ignorance is just one of the many causes of exploitation. Illiterate

consumers can easily be cheated as they can neither read the name of the product

nor the instructions. Illiteracy also affects the level of consumer awareness. Lack of

information is another cause as the seller may take advantage of the freedom of

the market and keep away, the important or correct information from the consumer.

Price, composition, quantity, conditions of use, and terms of purchase all must be

given to the consumer. Monopoly is also a cause of consumer exploitation as the

consumers are forced to purchase the product or avail the services. In markets

where only one or few producers or sellers operate, the consumer is more

vulnerable. This is all the more so in case of essential commodities like life saving

drugs and food items without which the consumers cannot do. The consumers in

such areas are charged with high price; given a low quality and their problems and

complaints are not taken seriously. An economy, in which consumers are aware

and exercise their rights and obligations freely, will not only help the business but

also enable the economy and the society to flourish. An overall picture emerges

that it is due to lack of consumer education and awareness that consumers

continue to be exploited. We need to device new strategies to protect the rural

consumer

The study attempts to find out the level of awareness among the rural

consumers on various initiatives prevailing in the markets and also explore the

ignorance of the consumers relating to their basic rights and obligations. It also

examines the buying behaviour and the market practices of the rural consumers.

Socio-economic Profile of the Respondents

Sex, Educational Status and Age Profile

The socio- economic profiles of the respondents covered are from various

strata of the society so as to make it a representative sample. Males constituted

68.6 of the sample size whereas 31.5 percent were females. As far as the

educational level of the respondents is concerned, 23.1 percent had no schooling,

17.9 percent of them had attended school up to the primary level, 26 percent had

46

middle schooling, 16.3 percent had studied up to high school, 10.3 percent had

schooling up to intermediate level and 6.6 percent were Graduates. Post graduates

and Professionals consisted of 1 percent of the respondents. As far as the age is

concerned, only 1.6 percent of the respondents were below 20 years of age. 23.7

percent belonged to the age group between 20 -30 years, 38.5 were from the age

group of 30-40 years, 22.6 percent were within 40-50 years of age and 13.7

percent of the respondents were above 50 years of age. (Table 1)

Table 1

Sex, Education Status and Age Profile of the Respondents

Sex Educational Status Age States

Ma

le

Fe

ma

le

No

Sc

ho

olin

g

Pri

ma

ry

Mid

dle

Hig

h S

ch

oo

l

Inte

rme

dia

te

Gra

du

ati

on

PG

/Pro

fes

sio

na

l

Be

low

20

20

-30

30

-40

40

-50

Ab

ov

e 5

0

Uttarakhand 64.8 35.3 19.3 12.5 23.5 15.0 18.3 9.8 1.8 2.5 22.0 29.5 24.0 22.0

M.P 72.8 27.3 28.8 19.5 24.5 14.3 7.0 5.0 1.0 1.3 28.8 35.8 21.0 13.3

Gujarat 79.5 20.5 14.8 20.8 29.8 17.0 12.0 5.0 0.8 0.3 22.8 49.0 21.3 6.8

Meghalaya 72.3 27.8 17.8 25.3 29.5 16.8 8.8 1.8 0.3 1.3 19.3 49.5 22.5 7.5

Tamilnadu 53.5 46.5 34.8 11.3 22.8 18.3 5.3 6.8 1.0 2.8 25.8 28.5 24.3 18.8

Total 68.6 31.5 23.1 17.9 26.0 16.3 10.3 5.7 1.0 1.6 23.7 38.5 22.6 13.7 Source: Field survey

Figure 1

Sex, Education Status and Age Profile of the Respondents (total sample)

47

Occupational Structure of the Respondents

As far as their occupational status is concerned, owner/cultivators

constituted 9.9 percent of the respondents while marginal farmers constituted 16.2

percent. The major segment of the respondents, which is 25 percent consisted of

labourers. Among the respondents, self employed constituted 12.9 percent,

unemployed 13.8 percent and housewives 13.8 percent.

Table 2

Occupation of the Respondents

(in %)

Occupation Uttarakhand M.P Gujarat Meghalaya Tamilnadu Total

Owner/Cultivator 17.0 14.8 6.8 5.5 5.3 9.9

Marginal Farmers 11.8 25.3 20.8 13.8 9.5 16.2

Labour 15.0 25.5 16.5 27.5 40.5 25.0

Tenant/Share croppers 0.8 0.5 4.8 0.3 0.8 1.4

Traders/Shopkeeper 1.5 1.5 7.5 11.0 2.8 4.9

Self Employed 10.5 7.5 16.8 19.3 10.3 12.9

Government Employee 13.8 3.0 5.3 1.8 3.8 5.5

Teacher 2.3 2.3 0.5 1.3 3.0 1.9

Crafts man 0.5 1.0 2.3 4.3 0.0 1.6

Unemployed 8.5 1.8 1.5 4.3 5.5 4.3

Housewife 17.5 14.5 13.0 10.8 13.3 13.8

Others 1.0 2.5 4.5 0.5 5.5 2.8 Source: Field survey

Figure 2

Respondents’ Occupation (total)

48

Annual Income of the Respondents

The purchasing power of an individual depends upon his income. In the era

of globalization and liberalization the market is very tempting therefore it is

important to know the annual income of the respondents. The survey revealed that

majority of the respondents (44.4) percent had an annual income of less than `

24,000. The group with annual income between ` 24, 000 - 60,000 consisted of

40.1 percent. 11.4 percent of the respondents had income between 60,000 –

1,20,000. Those whose income was above ` 1, 20, 000 constituted 4.15 percent of

the sample size. (Table 3)

Table 3 Annual Income of the Respondent

(in %) Sates Below

` 24,000 ` 24,000/ to

60,000 ` 60,000/- to

1,20,000/-

Above ` 1,20,000

Uttarakhand 47.5 30.5 12.0 10.0 M.P 54.4 35.3 8.8 1.5 Gujarat 28.5 46.0 21.2 4.3 Meghalaya 16.0 73.5 9.0 1.5 Tamilnadu 75.5 15.0 6.0 3.5 Total 44.4 40.1 11.4 4.2

Source: Field survey

Monthly Expenditure of the Respondents

As far as the monthly expenditure of the respondents is concerned, 43.5

percent spent below ` 2,000, 45 percent spent between ` 2,000 to 5,000, 8.45

percent of the respondents’ expenditure was between ` 5,000 to 10,000. Those

whose expenditure was above ` 10,000 constituted 2.6 percent of the sample size.

Table 4 Monthly Expenditure of the Respondents

(in %) States Below

` 2000 ` 2000 to 5,000

` 5,000 to 10,000

Above ` 10,000

Uttarakhand 48.3 30.3 16.3 5.3 M.P 53.0 40.5 5.0 1.5 Gujarat 28.3 56.5 11.8 3.5 Meghalaya 16.3 80.8 1.8 1.3 Tamilnadu 71.8 19.3 7.5 1.5 Total 43.5 45.5 8.5 2.6

Source: Field survey

49

Figure 3 Income & Expenditure wise Distribution of Respondents (total)

Monthly Expenditure (%) Annual Income (%)

Purchase of Daily Goods

The rural consumers have little option while purchasing goods of daily use.

The relationship between the rural consumer and the shopkeeper is of a different

nature as they live in the same village. It’s more of a loyalty and trust and if a

product is not good the shopkeeper generally tends to change it and there is no

dispute between the two. The rural consumer prefers to purchase his daily needs

from the same shop even if the items purchased are not good, but the shopkeeper

agrees to change it or refund the amount. It is also a fact that many rural

consumers particularly the poor purchase on credit. Therefore they stick to one

shopkeeper who gives goods on credit. Even though they are not satisfied with the

products they purchase from him, they have no alternative as they have no choice.

The consumer does not like to file a complaint or take up the matter with

appropriate authorities, as the shopkeepers generally redress their grievances.

Moreover, the rural consumer thinks that it is a waste of time and money to fight

with the shopkeepers. Table 5 indicates the place of purchase of goods of daily

use by the respondents according to the level of income.

50

Table 5

Purchase of Daily Goods as per Monthly Expenditure

Monthly Expenditure States

Place Below

` 2000 ` 2000 to

5,000

` 5,000 to

10,000

Above ` 10,000

Village Shop 3.1 0.8 1.5 4.8

Weekly market/Local Haat 68.4 38.8 27.7 28.6

Nearby kasba/town 17.6 39.7 29.2 33.3

Utt

ara

nc

ha

l

City 10.9 20.7 41.5 33.3

Village Shop 11.8 1.9 15.0 0.0

Weekly market/Local Haat 62.7 42.6 0.0 0.0

Nearby kasba/town 24.5 45.7 45.0 16.7

M.P

City 0.9 9.9 40.0 83.3

Village Shop 50.4 9.7 8.5 0.0

Weekly market/Local Haat 23.9 18.1 31.9 7.1

Nearby kasba/town 23.0 62.8 48.9 28.6

Gu

jara

t

City 2.7 9.3 10.6 64.3

Village Shop 6.2 4.0 14.3 0.0

Weekly market/Local Haat 63.1 38.4 28.6 20.0

Nearby kasba/town 29.2 53.6 14.3 40.0

Me

gh

ala

ya

City 1.5 4.0 42.9 40.0

Village Shop 66.6 31.2 23.3 0.0

Weekly market/Local Haat 7.3 1.3 0.0 0.0

Nearby kasba/town 12.9 23.4 16.7 33.3

Tam

iln

ad

u

City 13.2 44.2 60.0 66.7

Village Shop 32.53 6.93 9.47 1.92

Weekly market/Local Haat 40.69 31.02 20.71 15.38

Near by kasba/town 19.31 50.06 33.73 30.77

To

tal

City 7.47 11.99 36.09 51.92 Source: Field survey

51

Figure 4

Place of Purchasing Daily Goods as per Monthly Expenditure

Source: Field Survey

It is clear that there is a mixed response as far as purchase of daily Goods

is concerned. However a major chunk of the respondents (34.8 percent) preferred

nearby town for shopping and equal number (34 percent) preferred weekly market

or local haat for their daily needs (Table 6).

Table 6

Place of Purchasing Daily Goods

(In %)

States Village Shop

Weekly market/Local

Haat

Nearby Kasba/town

City

Uttarakhand 2.3 50.8 27.0 20.0

M.P 7.8 50.5 34.0 7.8

Gujarat 20.8 21.0 48.8 9.5

Meghalaya 4.5 42.0 48.8 4.8

Tamilnadu 55.5 5.5 15.5 23.5

Total 18.15 34.0 34.8 13.1 Source: Field survey

52

Figure 5

Place of Purchasing Daily Goods

Source: Field survey

Table 6 further indicates that in Uttarakhand most of the respondents (50.8

percent) prefer to purchase goods of daily use from the weekly market or the local

haats, 27 percent purchase them from the nearby kasba or the towns while 20

percent buy goods of daily use from the city. In Madhya Pradesh also the trend is

similar as most of them purchase goods of daily use from the weekly market or the

local haat (50.5 percent). 34 percent purchase goods from the nearby kasba or the

local town and very few of them (7.8 percent) purchase goods of daily use from the

citiy. On the other hand in Gujarat nearly 21 percent of the respondents purchase

their items of daily use from the village shops and almost the same percent of the

respondents purchase their goods from the weekly market or the local haat. 48.8

percent purchase goods of daily use from the nearby kasba or the town and

dependence on the city for daily needs is very limited. In Maghalaya on the other

hand 42 percent of the respondents purchase their items of daily use from the

weekly market or the local haat and 48.8 percent depend on the nearby kasba or

the town for their daily needs.

53

The survey revealed an interesting pattern as far as Tamil Nadu is

concerned. The village shops seem to be better organized as 55.5 percent of the

respondents prefer to purchase their daily needs from the village shop itself and do

not depend on the weekly market or the local haat to a large extent. 15.5. percent

depend on the nearby kasba/ town and 23.5 percent purchase items of daily need

from the city. According to the Table 6, only 18.15 percent of the total respondents

purchase their goods of daily use from the village shop, 34 percent from the weekly

market or the local haat, 34.8 percent from the nearby towns and only 13.1 percent

of them purchase from the city.

Consumer Satisfaction: Goods and Services

With the rise in the purchasing power due to the growing prosperity in the

rural areas of the country, the rural consumer has come to purchase a variety of

goods and also avail a number of services. The service sector like banking,

insurance, electricity, postal, healthcare are growing and the strategy of the service

providers is to reach the rural population. As far as FMCG goods are concerned,

according to estimates the rural market is worth ` 65000 crores and multinationals

are making strategies to tap this market to target the rural consumers. Products

like shampoo, soaps, cosmetics and other packed commodities of daily use are

now available in the rural markets. Many of these products are look alikes and

spurious and do not conform to the quality standards.

54

Figure 6 Consumers’ Satisfaction: Goods & Services

(Total percentage of five states)

No Response

Not at All

Some Extent

Fully Satisfied

No Response 1.9 1.7 5.2 68.4 42.8 21.2 25.3 39.5 76.1 63.8 63.7 61.8

Not at All 57.1 51.6 51.3 14.7 24.2 31.7 31.4 29.2 10.0 14.2 16.2 17.1

Some Extent 27.4 28.2 25.3 10.0 17.6 14.2 21.7 18.6 11.5 18.5 17.6 19.2

Fully Satisf ied 13.6 18.5 18.2 6.8 15.3 33.0 21.6 12.7 2.4 3.4 2.6 2.0

FMCG

products

Health

Services Education Insurance

Banking &

Finance

Water/Ele

ctricityPostal Telephone

Agricultur

e

Machineri

Fertilizers Seeds Pesticides

Source: Field survey

As far as the FMCG products are concerned 13.6 percent of the

respondents are fully satisfied with the quality of goods and 27.4 percent are

satisfied only to some extent. A large percentage of 57.1 percent are not at all

satisfied. In the service sector 18.5 percent of the respondents are fully satisfied

with the health services while 51.6 percent are not satisfied at all. Similar is the

case with education services. Very few had insurance cover therefore no response

is very high. However satisfaction level with water/electricity, postal services is not

very encouraging. An overall assessment reveals that there is more of

dissatisfaction with the consumer goods and services in the rural areas.

In Uttarakhand as far as satisfaction with the FMCG products is concerned,

only 4.3 percent were fully satisfied whereas 88 percent were satisfied only to

some extent. As far as the services are concerned, 87 percent of the respondents

were satisfied to some extent with health services, 77 percent with educational

services, 24 percent with insurance, 26.8 percent with banking, 33.5 percent with

electricity, 29.8 percent with postal and 27.5 percent with telephone services

respectively (See table 7).

55

The satisfaction level was not much different in the state of Madhya

Pradesh. 73 percent of the respondents were satisfied with FMCG products only

to some extent. With health services 73.8 percent, education 65.3 percent,

insurance 10.3 percent, banking 23.3 percent. The response has been low as

many of them do not avail these services. A Large percent of the respondents

(52.8 percent) were not satisfied with the services relating to electricity. The other

variations relate to fertilizes, seeds and pesticides where most of the respondents

were satisfied to some extent. It is interesting to note that in Gujarat satisfaction

level with the services was much higher. 37 percent of the respondents were fully

satisfied with the FMCG products while 59 percent were satisfied to some extent.

Agriculture is the main occupation in rural India. Most of the rural people

own land and do cultivation. Therefore, it is pertinent to know about the quality of

the agriculture services being availed by the rural people. On questions relating to

these services, only a few of them responded as most of them were unaware of

the quality and other related issues. 12.8 percent were not satisfied with the

services relating to the agricultural machinery. As far as fertilizers were concerned

only 24.8 percent were satisfied to some extent. Similar was in the case of seeds

(24.5 percent) and pesticides (29 percent) respectively.

As far as the service sector is concerned, 35.5 percent were fully satisfied

while 64 percent were satisfied to some extent with the health services. Similar is

the case with education services where 35.5 percentage were fully satisfied and

53.5 percent were satisfied to some extent. The satisfaction level was higher with

banking services. In Gujarat the satisfaction level with electricity was quite high

where 58.3 percent were fully satisfied and 33.8 percent were satisfied to some

extent. Even in the case of postal service and telephone the satisfaction level was

higher. However, as far as agriculture related services were concerned the

response has been less. 29 percent were satisfied to some extent as far as

fertilizer was concerned, 23 percent with seeds and 26.8 with pesticides

respectively.

56

In case of Meghalaya, 21 percent of the respondents were fully satisfied

with the FMCG products while 73.8 percent were satisfied to some extent. As far

as health services were concerned, 20.3 percent were fully satisfied and 65.5

percent were satisfied to some extent. Similar was the case with education, where

21.3 percent were fully satisfied and 69.8 percent were satisfied to some extent.

However, in the case of insurance 21 percent of the respondents were not at all

satisfied while only 11 percent of the respondents were satisfied to some extent.

61.5 percent of the respondents were satisfied to some extent with banking

services. In Electricity 56.5 percent, postal 61.3 percent and telephone services 42

percent of the respondents were satisfied to some extent. The response has been

less as far as services relating to agriculture and allied services were concerned.

As far as Tamil Nadu is concerned, 40.7 percent of the respondents were

fully satisfied with the FMCG products, while 50 percent were satisfied to some

extent. As far as services were concerned, 32.8 percent were fully satisfied with

the health services, 38.5 with education, 20 percent with insurance, 18.3 percent

with banking, 57.8 percent with electricity and 76.8 percent with postal services

respectively. On the other hand the dissatisfaction level is very prominent. 35.3

percent of the respondents were not satisfied with insurance, 35.3 with banking

and 23.8 percent with health services respectively. The level of satisfaction was

higher as far as agriculture and allied services were concerned when compared

with other states selected for the study. 16.3 percent were fully satisfied with the

fertilizers and 18 percent with the seeds supplied (Table 7).

The study also revealed that in the five states under study, except Tamil

Nadu and Gujarat more people are less satisfied with the services provided as

mentioned in the table. During the discussions in the field it was also found that not

many of the rural people knew about what constitutes a deficiency of service. Even

if they have to go to a bank a number of times to avail a service they did not mind it

and were not unhappy with the situation as a city dweller would be. Perhaps in the

rural areas the concept of time was not so important.

57

Table 7: Consumers’ Satisfaction: Goods & Services

(in %)

Uttarakhand M.P Gujarat Meghalaya Tamilnadu

Goods & Services F

ully

Sa

tis

fied

So

me

Ex

ten

t

No

t a

t A

ll

No

Re

sp

on

se

Fu

lly S

ati

sfie

d

So

me

Ex

ten

t

No

t a

t A

ll

No

Re

sp

on

se

Fu

lly S

ati

sfie

d

So

me

Ex

ten

t

No

t a

t A

ll

No

Re

sp

on

se

Fu

lly S

ati

sfie

d

So

me

Ex

ten

t

No

t a

t A

ll

No

Re

sp

on

se

Fu

lly S

ati

sfie

d

So

me

Ex

ten

t

No

t a

t A

ll

No

Re

sp

on

se

FMCG Products 4.3 88.0 5.0 2.8 11.5 73.0 11.5 4.0 37.0 59.0 4.0 0.0 21.0 73.8 2.5 2.8 40.3 50.0 7.5 2.3 Health Services 6.8 87.0 3.0 3.3 16.8 73.8 5.0 4.5 35.5 64.0 0.5 0.0 20.3 65.5 13.5 0.8 32.8 43.3 23.8 0.3 Education 7.0 77.0 1.5 14.5 18.8 65.3 6.3 9.8 33.5 53.5 12.8 0.3 21.3 69.8 8.3 0.8 38.5 38.8 22.3 0.5 Insurance 1.8 24.0 0.0 74.3 7.0 10.3 9.0 73.8 12.3 13.5 10.0 64.3 21.0 11.0 0.0 68.0 20.0 38.0 35.3 6.8 Banking Services 4.3 26.8 0.5 68.5 12.3 23.3 0.8 63.8 38.0 35.3 0.3 26.5 6.5 61.5 2.8 29.3 18.3 40.5 35.3 6.0 Electricity 1.5 33.5 10.0 55.0 52.8 4.8 6.5 36.0 58.3 33.8 5.5 2.5 16.8 56.5 17.0 9.8 57.8 29.3 12.0 1.0 Postal 13.5 29.8 1.3 55.5 18.0 32.5 3.8 45.8 40.8 54.3 1.0 4.0 17.5 61.3 3.8 17.5 67.8 22.8 8.5 1.0 Telephone 0.8 27.5 4.3 67.5 7.0 19.5 12.8 60.8 32.5 47.5 3.0 17.0 13.5 42.0 9.3 35.3 60.3 20.3 16.3 3.3 Agro-Machineries 0.3 12.8 0.0 87.0 0.5 24.3 0.3 75.0 6.0 18.0 0.0 76.0 2.0 11.0 0.8 86.3 13.3 23.3 9.8 53.8 Fertilizers 1.0 24.8 0.5 73.8 2.0 38.3 5.0 54.8 7.5 29.0 1.3 62.3 2.0 12.0 0.0 86.0 16.3 16.8 11.8 55.3 Seeds 1.3 24.5 3.0 71.3 2.0 38.5 4.0 55.5 5.3 23.5 7.8 63.5 2.0 11.5 2.0 84.5 18.0 16.8 9.5 55.8 Pesticides 1.0 29.0 3.5 66.5 2.8 34.0 11.5 51.8 4.5 26.8 6.3 62.5 0.0 14.5 0.0 85.5 9.3 22.3 12.3 56.3

58

Inquiry into Terms and Conditions before making Transaction

One of the major problems relates to consumer education and

awareness. Consumers generally do not seek information about the product

they intend to buy or avail a service. Having full information about the product or

service helps a consumer to take a rational decision and make a choice. It in

fact protects them as there are a number of terms and conditions which are

unfair. In Uttarakhand 40.8 percent of the respondents did not bother to find out

the terms and conditions before making the transaction. It is 56 percent in

Madhya Pradesh, 57 percent in Gujarat, 84.3 percent in Meghalaya and 52

percent in Tamil Nadu respectively (Table 8).

Table 8

Inquire about Terms & Conditions before Purchasing Products or Availing Services

(in%)

States Yes Sometimes No

Uttarakhand 27.8 31.5 40.8

Madhya Pradesh 18.0 26.0 56.0

Gujarat 21.5 21.5 57.0

Meghalaya 4.0 11.8 84.3

Tamilnadu 23.5 24.5 52.0

Total 19.0 23.1 58.0 Source: Field survey

Figure 7

Inquire about Terms & Condition (total)

Source: Field survey

59

More than half of the respondents (58 percent) did not make any inquiry

into the terms and conditions before purchasing goods or availing services, 23.1

percent inquired about it sometimes and only 19.0 percent inquired frequently

(Table 8). In Uttarakhand only 27.8 percent and Gujarat 21.5 percent of the

respondents actually inquired about the terms and conditions, while it was 18

percent in Madhya Pradesh. In Meghalaya just 4 percent inquired about the

terms and conditions before making a transaction while 84.3 percent did not

bother to know about the terms and conditions. 31.5 percent of respondents in

Uttarakhand, 26 percent in Madhya Pradesh, 21 percent in Gujarat, 11.8

percent in Meghalaya and 24.5 percent of the respondents in Tamil Nadu

inquired about the terms and conditions before making a purchase. The

dependence on the local shop keeper or the representatives of the service

provider is very high as most of them belong to the same area and know each

other. It has more to do with faith and trust. The other factor relates to

ignorance about various consumer rights and lack of literacy. As far as the

relationship with the level of education is concerned, the study indicates that

people who have attained some education are more aware about what they

intend to purchase and inquire about the terms and conditions before making a

purchase. According to the Table 9, only 7.7 percent of the respondents who

have not attended school inquired into the terms and conditions before

purchasing a product or availing a service. On the other hand 63.3 percent of

the graduate respondents sought information before purchasing goods or

availing a service.

60

Table 9

Inquire about Terms & Condition of Transaction before Purchasing Products or Availing Services (Impact of Education Level)

(In %)

States

Re

sp

on

se

No

Sc

ho

oli

ng

Pri

ma

ry

Mid

dle

Hig

h S

ch

oo

l

Inte

rme

dia

te

Gra

du

ati

on

PG

/Pro

fess

i

on

al

To

tal

Yes 3.9 2.0 30.9 35.0 45.2 52.2 57.1 27.8 Sometimes 22.1 30.0 33.0 33.3 30.1 45.7 14.3 31.5 Uttarakhand

No 74.0 68.0 36.2 31.7 24.7 2.2 28.6 40.8

Yes 1.7 2.6 22.4 36.8 28.6 70.8 75.0 18.0 Sometimes 14.8 28.2 36.7 21.1 39.3 25.0 25.0 26.0 M.P

No 83.5 69.2 40.8 42.1 32.1 4.2 0.0 56.0

Yes 1.7 1.2 23.5 36.8 31.3 69.6 66.7 21.5 Sometimes 15.3 16.9 29.4 20.6 20.8 17.4 0.0 21.5 Gujarat

No 83.1 81.9 47.1 42.6 47.9 13.0 33.3 57.0

Yes 0.0 0.0 1.7 4.5 17.1 62.5 100.0 4.0 Sometimes 2.8 3.0 17.8 22.4 8.6 37.5 0.0 11.8 Meghalaya

No 97.2 97.0 80.5 73.1 74.3 0.0 0.0 84.3

Yes 11.5 11.1 28.6 23.3 52.4 61.3 50.0 23.5 Sometimes 25.9 31.1 29.7 19.2 9.5 16.1 25.0 24.5

Tamilnadu No 62.6 57.8 41.8 57.5 38.1 22.6 25.0 52.0

Yes 4.8 2.5 20.6 26.8 35.6 61.4 63.2 19.0

Sometimes 17.6 19.0 28.8 23.1 23.4 29.5 15.8 23.1

Total

No 77.7 78.4 50.6 50.2 41.0 9.1 21.1 58.0 Source: Field survey

Insistence on Cash Memo

When a purchase is made or a service availed it is important for the

consumer to take a proper cash memo or a receipt as a proof of the transaction

made and also for future need. The cash memo is an important document if one

has to file a complaint. It is obligatory on the part of the consumer to take a

proper cash memo and it is also the duty of the shopkeeper or the service

provider to give a cash memo. Moreover, not taking a cash memo amounts to a

loss to the public exchequer in terms of taxes. However, in general it has been

observed that unless the cost of transaction is very high the consumer does not

bother to take a cash memo and this situation is more prevalent in the rural

areas.

Among the sample respondents only 11.8 percent in Uttarakhand, 11.3

percent in Madhya Pradesh, 16.3 percent in Gujarat, 3.3 percent in Meghalaya

61

and 18.8 percent in Tamil Nadu actually insisted on taking a cash memo (Table

10). The percentage of consumers who insist on the cash memo sometimes is

not much different than those who insist on the cash memo. The percent age of

consumers who do not insist on cash memo is quite high in all the states. It is

73.8 percent in Uttarakhand, 78.8 percent in Madhya Pradesh, 65.8 percent in

Gujarat, 88 percent in Meghalaya and 60 percent in Tamil Nadu respectively.

On the other hand 14.5 percent in Uttarakhand, 10.0 percent in Madhya

Pradesh, 18 percent in Gujarat, 8.8 percent in Meghalaya and 21.3 percent in

Tamil Nadu insisted on the cash memo sometimes. Thus among the total

sample respondents only 17.8 percent of the respondents always insisted on

taking a cash memo, 31.5 percent sometimes and more than half (50.8 percent)

never asked for cash memo. (Figure 8)

Table 10 Insistence on Cash Memo while Purchasing Durables

(in %)

States Yes Sometimes No

Uttarakhand 11.8 14.5 73.8

Madhya Pradesh 11.3 10.0 78.8

Gujarat 16.3 18.0 65.8

Meghalaya 3.3 8.8 88.0

Tamilnadu 18.8 21.3 60.0

Total 17.8 31.5 50.8 Source: Field survey

Figure 8

11.8

14.5

73.8

11.3

10.0

78.8

16.3 18.0

65.8

3.3

8.8

88.0

18.8

21.3

60.0

17.8

31.5

50.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Uttaranchal MP Gujarat Meghalaya Tamilnadu Total

States

Insistance on Cash Memo Yes Sometimes No

62

Information about the Product at the Time of Purchase

In the rural areas a large number of products which are sold are of

inferior quality. The shop keepers generally tend to cheat the consumers in

terms of price and contents of the products. The government has made it

mandatory for the producers to give information about the contents of the

product on the label as well as indicate the MRP of the product. It is also

mandatory to mention the date of manufacture and the date of expiry on packed

items. During the survey it was found that not many of the rural consumers

bothered to know about the contents, the expiry date and other relevant

information. However, they were conscious about the price of the product and

most of them sought information about it.

The analysis shows that 32.8 percent of the respondents always

checked the available choices of a product at the time of making a purchase

while 42.2 percent did not do that. As regards the information about the

contents which relates to nutritional value and other details only 5.3 percent

bothered to know about it while a large section (83.7 percent) of the consumers

did not think it important to seek information about the nutritional value of the

product. Interestingly the consumers were not quality conscious but certainly

most of them were price conscious. 87.4 percent of the respondents said they

did enquire about the price of the product. Across states this trend is visible. In

Uttarakhand more than 98 percent of the respondents enquired about the price

while the corresponding numbers was 94 percent in Madhya Pradesh, 86

percent in Gujarat, 76.7 in Meghalaya and 81.5 percent in Tamil Nadu

respectively. As far as the date of expiry is concerned many of the respondents

did not even know that products also have a date of expiry. In fact they were

surprised that a packed commodity could also go bad over time. As their

awareness about this fact was almost negligible, their responses were also on

the expected lines. Nearly 74 percent of the respondents never enquired about

the expiry date. On the other hand only 4.7 percent of the respondents enquired

about the date of expiry before purchasing a product (Table 11).

63

Table 11

Information about the Product at the Time of Purchase (in %)

Re

sp

on

se

Utt

ara

kh

an

d

M.P

Gu

jara

t

Me

gh

ala

ya

Ta

mil

na

du

To

tal

Available choices

Always 42.2 32.0 38.0 14.0 37.8 32.8 Sometimes 32.8 27.0 24.8 24.5 16.0 25.0 Never 25.0 41.0 37.3 61.5 46.3 42.2

Contents Always 2.3 2.7 2.3 5.2 13.8 5.3 Sometimes 1.3 0.3 7.7 9.5 36.5 11.0 Never 96.4 97.0 90.0 85.3 49.7 83.7

Price

Always 98.3 94.5 86.0 76.7 81.5 87.4 Sometimes 0.3 1.8 9.8 15.0 5.5 6.5 Never 1.5 3.8 4.3 8.3 13.0 6.2

Expiry date Always 1.3 2.3 10.8 7.0 2.3 4.7 Sometimes 7.5 19.3 32.8 38.0 9.4 21.4 Never 91.2 78.4 56.4 55.0 88.3 73.9

Source: Field survey

Figure 9

Information about the Product at the Time of Purchase (total)

(a) Available Choice (b) Contents

64

(c) Price (d) Expiry Date

Source: Field survey

Awareness about MRP

Almost all the packed commodities have MRP printed on it. The

awareness about the MRP is gradually increasing. Even in the rural areas the

study has revealed that 40.7 percent of the respondents knew about the MRP.

The survey reveals that 41.2 percent of the respondents in Uttarakhand, 40

percent in Madhya Pradesh, 43.2 percent in Gujarat, 37.8 percent in Meghalaya

and 41.3 percent in Tamil Nadu knew about the MRP (Table 12). However,

another interesting point is that even though 40.7 percent were aware about the

MRP but only 24.4 percent were aware that one can bargain even on the MRP

(Table 13). Majority of the respondents were in fact surprised as to how you can

ask for a lesser amount than what is printed and why should the shop keeper

sell the product at a lower price than the MRP. 51.2 percent did not know about

this fact (Figure 10).

Table 12 Consumer Awareness about MRP

(in %) States Yes No

Uttarakhand 41.2 58.8 Madhya Pradesh 40.0 60.0 Gujarat 43.2 56.8 Meghalaya 37.8 62.3 Tamilnadu 41.3 58.8 Total 40.7 59.3

Source: Field survey

65

Table 13 Consumer Awareness about Bargaining on MRP

(in%) Bargain on MRP

Sates Yes No Can't Say

Uttarakhand 25.8 56.3 18.0 Madhya Pradesh 24.3 50.8 25.0 Gujarat 28.8 48.3 23.0 Meghalaya 17.8 61.8 20.5 Tamilnadu 25.3 38.8 36.0 Total 24.4 51.2 24.5

Source: Field survey

Figure 10

(a) Awareness about MRP (b) Bargaining on MRP

Awareness about Standard Marks and Labels

Standard mark is a mark or symbol given to a product, which meets

certain standards with respect to the quality in terms of material used, methods

of manufacturing, labelling, packaging and performance. Standardization of

products is one of the best ways of protecting the consumers. The BIS and

other organisations are working on this and have come up with various

standard markings to ensure quality and purity of the products so that the

consumer gets value for money and is not cheated. During the survey it was felt

that the awareness level about such markings should be enquired about.

Accordingly questions relating to ISI, AGMARK, Hallmark, FPO and BEE were

enquired about (Table 14 and Figure 11).

66

Awareness about ISI mark

The Bureau of Indian Standards, empowered through a legislative Act of

the Indian Parliament, known as the Bureau of Indian Standards Act, 1986,

operates a product certification scheme, and has till date granted more than

30,000 licenses to manufacturers covering practically every industrial discipline

from Agriculture to Textiles to Electronics. The certification allows the licensees

to use the popular ISI Mark, which has become synonymous with quality

products for the Indian and neighbouring markets over the past 50 years.

This mark guarantees quality of every batch in production process (use

of components, testing standard of product, in-process checks by qualified

technical personnel). ISI licence is granted by the BIS for 1 year only and

performance of manufacturer is monitored before its renewal. This mark is

found on many products of day to day use like baby food, mineral water,

electrical and cooking gas appliances, pressure cookers, cement, steel, etc. Of

all the Marks the most popular is the ISI Mark as it is put on a number of

products that the rural consumers often use like bulbs, pipes, pump sets,

cement, etc. 40.5 percent of all the respondents were aware about the ISI mark

while 59.5 percent did not know about it. Many of them also said that they knew

that it is a seal of quality certified by the government but expressed

apprehension that there many products on which fake ISI mark is put and it is

difficult to identify the genuine marking. Awareness about ISI mark is highest in

Gujarat (48.5 percent) followed by Tamil Nadu (47 percent). Meghalaya ranks

the lowest with a response of 28 percent Table 15.

Table 14 Awareness about Standard Marks and Labels

Standard Marks and Labels

ISI Agmark Hallmark FPO BEE

States

Yes No Yes No Yes No Yes No Yes No

Uttarakhand 41.2 58.8 13.0 87.0 2.8 97.2

0.8

99.2 2.3 97.8

M.P 37.6 62.4 11.0 89.0 6.5 93.5

0.8

99.3 1.0 99.0

Gujarat 48.5 51.5 15.2 84.8 16.5 83.5

1.0

99.0 2.0 98.0

Meghalaya 28.0 72.0 4.0 96.0 1.0 99.0

0.8

99.3 0.3 99.8

Tamilnadu 47.0 53.0 16.3 83.7 23.3 76.8

2.8

97.3 2.5 97.5 Total 40.5 59.5 11.9 88.1 10.0 90.0

1.2

98.8 1.6 98.4

Source: Field survey

67

Figure 11 Awareness about Standard Marks and Labels (total)

Table 15 Consumer Awareness about ISI

(in %) Consumers’ Response about ISI

States Yes No

Uttarakhand 41.2 58.8

M.P 37.6 62.4

Gujarat 48.5 51.5

Meghalaya 28.0 72.0

Tamilnadu 47.0 53.0

Total 40.5 59.5 Source: Field survey

Awareness about AGMARK

AGMARK Grading and Standardisation is a Central Sector Scheme with

the objective of promotion of grading and standardisation of agricultural and

allied commodities under Agricultural Produce (Grading & Marking) Act, 1937.

Quality standards for agricultural commodities are framed based on their

intrinsic quality. Food safety factors are being incorporated in the standards to

compete in World trade. Standards are being harmonised with international

standards keeping in view the WTO requirements. Certification of agricultural

commodities is carried out for the benefit of producer/manufacturer and

consumer. Certification of adulteration prone commodities viz. Butter, Ghee,

68

Vegetable Oils, Ground-Spices, Honey, Wheat Atta etc. is very popular.

Blended Edible Vegetable Oils and Fat Spread are compulsorily required to be

certified under Agmark. Facilities for testing and grading of cotton for the

benefit of cotton growers is provided through six cotton classing centers set up

in cotton growing belt in the country. Check is kept on the quality of certified

products through 23 laboratories and 43 offices spread all over the country.

AGMARK can be found on agricultural, horticultural, forestry and

livestock products. Consumers can look for AGMARK on:- cereals, pulses,

spices, honey, rice, wheat flour, edible oil , ghee and butter. The survey reveals

that the rural consumers are hardly aware about this marking. Only 11.9

percent of the respondents were aware of this mark while 88.1 percent were

unaware about such markings (Table 16). Similar is the situation across the five

states. During the discussions the respondents said that as far as agricultural

items like pulses, rice, wheat flour etc are concerned they did not purchase the

packed ones but purchased loose commodity normally in bulk. They did not

bother to know much about this and said that it is cheaper to buy unpacked

agricultural products and further they were unsure of the quality of the packed

commodity as they could not see it before purchasing.

Table 16 Consumer Awareness about Agmark

Consumers’ Response on Agmark

States

Yes No

Uttarakhand 13.0 87.0

M.P 11.0 89.0

Gujarat 15.2 84.8

Meghalaya 4.0 96.0

Tamilnadu 16.3 83.7

Total 11.9 88.1 Source: Field survey

Awareness about FPO

FPO mark can be seen on the container or packages of processed food

or agricultural produces like jam, jelly, sauce, fruit juice, pickles etc. Many of

these processed food or agricultural produce are not much in use in the rural

areas. It may be used occasionally but the rural consumers prefer to use the

69

local brands which certainly do not carry these markings. A few local brands of

sauce were visible in various shops during the survey but it was not an issue of

importance to them. Even though it is important that the consumers use quality

products but 98.8 percent of the respondents were not aware about the FPO

mark (Table 17).

Table 17 Consumer Awareness about FPO

(in%)

Consumers’ Response on FPO States Yes No Uttarakhand 0.8 99.2 M.P 0.8 99.3 Gujarat 1.0 99.0 Meghalaya 0.8 99.3 Tamilnadu 2.8 97.3 Total 1.2 98.8

Source: Field survey

Awareness about Hallmark

The gold consumption in India is increasing day by day. Therefore the

jewellers are also mushrooming. On the customer’s point of view, there is no

standardization of prices in jewellery. The other problem is that making charges

varies depend upon the jewellery shop. Even if the jewellery owners claim that

their jewellery contain different carats, people have no knowledge how to check

the carat of the jewellery, where it can be checked, etc. The jewelers claim of

Hall mark/ BIS standard/ 912 etc. it is very difficult to identify the purity of gold.

Anybody can forge hallmark/912 mark on the jewellery. Today getting good

jewellery/ gold at a fair price becomes Herculean task for the customers. On

the other hand, if we want to sell our gold ornaments, they look very

suspiciously about the purity of gold. When we buy gold from a jeweller's shop,

we consumers never show mistrust to the jewellers. If we want to sell the same

gold, they look suspiciously that whether the gold is pure or not. We need to

put in place a scientific tamperproof instrument for checking the purity of gold

and also need an authority to check the gold's valuation, purity etc. under govt.

control so that the consumer should not feel cheated when they buy gold.

Government of India has identified BIS as sole agency in India to operate

this scheme. BIS hallmarking Scheme is voluntary in nature and is operating

under BIS Act, Rules and Regulations. It operates on the basis of trust and thus

70

it is desirable that the aspect of quality control is inbuilt in the system

responsible for managing quality. The BIS Hallmarking Scheme has been

aligned with International criteria on hallmarking (Vienna Convention 1972). As

per this scheme, licence is granted to the jewellers by BIS under Hallmarking

Scheme. The BIS certified jewellers can get their jewellery hallmarked from any

of the BIS recognized Assaying and Hallmarking Centre. The recognition to an

Assaying and Hallmarking Centre is given against BIS criteria which is in line

with International criteria on Marking and Control of Precious Metals. The BIS

hallmark, a mark of conformity widely accepted by the consumer bestow the

additional confidence to the consumer on the purity of gold jewellery.

Gold is not only a precious commodity but it also acts as a security. Tons

of gold are purchased every year. People buy gold from the jewelers only on

faith. However, it has been found that consumers easily get cheated as far as

the quality and purity of gold is concerned. To save the consumers from getting

cheated the process of hallmarking has been introduced by the government.

HALLMARK indicates that the jewellery conforms to the marked fineness of

gold content. It is being done for both gold and silver. Jewellery is hallmarked

from a BIS recognised Assaying & Hallmarking Centre (A&HC). Five

compulsory symbols make Hallmark; BIS logo, Fineness in millesimal number,

Assaying & Hallmarking Center's mark, Year of marking (‘A’ = 2000) and Logo

of BIS certified jeweler/manufacturer. The awareness about Hallmark is still

very low and consumers still buy jewellery without Hallmark. Amongst the

sample respondents only 10 percent knew about Hallmark (Table 18). The state

wise results show that in Tamil Nadu 23.3 percent of the respondents knew

about Hallmark. However, it is interesting to know that many who know about

Hallmark also did not purchase Hallmark jewellery. Instead they preferred to

purchase it from their traditional jeweller.

71

Table 18

Consumer Awareness about Hallmark

(in%)

Consumers’ Response on Hallmark

States Yes No Uttarakhand 2.8 97.2 M.P 6.5 93.5 Gujarat 16.5 83.5 Meghalaya 1.0 99.0 Tamilnadu 23.3 76.8 Total 10.0 90.0

Source: Field survey

Awareness about BEE

The BEE Star Energy Efficiency Labels have been created to

standardize the energy efficiency ratings of different electrical appliances and

indicate energy consumption under standard test conditions. These labels

indicate the energy efficiency levels through the number of Stars highlighted in

colour on the label. The BEE Star Labels include a Star Rating System that

ranges from One Star (least energy efficient, thus least money saved) to Five

Stars (most energy efficient, thus most money saved). It is a recent

phenomenon and is found on electrical appliances like bulbs, refrigerators and

air conditioners. Since it relates to electrical appliances it is expected that the

level of awareness will be low.

The awareness level in the rural areas about BEE was on the expected

lines as 98.4 percent of the respondents did not know about it (Table 19). In

Uttarakhand 97.8 percent of the respondents, in Madhya Pradesh 99 percent, in

Gujarat 98 percent, in Meghalaya 99.8 percent and in Tamil Nadu 97.5 percent

respectively were not aware about BEE.

Table 19 Consumer Awareness about BEE

(in%)

Consumers’ Response on BEE States Yes No Uttarakhand 2.3 97.8 M.P 1.0 99.0 Gujarat 2.0 98.0 Meghalaya 0.3 99.8 Tamilnadu 2.5 97.5 Total 1.6 98.4

Source: Field survey

72

Forms of Consumer Exploitation

In the rural areas, the consumers are exploited in many ways. The most

common forms of exploitation are food adulteration, under weight, over charge,

spurious goods etc. According to the survey, 40.2 percent of the total

respondents said that they were overcharged. 14 percent were victims of food

adulteration, 12 percent complained about the poor quality of the product, 7.5

percent about deficiencies in services and 7.4 percent complained of lesser

weight. If we analyse the state wise responses then in Uttarakhand 11.5

percent complained of food adulteration. In Gujarat 13.5 percent, in MP 20

percent while in Tamil Nadu it was 22 percent. Over charging is a common

problem in all the states. 48 percent of the respondent in Gujarat said they were

overcharged. We find that over charging and underweight is the major form of

exploitation of the rural consumers (Table 20). It was also found that the

balance that is being used is not as per government specifications and also not

correctly calibrated. More over the weights being used are not of standard

quality.

Table 20 Consumers’ Experience regarding Forms of Exploitation

(in%)

Consumers’ Experience on different issues

Fo

od

ad

ult

era

tio

n

Un

de

r w

eig

ht

Ov

er

ch

arg

ing

Sp

uri

ou

s/D

up

lica

te

De

fic

ien

cy

/Ne

glig

en

ce

o

f s

erv

ice

s

Fa

lse

in

form

ati

on

re

ga

rdin

g

Go

od

s/S

erv

ice

s

Sates

Yes No Yes No Yes No Yes No Yes No Yes No

Uttarakhand 11.5 88.5 7.0 93.0 36.0 64.0 13.8 86.3 9.25 90.8 4.0 96.0 M.P 20.0 80.0 4.0 96.0 29.8 70.3 15.5 84.5 7.5 92.5 1.0 99.0

Gujarat 13.5 86.5 3.5 96.5 48.0 52.0 5.3 94.8 3 97.0 0.0 100.

0 Meghalaya 2.8 97.3 14.3 85.8 40.0 60.0 8.3 91.8 5.5 94.5 2.0 98.0 Tamilnadu 22.2 77.8 8.3 91.7 47.0 53.0 17.5 82.5 12.1 87.9 5.6 94.4 Total 14.0 86.0 7.4 92.6 40.2 59.9 12.1 88.0 7.5 92.5 2.5 97.5

Source: Field survey

73

Figure 12

Consumers' Experience on Different Issues

11.5

20.0

13.5

2.8

22.2

14.0

7.0

4.0

3.5

14.3

7.4

36.0

29.8

48.0

40.0

47.0

40.2

13.8 15.5

5.3

17.5

12.1

9.3

7.5

3.0

5.5

12.1

7.5

4.0

1.0

0.0 2

.0

5.6

2.5

8.3

8.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Uttaranchal MP Gujarat Meghalaya Tamilnadu Total

States

Food adulteration

Short weighting

Over charging

Poor quality products

Deficiency/Negligence of services

False information regarding

Consumers Reaction to Exploitation

In case a consumer felt that he was exploited /cheated then what does

he do? How does a consumer react? This question is of immense relevance to

the study. Interestingly 28.5 percent of the respondents said they just ignored

the problem and 16.3 percent said they tried to get back the money.

Table 21 Consumers’ Reaction to Exploitation

(In %)

Consumers’ Reaction

States

Ignored the exploitation

Tried to get the back the

money

Mobilise the other

consumers & pressurise the

seller

Lodged a complaint at the

Consumer Protection Forum

Tried to replace the goods

Uttarakhand 29.3 14.5 1.0 0.0 55.3

M.P 28.5 15.3 0.3 0.0 56.0

Gujarat 35.8 9.0 0.0 0.5 54.8

Meghalaya 17.8 3.5 0.0 0.0 78.8

Tamilnadu 31.3 39.0 2.8 0.0 27.0

Total 28.5 16.3 0.8 0.1 54.4 Source: Field survey

74

Some respondents said that they had mobilized people to put pressure

on the seller to address their grievances. 54.4 percent of the respondents tried

to replace the product. It is to be noted that in the rural areas the shopkeepers

give goods on credit therefore for the sake of convenience the consumers have

no option but to only replace the product and not refund the money.

Figure 13 Consumers’ Reaction to Exploitation (total)

Awareness about the Consumer Protection Act

The Consumer Protection Act was enacted in 1986 to better protect the

consumers. It provides for a three-tier redressal mechanism at the district, state

and the National levels to address the complaints of the consumers.

Consumers can make use of this mechanism only if they are aware of its

existence. In spite of wide publicity being given by the government, not many

consumers in the rural areas are aware about this Act. Of all the respondents

92.4 percent said they did not know about the Consumer Protection Act. Only

7.6 percent knew about it. As far as the awareness in the states was concerned

only 7.5 percent were aware about the CPA in Uttarakhand, 6.5 percent in

Madhya Pradesh, 8.3 percent in Gujarat, 6.3 percent in Meghalaya and 9.5

percent in Tamil Nadu respectively (Table 22).

75

Table 22 Awareness about Consumer Protection Act

(in%)

Response on awareness about CP Act States

Yes No

Uttarakhand 7.5 92.5

MP 6.5 93.5

Gujarat 8.3 91.8

Meghalaya 6.3 93.8

Tamilnadu 9.5 90.5

Total 7.6 92.4 Source: Field survey

Figure 14

Awareness about Consumer Protection Act (total)

Source: Field survey

Sources of Information about Consumer Protection Act

Among the respondents who were aware about the Act, majority of them

34.2 percent received the information from the electronic media i.e. Television

and Radio while a small segment 6.5 percent gathered information from

newspapers/ magazines and 6.5 percent from NGOs accounting for 1.1 percent

(Table 23).

76

Table 23

Source of Information about Consumer Protection Act

(in %)

States

Te

lev

isio

n/R

ad

io

Ne

ws

pa

pe

rs/M

ag

az

in

es

Ho

ard

ing

s

Ne

igh

bo

urs

NG

Os

Ca

n’t

sa

y

Uttarakhand 75.9 13.0 3.7 0.00 0.0 7.4 M.P 26.9 7.7 0.0 0.00 7.7 57.7 Gujarat 12.1 6.1 0.0 12.12 30.3 39.4 Meghalaya 44.0 4.0 8.0 0.00 0.0 44.0 Tamilnadu 2.2 4.3 0.0 6.52 34.8 52.2 Total 34.2 6.5 2.2 2.17 6.5 48.4

Source: Field survey

Figure 15 Source of Information about CPA (total)

Awareness about Grievances Redressal Mechanism

The Consumer Protection Act, 1986 provides for a three-tier mechanism

at the district, state and the National levels to redress the grievances of the

consumers. Consumers can file a complaint which is to be disposed of within a

specified time framework. The procedure is based on summary trial and

principles of natural justice. Many of the respondents did not know about the

34.2

6.5

2.2

2.17 6.5

48.4

Television/Radio Newspapers/Magazines Hoardings Neighbours NGOs Can't say

77

redressal mechanism. Even those who knew about the Act were to a large

extent unaware about the main provisions of the Act. Only 7.6 percent of the

respondents knew about the Consumer Protection Act and when further asked

to enumerate the provisions of the Act they could only mention a few of them.

Only 22.6 percent of the respondents who were aware about the Act, knew

about the redressal mechanism under the Act. On the other hand 77.4 percent

of the respondents did not know about it. As far as the sampled states are

concerned the percentage of respondents who knew about the redressal

mechanism are: Uttarakhand 24.2 percent, Madhya Pradesh 21.7 percent,

Gujarat 26.2 percent, Meghalaya 13 percent and Tamil Nadu 27.7 percent

respectively. (Table 24)

Table 24

Awareness about Grievances Redressal Mechanism under CPA

(Responses from respondents aware about CPA) (in %)

States Yes No

Uttarakhand 24.2 75.8 Madhya Pradesh 21.7 78.3 Gujarat 26.2 73.8 Meghalaya 13.0 87.0 Tamilnadu 27.7 72.3 Total 22.6 77.4

Source: Field survey

Figure 16

Awareness: System of Redressal of Consumer Grievances

75.8

78.3

73.8

87.0

72.3

77.4

24.2

21.7

26.2

13.0

27.7

22.6

Uttaranchal

Madhya Pradesh

Gujarat

Meghalaya

Tamilnadu

Total

Yes No

78

Awareness about who can File a Complaint

Further the respondents were asked as to who can file a complaint under

the Consumer Protection Act. As revealed the awareness level about the Act

and its provisions is very low. Of the total respondents who were aware about

the Act, 83.7 percent did not know as to who can file a complaint (Table 25).

However, 13.5 percent of the respondents knew that the complaint can be filed

by the consumer and 1.7 percent said that any voluntary consumer organization

can file a complaint.

Table 25 Awareness about Filing Complaint

(in %)

Response on Awareness About Who can File a Complaint

states

Don’t Know

Consumer

Any voluntary consumer

association

The Central Government

The State Government

Others

Uttarakhand 84.2 14.0 0.8 0.0 1.0 0.0

M.P 86.0 12.5 1.0 0.0 0.0 0.5

Gujarat 80.3 15.0 2.5 1.0 1.0 0.3

Meghalaya 90.0 9.3 0.5 0.0 0.3 0.0

Tamilnadu 78.0 16.5 3.8 0.5 0.0 1.3

Total 83.7 13.5 1.7 0.3 0.5 0.4 Source: Field survey

Figure 17

Consumer Awareness about Filing of Complaint

83.7

13.5

1.7

0.3

0.5

0.4

Don't Know

Consumer

Any voluntary consumerassociation

The Central Government

The State Government or UnionTerritory Administration

NGOs

79

Opinion on Issues Relating to Consumer Protection

The respondents were asked a variety of questions to know their views

about the measures relating to consumer protection. Only 9.2 percent of the

respondents agreed that the consumers were aware about their rights and 90.8

percent answered in the negative (Table 26). Further the respondents were

asked whether consumers’ are well protected by law. 32.6 percent said that the

consumers were well protection by law while 67.4 percent could not answer this

question. The governments both central and the state are implementing a

variety of welfare programmes for the consumers but many of the consumers

do not know about this. Only 15 percent agreed that consumer welfare

schemes are well implemented by the government. On the other hand 85

percent answered the question in negative.

Table 26

Consumer’s Opinion on Consumer Protection related Issues (in %)

Are Consumers Aware about their Rights?

Are consumers well protected by law?

Are consumers aware about consumer welfare schemes?

States

Ye

s

No

Ye

s

No

Ye

s

No

Uttarakhand 6.7 93.3 13.4 86.6 16.8 83.2

M.P 6.5 93.5 13.5 86.5 12.8 87.2

Gujarat 13.4 86.6 49.7 50.3 21.3 78.7

Meghalaya 1.4 98.6 53.3 46.7 7.3 92.7

Tamilnadu 17.8 82.2 33 67 17.2 82.8

Total 9.2 90.8 32.6 67.4 15 85 Source: Field survey

Awareness about “Jago Grahak Jago”

Jago Grahak Jago is a popular advertisement issued by the Department

of Consumer Affairs, which intents to inform, educate and protect the

consumers. This message has also reached the rural consumers. 34.2 percent

of the respondents knew about this slogan (Table 27). These were those who

could actually say what it meant. On the other hand 65.8 percent did not know

what was being conveyed through this advertisement. In Uttarakhand 43.8

80

percent knew about it while in Tamil Nadu it was only 15.8 percent of the

respondents who knew about it.

Table 27 Consumers’ Awareness about ’JAGO GRAHAK JAGO”

(in %)

States Yes No

Uttarakhand 43.8 56.3

M.P 39.0 61.0

Gujarat 41.2 58.8

Meghalaya 31.3 68.8

Tamilnadu 15.8 84.3

Total 34.2 65.8 Source: Field survey

Figure 18

Awareness : 'JAGO GRAHAK JAGO'

56.3

61.0

58.8

68.8

84.3

65.8

43.8

39.0

41.2

31.3

15.8

34.2

Uttaranchal

MP

Gujarat

Meghalaya

Tamilnadu

Total

Yes No

Need for Awareness Programmes

The respondents were of the view that there is a need to educate the

people about their rights and obligations so that they can be protected. Lack of

education and awareness about their rights is the major cause of their

exploitation. 83.2 percent of the respondents agreed that there is a need to

create awareness among the consumers. Even in the sample states there was

a demand for consumer awareness programmes (Table 28).

81

Table 28

Consumers’ Opinion on Need for Awareness Programme (in %)

Opinion on Need for Awareness Programme

States

Yes Can't say No

Uttarakhand 85.3 11.5 3.3

M.P 80.0 16.0 4.0

Gujarat 93.0 4.3 2.8

Meghalaya 96.5 3.0 0.5

Tamilnadu 61.3 13.8 25.0

Total 83.2 9.7 7.1 Source: Field survey

Figure 19

Consumers' opinion on Need for Awarness Programme

85.3

80.0

93.0

96.5

61.3

83.2

3.3 4.0

2.8

0.5

25.0

7.11

1.5 16.0

4.3

3.0

13.8

9.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Uttaranchal MP Gujarat Meghalaya Tamilnadu Total

State

Perc

enta

ge

Yes No Can't say

To a question as to who should be given the responsibility of educating

the consumers through awareness programmes, 62.6 percent of the

respondents said that it should be the responsibility of the gram panchayats. On

the other hand 20.9 percent of the respondents were of the view that this task

should be carried out by the government and 9 percent felt that the educational

institutions can play a role in spreading awareness among the consumers

(Table 29)

82

Table 29 Consumers’ Opinion on Spreading Awareness by Different Agencies

(in %) Who should spread consumer

awareness States

Citizen

NGO

Government

Educational Institute

Gram Panchayat

No response

Uttarakhand 0.5 0.0 11.0 3.0 78.5 7.0

M.P 1.5 0.0 15.3 3.0 71.8 8.5

Gujarat 1.5 0.0 22.8 5.8 68.8 1.3

Meghalaya 0.3 0.0 23.8 10.8 59.3 6.0

Tamilnadu 4.0 0.5 31.5 22.5 34.8 6.8

Total 1.6 0.1 20.9 9.0 62.6 5.9 Source: Field survey

Figure 20

Opinion on diffrent Agencies for spreading Consumer Awareness

0.5 1.5

1.5

0.3

4.0

1.6

11

.0 15

.3

22

.8

23

.8

31

.5

20

.9

3.0

3.0 5

.8

10

.8

22

.5

9.0

78

.5

71

.8

68

.8

59

.3

34

.8

62

.6

7.0 8

.5

1.3

6.0 6.8

5.9

0.0

0.0

0.0

0.0 0.5

0.1

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Uttaranchal MP Gujarat Meghalaya Tamilnadu Total

States

Citizen

Government

Educational Institute

Gram Panchayat

No response

NGO

Sum Up

Consumer protection initiatives by the Government hinge on 3 basic

parameters. Firstly ensuring a legal framework that comprises of Consumer

Protection Act. The Consumer Protection Act enacted in 1986 has been

recognised as one of the finest basis of legislation enacted in any part of the

world and India can boast of being the only country having such specialised

83

legislation for consumer protection. The CPA has a three tier, simple, quasi

judicial machinery at the National, State and District level for hearing cases

raised by consumers. Secondly, evolving standards for different products to

enable the consumers to make an informed choice about different products.

Standards which are the essential building block for quality play a key role in

consumer protection. Standard could be on technical requirement

(specifications), improved specific standard terminology (glossary of terms),

codes of practice or test methods or management systems standards. The

standards are set generally by Government or inter-Governmental bodies but

world wide it is being recognised that voluntary establishment of standards

plays an equally important role for protecting consumers. Thirdly, consumer

awareness and education is the main building block for consumer

protection.

National Action Plan on Consumer Protection

Consequent upon the 50th National Development Council Meeting,

Planning Commission has identified consumer awareness, redressal and

enforcement of Consumer Protection Act as a priority agency for action by the

Deptt. of Consumer Affairs. The allocation for consumer protection activities

was significantly enhanced in the last 2 years of the X Plan and

Consumer Awareness Scheme in the XI Plan. The Consumer Awareness

Scheme for the XI Plan amounting to a total of ` 409 crores has been approved

by the Cabinet Committee on Economic Affairs on 24.01.08. This scheme has

been formulated to give an increased thrust to a multi media publicity campaign

to make consumers aware of their rights. The slogan ‘Jago Grahak Jago’ has

now become a household name as a result of publicity campaign undertaken in

the last 3 years. Through the increased thrust on consumer awareness in the

XI Five Year Plan, the Government has endeavoured to inform the common

man of his rights as a consumer. As part of the consumer awareness scheme,

the rural and remote areas have been given top priority. In a big country like

India, given the scenario of economic disparity and level of education and

ignorance, educating the consumers remains a gigantic task. Government has

taken up number of activities and schemes in creating consumer awareness in

the country as part of this Consumer Awareness scheme.

84

Multi Media Publicity Campaign

As part of the Multi Media publicity campaign, the activities being undertaken

are: Publicity through print media using news paper advertisements, to educate

the consumers about their rights and responsibilities. Publicity through

electronic medium by telecast of video spots of 30 seconds duration on various

consumer related issues such as Grievance Redressal system, MRP, ISI Hall-

Mark, Alternate Dispute, Redressal system, weights and measures, Rights of

Consumers etc. Issues pertaining to rural and remote areas have been given

prominence in the various advertisement spots.

Telecast of advertisement in North Eastern states in Regional

languages of 20 seconds and 30 seconds duration on various consumer related

issues such as M.R.P. (Maximum Retail Price), Short Measurement, Expiry

date on medicine, adulteration, damaged product and redressal system. The

Department in consultation with the Department of Post has disseminated

consumer awareness messages through Meghdoot Post cards to reach far-

flung rural areas including North East States. A bigger plan of partnership with

the Department of Posts to use the vast network of postal department for

spreading the message of consumer awareness has been chalked out

Calendars containing the message of consumer awareness are being displayed

through the vast network of 1.55 lakhs post offices.

In spite of these initiatives of the government no specific programme or

scheme exists which exclusively address the needs and aspirations of the rural

consumers. Rural consumers are generally seen as a homogeneous group and

most of the policies are designed keeping in view the needs of the urban

consumers. The benefit of various programmes to educate the consumers and

enhance their awareness has met with little success. Until the rural consumers

are empowered the consumer movement in the country will continue to remain

weak. A new strategy based on the ground realities needs to be made so that

the bulk of Indian consumers who live in the rural areas are protected.

85

CHAPTER IV

Findings and Recommendations

Findings

1. The respondents covered various strata of the society so as to make it a representative sample. Males constituted 68.6 of the sample size whereas 31.5 percent were females.

2. As far as the educational level of the respondents is concerned, 23.1

percent had no schooling, 17.9 percent of them had attended school up to the primary level, 26 percent had middle schooling, 16.3 percent had studied up to high school, 10.3 percent had schooling up to intermediate level and 6.6 percent were Graduates. Post graduates and Professionals consisted of 1 percent of the respondents.

3. 1.6 percent of the respondents were below 20 years of age. 23.7 percent

belonged to the age group between 20 -30 years, 38.5 were from the age group of 30-40 years, 22.6 percent were within 40-50 years of age and 13.7 percent of the respondents were above 50 years of age.

4. As far as their occupational status is concerned, owner/cultivators

constituted 9.9 percent of the respondents while marginal farmers constituted 16.2 percent. The major segment of the respondents, which is 25 percent, consisted of labourers. Among the respondents, self employed constituted 12.9 percent, unemployed 13.8 percent and housewives 13.8 percent.

5. The survey revealed that majority of the respondents (44.4) percent had

an annual income of less than ` 24,000. The group with annual income between ` 24, 000 - 60,000 consisted of 40.1 percent. 11.4 percent of the respondents had income between ` 60,000 – 1,20,000. Those whose income was above ` 1, 20, 000 constituted 4.15 percent of the sample size.

6. As far as the monthly expenditure of the respondents is concerned, 43.5

percent spent below ` 2,000, 45 percent spent between ` 2,000 to 5,000, 8.45 percent of the respondents’ expenditure was between ` 5, 000 to 10,000. Those whose expenditure was above ` 10,000 constituted 2.6 percent of the sample size.

7. The survey reveals that a major portion of the respondents (34.9 percent) depend upon the local haat or weekly markets, 34.8 percent depend upon nearby town or kasba. Only 18.15 percent depend upon village shops and 13 percent go to city for shopping.

86

8. As regards the inquiry into terms and condition of the goods/services before transaction was concerned more than half (58%) did not make any enquiry 23.1 percent of the respondents enquired about it sometimes and only 19 percent made enquiry frequently.

9. Enquiry into various aspects before purchase was directly connected to

the level of education. Only 7.7 percent of the respondents who had not attended schools inquired into the terms and conditions before purchase. On the other hand 63.3 percent of the graduate respondents sought information before purchasing goods or availing a service. Among the sample respondents only 17.8 percent insisted on taking a cash memo regularly, 31.5 percent asked for it only sometimes while purchasing costly goods and the majority 50.8 percent never insisted for cash memo.

10. While purchasing goods 32.8 percent of the respondents always

checked the available choice of the product, 25 percent checked it sometimes and 42.2 percent did not do that. 50.8 percent of the rural consumer did not bother to know about the contents and the expiry date of the product. They are conscious only about the price of the product and sought information about the price. 83.7 percent of the rural consumer did not think it important to seek information about the nutritional value of the product. Respondent consumers were price conscious 87.4 percent of them inquired about the price of the product.

11. 73.9 percent of the rural consumer did not see the expiry date only 21.4

percent checked it sometimes. 40.7 percent of the survey rural consumers knew about MRP. Only 24.4 percent knew that one could bargain on the MRP and more than half (51.2 percent) did not know about the fact. 40.3 percent of the rural consumers are aware about ISI mark, 11.9 percent knew about AGMARK, 10.0 percent about HALLMARK, 1.2 percent about FPO and 1.6 percent about BEE markings.

12. Amongst the various ways of exploitations, 40.2 percent were

overcharged, 14 percent were victims of food adulteration, 12 percent complained about poor quality of products, 7.5 percent about deficiency in services and 7.4 percent complained about lesser weights. On being cheated/exploited 28.50 percent respondents ignored the problem, 16.3% tried to get back the money or replace the goods and some respondents (0.8%) tried to mobilize people to put pressure on seller to address their grievances.

13. 92.4 percent of the respondents were not aware about the CP Act. 34.2

percent of the respondent knew about Jago Grahak Jago. Of the respondents who were aware about the Act, 34.2 percent received the information from the electronic media i.e. TV/ Radio 6.5 percent gathered information from newspapers/ journals and 6.5 percent from NGOs. Of the respondents aware about CP Act only 22.6 percent were aware about the redressal mechanism under the Act whereas 77.4 percent

87

were unaware about it. Of the total respondents aware about the Act, 83.7 percent did not know as to who can file a complaint, 13.5 percent knew that the complaint can be filed by consumer and 1.7 percent said that any VCO can file a complaint.

14. Only 9.2 percent of the respondents agreed that the consumers were

aware about their rights and 90.84 percent answered in negative. 32.6 percent respondents said that the consumers were well protected by law while 67.4 percent could not answer this question. Only 15 percent agreed that consumer welfare schemes are well implemented by the government and 85 percent respondents answered the question in negative.

15. Awareness about Jago Grahak Jago was quite high. 34.2 percent of the

respondents knew about the slogan. However, majority of respondents (65.8 percent) did not know what was being conveyed through the advertisement. 83.2 percent of the respondents agreed that there is a need to create awareness among the consumers. To the question as to who should be given the responsibility of educations consumers 62.6 percent of the respondents were of the view that it should be responsibility of the gram panchayats, 20.9 percent of the view that this task should be carried by the government and 9 percent felt that the educational institutions can play a role in this.

Recommendations

1. Rural Markets are flooded with substandard goods, adulterated food items and unsafe products. The rural markets are dumped with look alike and pass off products. The quality of service being provided is not only poor, but lacks transparency resulting in consumer exploitation. Therefore, there is a need to prioritise the protection of rural consumers by strengthening the enforcement mechanism.

2. Lack of choice is a major problem in the rural areas as the consumers do

not have access to a variety of products. The dependence of the rural consumers on the neighbourhood shops, who sell on credit, is adding to the problem. Therefore standardisation of products and availability of packed commodities will help the rural consumers to a large extent.

3. The consumers in the rural areas lack awareness about various

measures taken by the government. The multimedia campaign has not been able to educate the consumers to a large extent. The government should launch vigorous campaign to educate the consumers with the involvement of local NGOs, schools and colleges. Awareness about the consumer rights and obligations should be emphasised in such programmes. The Panchayati Raj Institutions should also be involved in the consumer movement and the Gram Sabha should play an active role in generating consumer awareness. The Panchayats must be encouraged to celebrate atleast the National Consumer Day. Organisations like Nehru Yuva Kendras, NSS and NCC should be

88

involved in consumer education at the grass root level as they can play an important role in enhancing awareness. The strategy should be to use various organisations to take forward the consumer movement.

4. Rural consumers are not aware about various standardisation marks and

therefore, unable to read and understand the labels on the products. Both print and electronic media must be used to propagate this message among the rural consumers.

5. The survey reveals that inspite of 25 years of the CP Act, rural

consumers are largely unaware about the Act and its various provisions. It would be appropriate that a chapter on consumer protection is incorporated in the school curriculum so that the children become aware about the Act and they could act as change agents.

6. The rural markets are mostly unorganised. Therefore, there is also a

need to regulate the rural markets in terms of quality, safety and weights and measures. The balance used in the rural markets is not of standard quality. Stones are still being used to weight the products and in most of the cases the balance is never calibrated properly. The Department of Legal Metrology (Weights and Measures) in the states has to play a proactive role in this. Pamphlets and leaf lets should be distributed in the rural markets periodically highlighting these points and what the consumers can do to prevent being cheated.

7. The SIRDs (State Institute of Rural Development) have the mandate to

organise training programmes for the elected representatives and other local functionaries of various departments implementing programmes and schemes. The SIRDs should include a module on consumer welfare in their training programmes to educate the participants on the need and importance of consumer protection.

8. Its time that rural consumers are not viewed as a homogeneous group.

Rural women, children and farmers have specific problems and specific policies should be in place to educate and protect them.

9. The District Forums should play a more active role and the members

should be involved in consumer literacy. The consumers must be made awareness about the various decisions of the consumer forums so that their confidence in the redressal mechanism can be enhanced. The District Forums should have circuit benches at the block level so that the rural consumers can have easier access to justice and the redressal mechanism.

10. Preference should be given to rural areas while setting up consumer

advisory and mediation centres. The rural consumers should also have the benefit of ADR as it will save both money and time. Such centres should be funded by the state/central government and set up at each block headquarters to start with. The local VCOs can be involved in

89

managing the advisory centres. This will help the rural consumers to a large extent.

Sum Up Rural Consumers: Need for Education and Empowerment

In the emerging scenario it is necessary to protect the rural consumers

by educating them about their rights and empowering them to make decisions

based on information about the goods and services. Awareness has to be

created among the rural consumers. So far the consumer movement has

largely been confined to the urban centers, and with the expanding rural

markets now the focus has to shift to protect the rural consumer.

Consumer organizations and similar civil society groups have an

important role to play in consumer education. They have the means to provide

consumers with information and help them to make informed choices.

Consumer information needs to be available at the right time and in the right

place before or when purchasing decisions are made. Several NGOs are very

active in the rural areas in advocating for consumer rights but due to their

limited ability to put enough pressure on policy makers, they lack consumer

support. This is the dilemma of NGOs in consumer protection. Regardless of

these limitations consumer empowerment programmes through regular training

and education are very crucial. It is also time to consider consumer education

as part of the school and college curriculum.

There is also a need for the effective implementation of various

provisions of the legislations enacted to protect the consumers from fake and

adulterated products from entering the markets so that the consumers interests

could be safeguarded. Various business houses, NGOs and the governmental

agencies have to come together to join hands to combat counterfeiting.

Strengthening Redressal Mechanism

Redress of complaints is a major concern for consumers. Having a right

to access the redressal mechanism is of prime importance. For the right to

redress to have a practical value, a mechanism must exist to ensure that it can

be exercised effectively. If consumer confidence is to be built up they need

90

assurances that if things go wrong they can seek redress. The District

Consumer Disputes Redressal Forums which act as the first point of contact in

case of a complaint have to play a pro-active role in building consumer

confidence. The district forums should be strengthened and initiatives aimed at

promoting access to simple, swift, effective and inexpensive legal channels be

taken up. In many states the District forums are short of members and also

lack the required infrastructure. The state governments should address the

problems of district forums as well as the consumers to make the redressal

mechanism more effective and also responsive. Moreover, it becomes difficult

for a rural consumer to go to the district headquarters to file a complaint and

then pursue his complaint. It will be better if the concept of circuit benches for

the district forums is also introduced as in the case of National Commission and

the State Commissions so that access to justice is ensured for the rural

consumers. There is also a need to set up more than one district forum in a

district to clear up the pendency of complaints, which has increased

substantially. Any further delay in disposal of the complaints will only shatter the

faith of consumers in the redressal mechanism.

Role of Panchayati Raj Institutions

To reach the rural consumers, it is imperative to involve the panchayati

raj institutions in not only educating consumers but also ensuring that fake and

spurious products are not sold in the rural markets. These institutions can play

a meaningful role in consumer protection and consumer welfare and this has

been recogonised by the policy makers. The recommendations contained in the

20th Report of the Standing Committee on Food, Consumer Affairs and Public

Distribution (14th Lok Sabha) on the subject ‘Consumer Movement in the

Country’ needs to be effectively implemented. It recommended that the

Department of Consumer Affairs should take the desired initiatives to involve

panchayat raj institutions in various programmes related to consumer

awareness. The publication of the Department specifically ‘UPBHOKTA

JAGARAN’ should be brought out in regional languages and distributed to the

elected representatives of the PRIs.

91

The Committee further recommended that the best forum to educate the

rural masses about their rights as consumers as well as the techniques to

redress to their grievances is the meetings of the gram sabha. It felt that the

Department of Consumer Affairs in consultation with the Ministry of Panchayati

Raj should take desired initiatives to have mandatory meetings of the Gram

Sabha on 24th December (National Consumer Day) where the villagers could

properly be educated about their rights as consumers. No doubt some initiatives

have been taken in this direction and capacity building and awareness

programmes are being organized through the State Institutes of Rural

Development. But to reach such a large number of rural consumers, a vigorous

campaign with the involvement of the panchayats needs to be taken up.

Specific capacity building programmes for the elected members of the PRIs are

to be developed with adequate financial sanctions. All stakeholders need to

coordinate their activities and ensure that adequate literature is also made

available in the local languages. Street plays and folk songs can be meaningful

instruments to create awareness in the rural areas. Apart from these there is

also a need to formulate appropriate policies and strategies to protect the rural

consumers particularly the farmers, women and children.

92

Annexure

Table 17 Statement Indicating Number of Samples Tested of Drugs, Found

Substandard / Spurious During the Period of 1995-2003

Year Sample Tested

Not of Standard

quality

Spurious Not of Standard

quality (%)

Spurious (%)

1995-1996 32770 3490 100 10.65 0.31 1996-1997 38936 3189 94 8.19 0.24 1997-1998 32936 2979 157 9.04 0.48 1998-1999 38936 3189 94 8.19 0.24 1999-2000 35570 3666 115 10.31 0.32 2000-2001 36947 3088 112 8.36 0.30 2001-2002 38824 3458 96 8.91 0.25 2002-2003 36314 3395 125 9.35 0.34

Source: Health Administrator Vol : XIX Number 1: 65-73

93

Table 16 Financial Loss due to Counterfeit Products Market of Different Sector

Sector Estimated Annual Economic Loss Statistical Facts

Pharma Revenue loss of 5-7% per annum to total market due counterfeit drugs to (WHO, 2009)

• 15-25% of all medicines sold in India are counterfeit • Estimates put the counterfeit drug industry ranging

from 0.25 to 25 per cent of the overall pharma industry

• Every 5th, if not 4th medicine being sold in over 600,000 retail chemist shops is fake.

• The spurious drug market is estimated at INR20-60 billion in 2008 in a market of ` 900 billion, including exports.

• Estimated, the total fake market business is of ` 6,500 crores every year!

• Estimated that about 38% of medicines supplied in government hospitals in India are counterfeit, and 40% of all drugs sold in India are counterfeit.

FMCG The FMCG industry alone has been facing losses of over ` 5,000

crore per year, due to counterfeit products Of the ` 113,000-crore FMCG market in India (February 2, 2010, India PRwire). Counterfeit products result in an annual loss of approximately ` 30,000 crore to the industry and ` 15,000 crore to the Government exchequer.

• Pass-offs are look-alike products that resemble the original products, mainly through misspelling of the trademark. For example, Sunslik instead of Sunsilk, Clemic Plus or Climic Plus or Cosmic Plus instead of Clinic Plus, Collegiate for Colgate, Vips Rub or Vives Rub as a pass-off for Vicks Vaporub.

• a global marketing research firm, 10-30 per cent of cosmetics, toiletries and packaged food are counterfeits (AC Nielsen)

• 10% of all major soft drinks sold are spurious, while 10-30% of cosmetics and packaged food are counterfeits, as per a slew of media reports.

• Fake gold and precious metals are worth Rs60 billion in India.

94

Media & Entertainment

The ` 6,000 crore Indian film industries loses ` 2,500 crore annually to piracy.

• Around 60% of films produced and 40% of music produced is copied and distributed illegally in India.

• The ratio of legitimate to pirated music in India is 50:50 and while the ` 7.5 billion turnover of the Indian music industry is through legitimate sales, another ` 7 billion is generated from the pirated market.

• Over 800 million pirated DVDs discs are consumed in India annually and 1 million DVD players are added every month in India

Auto Mobile Annual losses of up to $1 billion (` 4,500 crore) to the auto industry

due to counterfeiting (SIAM study,2009) • According to a 2007 study conducted by the, fake

spares constitute 35 per cent of the replacement market that is ` 165 billion domestic market; it is worth ` 53 billion. This is likely to become an ` 63 billion industry by 2010 and will cross ` 140 billion in 2015. (Automotive Components Manufacturers’ Association, 2007).

Software

In absolute terms, the loss amounts to ` 121.5 billion (sixth annual Global Software Piracy Study, 2008)

• India has managed a 1% drop in software piracy from 69% to 68% in 2008.

Source : Financial Express, 20th

April, 2010 www.centad.org/focus_76.asp www.mobilepaper.timesofindia.co