Consumerism: Emerging Challenges and ?· Consumerism: Emerging Challenges and Opportunities Joyeeta…

Download Consumerism: Emerging Challenges and ?· Consumerism: Emerging Challenges and Opportunities Joyeeta…

Post on 16-Jul-2018

212 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

<ul><li><p>Consumerism: Emerging Challenges and Opportunities </p><p>Joyeeta Gupta </p><p>Why have milk prices gone up so much? In the olden days, the mothers milked the cow s, the daughters set it out in pans to separate the cream, one of the sons sold it in the maket. Today the agricultural department is mobilized, the cows' sheds are sterilized, the cows are immunized, the milk is homogenized, the supplies are motorized, the dairies are or-ganized, the milkmen are subsidized, the political leaders are energized. The result, the Indian consumer is victimized. Former Vice President M. Hidayatullah (Courtesy: Readers Digest, Nov '84) </p><p>Consumer movement in our country is gaining momentum in the recent past. A number of consumer centres have come up all over the country, mostly education-oriented while some are action-based. Joyeeta Gupta describes these and draws the implications of the rising consumer awareness for the managers, for the policy-makers, and for the consumers themselves. </p><p>Joyeeta Gupta is Editor, Consumer Confrontation, a journal published by the Consumer Education and Research Centre, Ahmedabad. </p><p>The State of the Consumer In an environment of limited choice, inadequate supplies, incomplete information, ignorant con-sumers, and unlimited demand, it is inevitable that the Indian consumer gets cheated. Some examples of how he is affected are given below: It is estimated that the consumer loses at least </p><p>Rs. 2,000 crore every year; in fact, he is paying Rs. 1,600 crore more than he should because of defective weights and measures (Sundaram, 1985). </p><p> One out of every three edible items in the market is adulterated. 1 </p><p> A sample study reveals that 50 per cent of veg-etables were contaminated with pesticides. 2 </p><p> Fake fabrics are being manufactured on 8,00,000 powerlooms.3 </p><p> Adulterated cement is bringing down houses but not the rent. </p><p> Subsidized text books are sub-standard in that they tell the Class X students that Leningrad is the capital of Russia.4 </p><p> Women were being denied the individual term insurance by the Insurance Corporation. </p><p> Negligence in municipal services resulted in 23 citizens of Ahmedabad losing their lives within 24 hours of continuous rains by falling into open drains, manholes, and pits. </p><p>1. "Most of 'What You are Eating is Adulterated," Indian Express, 14.9.1983. </p><p>2. "Pesticide Residues," Financial Express. 28.2.1985. 3. Press Release Issued by the Consumer Education and </p><p>Research Centre (CERC), Ahmedabad. 4. Consumer Confrontation, July 1986. </p></li><li><p> There are 30,000 drug formulations in the market though only 116 are declared to be essential by the Hathi Committe.5 </p><p> The paradox of the medical profession in In dia is that while there are more than 20,000 unemployed doctors in India, there is only one doctor for every 20,000 people in the rural areas.6 </p><p>These sample statistics on essential con-sumer items like food, clothing, shelter, educa-tion, insurance, medical services, and municipal services serve to emphasize the need for a regu-latory climate to protect the consumer. </p><p>But in terms of sheer numbers the 750 million consumers in India are a force to be reckoned with. They have at least 200 international bodies supporting their cause. They have around 50 laws which can be interpreted in their favour. There are about 180 consumer bodies at their beck and call. The government is officially recognizing consumerism as a force by creation of consumer agencies. Business and industry, in an effort to cope, has started self-regulating measures. </p><p>With the Bhopal tragedy came the stimulus for a sudden environmental concern and a reali-zation that safety measures and precautions are not always adopted by the industrial sector. With the Dalkon Shield disaster came the realization that not all products and services coming from the West are safe. With the international declara-tion of consumer rights came the growing aware-ness of one's rights. With international precedents of law came the knowledge of the extent of the judi-cial support the consumer movement may get. </p><p>In the evolving atmosphere of protectionism and awareness, the attitudes of professionals, policy makers, and managers will have to un-dergo a drastic change. </p><p>Implications for the Policy Maker For the policy maker it is not enough to have a multiplicity of laws unless they are implemented. The Hire Purchase Act, 1972, is yet to come into force. Making provisions for the establishment of enforcement or safety councils is creditable, but it serves no purpose if the council is not 5. Consumer Confrontation, March 1980. 6. Quoted from a lecture delivered by I H Latif, Ex-Governor </p><p>of-Bombay. </p><p>established, or if the post of the officer incharge is vacant. The Air Traffic Safety Council, though envisaged by law, is yet to become a reality. The post of the Public Health Analyst in Ahmedabad has been vacant for the past five years. </p><p>Keeping the two rights of safety and informa-tion in focus, the policy of the government should be to ensure that scarce available resources are not diverted _to non-essential ends such as the production of tonics and syrups which account for 25 per cent of our total pharmaceutical production.7 A major restructuring of economic, fiscal, and legal steps is necessary to ensure qual-ity control, safety, and that resources are put to optimal use. </p><p>Implications for the Consumer Dr. James Turner, a close associate of Ralph Nader and a leading consumer expert of the US (who was recently in India) would, however, transfer the responsibility of policy decisions on the con-sumer, by voting via the wallet. Quoting from Adam Smith that consumption is the sole end and purpose of all production, he says that consumers are to economics what voters are to politics. </p><p>If the government passes legislation to ban alcohol production, it will not necessarily be ef-fective if consumers demand alcohol and if pro-ducers and retailers are willing to take risks. This legislation would, in fact, be counterproductive, because spurious and sub-standard liquor will be available at high prices and this is one of the main reasons why the amendment to the American Constitution to ban liquor was dropped in 1933 (Tresoline, 1979). Dr. Turner's suggestion is that instead of banning cigarette production, one should educate consumers on the ill effects so as to make them decide for themselves that this is a product they do not want. This is based on the premise that power flows from the bottom up, that is from the people to the powers that be. </p><p>But in a market of so many products and services, the consumer is, in essence, a novice. When it comes to making an educated choice, the consumer cannot determine say, for instance, the tensile strength of a thread or a rope, or the fast-ness of dyes (Lee and Zelenak, 1982). It is here that policy decisions of the government supple-ment the economic vote of the consumer. 7. "Consumer Notes." Indian Express. 14.7.1986. </p><p> 150 Vikalpa </p></li><li><p>Implications for the Manager </p><p>The consumer movement is the economic expres-sion for revolution. The seeds of the consumer movement have been sown. The time is drawing near when a major problem faced by consumers can result in a consumer revolution, seriously af-fecting the producers' fortunes. The manager must therefore sensitize himself to the new risks and opportunities as part of the concept of corpo-rate responsibility. He has to ensure that the so-cial cost is not greater than the private benefit. He has to internalize the social costs especially in terms of environmental pollution. </p><p>Though there may be a conflict between con-sumer interest and business interest in the short run, in the long run this conflict disappears. For, if a firm wishes to maximize its profits in the long run, it will have to satisfy consumers and con-tinually cater to consumer needs and demands. However, despite the fact that this principle is based on sound common sense, "probably the most important management fundamental that is being ignored is staying close to the consumer to satisfy his needs and anticipate his wants," as Lew Young (Editor-in-Chief, Business Week) says. </p><p>In a broader perspective, Dr. James Turner, in his interview with the author, reaffirmed that the point where the consumer and the producer meet is not a point of confrontation, but of contact where both consumers and producers need each other. Therefore, as consumerism grows and exer-cise of consumer rights becomes a matter of habit, there will be no conflict between consumer and business interest, even in the short run. They are both partners in the development process. </p><p>Metamorphosis in the Environment Thus, with a change in the environment in the country, a subtle change is taking place in almost every sphere of existence and professional activ-ity. The entrepreneur will have to anticipate these changes in society and adapt accordingly. Most other professionals will have to respond to the stimulus society has to offer, but the manager will have to adapt well in advance to stay in business. </p><p>Formerly, any product could be sold, any </p><p>advertisement could be passed, and any warranty card was acceptable. After-sales service was re-garded as a favour accorded by the sellers. The novelty of new goods and new ideas had an at-traction for the consumer. But today, blind ac-ceptance is becoming a matter of the past. Con-sumers have started questioning the validity of the claims made by advertisements of even repu-ted companies. A case in point is S. Kumar's. The company was compelled to issue a corrective ad-vertisement and withdraw the earlier one. </p><p>Growth of Consumer Centres </p><p>The first consumer centre was set up in Madras by the late Shri Rajagopalachari, followed by the Consumer Guidance Society of India in Bombay. Till 1980, however, the growth of consumer centres was fairly slow, but today there are 180 centres in the country. </p><p>Gujarat accounts for 45 per cent of the con-sumer groups in the country. This implies that the managers in Gujarat have to be the first to respond to the consumer movement. Karnataka, Andhra Pradesh, and Tamil Nadu follow with 26, 23, and 19 groups respectively. The largest state of Uttar Pradesh has only three consumer agencies, while on the other hand, Andaman and Nicobar Islands have three groups all located in Port Blair. </p><p>In terms of cities, Delhi has the highest number of groups (14), followed by Ahmedabad, Hyderabad, and Bombay implying the need for greater consciousness of business in these cities. </p><p>Rural India which accounts for nearly 80 per cent of the population does not have a single con-sumer protection group. The above data were col-lected and analysed by Dr. P K Muttagi of the Tata Institute of Social Sciences who concludes that "the data suggest that the consumer movement in India is still confined to some pockets and the consumer movement is still in its infancy." </p><p>Most consumer groups subscribe to the view that consumer protection involves mainly dis-semination of information and education. But there are a handful of consumer groups like the Voluntary Organization in the Interest of Con-sumer Education (VOICE) in Delhi and the Con-sumer Education and Research Centre (CERC) in </p><p> Vol. 11, No. 2, April-June 1986 151 </p></li><li><p>Ahmedabad which believe in action at the level of influencing policy decisions, raising questions in Parliament, doing active research into various subjects, and invoking the law to protect the rights of consumers. However, the activities of most groups are limited to the extent of their re-sources, financial and manpower, both in terms of number and commitment. </p><p>Most consumer groups are financially weak. Only four organizations have a budget of over Rs. one lakh a year. Nearly 55 per cent of the groups have a budget of less than Rs. 1,000 a year. </p><p>Another weakness is that one out of every five groups in the country receives grants from the state or central government. This often raises the question of objectivity in distribution of these grants. Would these grants be given if consumer groups started questioning the activities of the government? Take the case of the Machchu Dam disaster in 1979, during which 1,800 people lost their lives and property worth Rs. 103 crore was damaged. A Commission of Enquiry was es-tablished by the government on August 14, 1979, but was wound up in 1981 before its enquiry was completed. This was challenged by the CERC on the grounds that a Commission cannot be wound up arbitrarily. The High Court ruled in favour of the CERC and the life of the Commission was ex-tended. Thereafter, the Gujarat Government went to the Supreme Court and the Supreme Court up-held the winding up of the Commission without going into the legalities whether a Commission could be wound up before an enquiry is comp-leted. This history has been recalled here to give the nature of the antagonism that exists between the Gujarat Government and CERC over this issue. As a consequence, the Government of Gujarat withheld CERC's grant of Rs. 1.51 lakh for the year 1981-82. The High Court held that this was an arbitrary action and malafide, and the govern-ment was compelled to release the grant. Not all consumer groups may have the facilities to fight such manipulative measures of the government. </p><p>One of the major problems in accelerating the growth and impact of the consumer movement is the fact that often consumers themselves are not cooperative. In one case where CERC wished to lay down the principle of absolute liability in re-spect of a gas cylinder explosion, the plaintiff went in .for an out-of-court settlement of Rs. 13,000 and so the principle could not be </p><p>152 </p><p>established. Had it been established, the man-ufacturers and the retailers could not have es-caped liability by claiming that there was con-tributory negligence on the part of the user (mostly illiterate servants and uneducated house-wives) in an accident. Establishing absolute lia-bility would have pushed cylinder manu-facturers to design in such a way that there is very limited possibility of an accident no matter what mistakes the consumer makes while handling it. </p><p>Government Response The government has been responding in fits and starts to the stimuli of consumer groups. While Mahatma Gandhi sought to redefine the status of the consumer/customer in his historic statement that all business exists for the satisfaction of the consumer, it was Mrs. Gandhi who gave the movement a fillip by ascribing the 17th point of her 20-Point Programme to consumer protection. But so far, the status of the consumer has been emphasized more on paper in terms of the funda-mental rights guaranteed by the Constitution of India, other laws, and policy statements. </p><p>In the last four years, however, the govern-ment seems to be thinking seriously in terms of concretizing consumer rights. The setting up of the National Consumer Council was a step in this direction. Many of the state governments have also set up agencies. Earlier this ye...</p></li></ul>