Taken for a ride
BHAMY V SHENOY
in india , consumer-citizens are treated not as kings or masters but as servants, if not slaves, by employees in public utilities and government offices. The Consumer Protection Act, copra, which was established in 1986, has not succeeded in solving the endless list of problems faced by hapless consumers.
Inflation is the worst enemy of consumers. There are no strong institutional mechanisms such as an independent central bank or powerful economic forces in India to improve productivity and control inflation. The often quoted inflation rate is based on the wholesale price index which has no relevance to the goods and services bought by the actual consumers. For most of them, food and fuel account for the largest percentage of their monthly budget and inflation rate for these items is considerably higher.
Let us take the simple example of kerosene. According to government statistics, its price has not changed for the last four years. Kerosene available through the public distribution supply ( pds ) outlets is supposed to be sold to card holders at Rs 2.75 per litre. But in reality, the poor have to buy kerosene either from the black market or the parallel market. In line with international prices and the rupee devaluation, kerosene prices in both these markets skyrocketed from Rs 7.50 per litre in October 1995 to more than Rs 10 per litre in January 1996.
No government statistics will reflect this kind of price increase. This is because the government just ignores the existence of black-marketing in kerosene. It is only on paper that kerosene is subsidised to help the poor. But the fact remains that pds kerosene enriches all the actors involved in kerosene trade, from politicians to bureaucrats to oil company employees to dealers to hawkers. Neither the consumer affairs ministry nor the infant consumer movement in India has taken up this cause to help the poor. The government subsidy of more than Rs 5,000 crores per year which is supposed to help the poor enriches those who do not deserve it.
Unhealthy trends Competition between companies is supposed to promote the cause of the consumers. However, the trend observed today is that mergers seem to be getting more and more common. The best example one can quote is that of the recent merger between the Hindustan Lever Limited and the Tata Oil Mill Company Limited, which has helped them gain more than 70 per cent of the organised detergent and soap market. An institution such as the Monopolies and Restrictive Trade Practices Commission is supposed to prevent such mergers. But it has acted as a toothless tiger in this case. Even the consumer movement could not take up the issue and fight against the merger.
Another example is the airline industry. By not providing a level playing ground to the private airlines, by continuing to restrict the entry of new players and by threatening them from time to time on some pretext or the other, the government is preventing consumers from enjoying the fruits of liberalisation. A look at the cement or tyre industry also reveals that informal cartels are operating freely. It is because of the existence of such cartels that the benefits of the reduction of excise duties by the government does not fully reach the consumer. The less said the better about the prices charged by the industries monopolised by the public sector.
Lack of competition also exists in the case of coffee in the market. India has surplus coffee which it exports. It stands to reason that when the export prices went up last year because of the coffee crop failure in Brazil, Indian coffee prices also went up. But when international coffee prices fell, they did not come down in India! Also, when coffee prices came down in Karnataka, they did not come down in Tamilnadu! A vibrant consumer movement would ideally have exposed such a collusion between the dealers, businessfolk and industrialists and try to bring down the prices.
Directionless In India, today, there are about 800 voluntary consumer organisations of which, more than 70 are just on paper. Only about 30 organisations have a yearly budget of more than one lakh rupees. The total membership of all these organisations is about 1.7 lakh. How can so few, however dedicated they may be, educate the 15 crore literate people living in urban areas, let alone the much larger rural population ?
There are only a handful of well-known consumer organisations in the country today. Among them are the Consumer Education and Research Centre in Ahmedabad, Gujarat, with its own testing laboratory and an annual budget of more than Rs one crore; Common Cause, New Delhi, whose public interest litigation in the Supreme Court against political parties for not filing income tax returns is well-known; Consumer Guidance Society of India, Mumbai, the oldest consumer organisation in India; Mumbai Grahak Panchayat, Mumbai, with a membership exceeding 15,000; Voluntary Organisation in the Interest of Consumer Education, New Delhi; Consumer Unity and Trust Society, Calcutta; and Consumer Action Group, Madras.
Attempts have been made at the state level to coordinate the activities of consumer groups by forming federations or coordination committees in all the southern states, West Bengal and Orissa. Such federations in Tamilnadu, Kerala and Orissa have been quite successful in organising annual conferences and also state level agitations. An attempt to form a national level confederation was made during the All-India Consumer Conference in Kochy, Kerala in 1990. The idea was endorsed by all the delegates and in the follow-up conference at Delhi in 1991, the Confederation of Indian Consumer Organisations ( cico ) was formed with more than 140 consumer organisations from all over India as members. Three more conferences were held (Calcutta in 1992, New Delhi in 1993 and Hyderabad in 1995) successfully. However, because of the differences among the executive committee members, cico seems to be breaking down. Consumer activists, thus, do not have an all-India level organisation to give momentum or direction to the movement.
Though the consumer organisations are contributing in their own ways towards the development of consumer movement in India by adopting different strategies, they are just not able to hold the public imagination. While there are many consumer causes which are crying out for solution ( pds kerosene, for instance), no consumer activist or consumer organisation has succeeded in achieving national prominence for them. Many activists are devoting their time to the consumer movement, but most of them are turning their attention in bringing copra into the open, which is at best a small help to solve the problems faced by consumers. They do not have an appreciation of how inflation can affect the poor or how competition can reduce prices for the consumers and provide more choice, or that deficit-financing is the root cause for inflation. If only they have the benefit of advice of experts in different fields, their efficacy will be significantly higher.
In the us , almost every consumer is an activist, fully aware of his or her rights as well as responsibilities. In India, the situation is entirely different, with more than 50 per cent of the population below the poverty line. These consumers are in no position either to exercise their rights or to know their responsibilities. However, those above the poverty line, especially those who are literate, can become consumer activists. But these are the people who have betrayed India by being indifferent towards the consumer movement. Many claim that they do not have spare time. However, when they have individual consumer problems like an excess electricity bill, they find time to make any number of visits to the electricity office to solve their problem. They do not realise that if the consumer movement was strong, they would not have faced such a consumer problem in the first place. If, at least, a significant percentage of the consumers devote just one hour per week fighting for consumer rights, the consumer movement will be strong and consumers will indeed be the kings.
For the consumer movement to take off in India, therefore, we need a massive campaign to bring about a significant increase in participation. Secondly, the movement should attract professionals with varied backgrounds. Thirdly, consumer activists should stop looking for hand-outs, either from the government or from foreign funding agencies. There is never a lack of funds for a good cause even in India. Once consumer awareness reaches a critical mass, India's consumer movement will be ready to take off.
Bhamy V Shenoy is a well-known consumer and environmental activist and has written several books on these subjects