Consumer : Rights and Protection

Chapter Introduction and Summary

This chapter explores the fundamental concepts of consumer satisfaction, utility theory, and consumer rights protection. It begins with the economic concept of utility - the satisfaction derived from consuming goods and services - and explains how economists like Alfred Marshall attempted to quantify this satisfaction through Cardinal Utility Theory.

The chapter then transitions to practical consumer protection, covering various types of goods and services, consumer rights, and the legal framework established to protect consumers in India. It emphasizes the importance of consumer awareness, education, and the role of consumer courts in addressing grievances.

Key topics covered include:

Utility Theory: Total utility, marginal utility, and the Law of Diminishing Marginal Utility
Types of Goods: Free goods, economic goods, consumer goods, capital goods, durable and non-durable goods
Consumer Rights: Right to safety, choice, information, redressal, and education
Legal Framework: Consumer Protection Acts of 1986 and 2019
Consumer Courts: Three-tier system for dispute resolution
Quality Symbols: ISI, AGMARK, FSSAI marks for product quality assurance
Consumer Education: Awareness and protection from fraudulent practices

Questions and Answers

Section 1: Utility and Consumer Satisfaction

Q1: What is utility in economics? A: Utility is the want-satisfying power of a commodity or good. It represents the satisfaction gained through consumption and can be measured using units called 'utils'.

Q2: Explain Cardinal Utility Theory. A: Cardinal Utility Theory states that satisfaction derived by consumers through consumption of goods and services can be quantified using cardinal numbers (measurable units). This theory was first proposed by Alfred Marshall to mathematically measure consumer satisfaction.

Q3: Differentiate between Total Utility and Marginal Utility. A:

Total Utility (TU): The total amount of utility a person receives when continuously consuming several units of a particular commodity.
Marginal Utility (MU): The change in total utility that occurs when one additional unit of a commodity is consumed.

Q4: State the Law of Diminishing Marginal Utility. A: The Law of Diminishing Marginal Utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases, while keeping consumption of other commodities constant.

Q5: What are the assumptions and limitations of Cardinal Utility Theory? A: Assumptions:

All products must be of the same quality
Consumer's income and tastes do not change
Consumption must be continuous
Units must be of fixed quantity and quality

Limitations:

Utility cannot be accurately quantified using cardinal numbers
Subjective nature of satisfaction makes measurement difficult
Individual preferences vary based on place and time

Section 2: Types of Goods and Services

Q6: Classify different types of goods with examples. A:

Free Goods: Abundant in nature, freely available (e.g., sunlight, air)
Economic Goods: Purchased for a price (e.g., food, vehicles)
Consumer Goods: Final goods for consumer satisfaction (e.g., clothes)
Capital Goods: Used in production of other goods (e.g., machinery, factory)
Durable Goods: Last for a long time, reusable (e.g., house, table)
Non-Durable Goods: Short-term use (e.g., milk, vegetables)

Q7: What should consumers pay attention to while purchasing goods? A: Consumers should check:

Quality of the product
Expiry date
Price accuracy
GST number on bills
Warranty/guarantee terms
Manufacturing date
Statutory warnings
Product ingredients and composition

Section 3: GST and Consumer Protection

Q8: What is GST and when was it implemented in India? A: GST (Goods and Services Tax) came into effect in India on July 1, 2017, following the 101st Amendment to the Constitution. It aims to make the economy transparent by implementing "One Nation, One Tax" concept, unifying various taxes.

Q9: What are the different GST rates? A: GST rates include 5%, 12%, 18%, and 28%. Some products are exempted from GST. The structure divides GST equally: 50% goes to state government (SGST) and 50% to central government (CGST).

Section 4: Consumer Protection Movement and Laws

Q10: When and how did the Consumer Protection Movement begin in India? A: The Consumer Protection Movement in India began with the formation of the Consumer Guidance Society of India in Mumbai in 1966. It's a social movement aimed at protecting consumer rights and ensuring their welfare.

Q11: What are the objectives of the Consumer Protection Movement? A: The objectives include:

Protect consumer rights
Prevent frauds
Empower consumers
Legislate for consumer protection
Ensure credibility of advertisements
Ensure consumer representation in political forums

Q12: Compare the Consumer Protection Acts of 1986 and 2019. A: Consumer Protection Act 1986:

Came into force on December 24, 1986
Established separate judicial system for consumer protection
Defined consumer rights clearly

Consumer Protection Act 2019:

Came into force on July 20, 2020
Established Central Consumer Protection Authority (CCPA)
Covers e-commerce platform regulations
Simplified dispute resolution process
Provides punishment for counterfeit goods
Prohibits misleading advertisements

Section 5: Consumer Rights

Q13: List and explain the five fundamental consumer rights. A:

Right to Safety: Protection from goods/services threatening life and property
Right to Choose: Access to goods and services at competitive prices
Right to Know: Information about quality, quantity, purity, and price
Right to Seek Redressal: Remedy for unfair trade practices and exploitation
Right to Consumer Education: Knowledge and skills to be an informed consumer

Section 6: Consumer Courts and Redressal Mechanism

Q14: Describe the three-tier structure of consumer courts in India. A:

District Consumer Disputes Redressal Commission: Cases up to Rs. 1 crore compensation
State Consumer Disputes Redressal Commission: Cases from Rs. 1 crore to Rs. 10 crore
National Consumer Disputes Redressal Commission: Cases exceeding Rs. 10 crore compensation

Q15: What are the advisory committees under the Consumer Protection Act? A: Three-tier advisory committees:

District Consumer Protection Council
State Consumer Protection Council
National Consumer Protection Council

Their role is to advise respective governments on consumer rights matters.

Section 7: Quality Symbols and Standards

Q16: Explain important quality symbols and their significance. A:

ISI Mark: Bureau of Indian Standards mark for industrial products (cement, paper, paint, gas cylinders)
AGMARK: Ensures quality of agricultural and forestry products
FSSAI: Food Safety and Standards Authority of India mark for food security

Section 8: Types of Frauds and Redressal

Q17: How can consumers address different types of frauds? A: Educational Institution Frauds:

Contact UGC, AICTE, State Board
Approach Consumer Forum
Lodge police complaint

Healthcare Frauds:

File complaint through State/National Medical Council
Complain to Director of Health
File PIL in High Court/Supreme Court

Online Frauds:

Complain to Cyber Crime Cell (cybercrime.gov.in)
Report to CERT-IN portal
Use National Consumer Helpline

Banking Frauds:

Approach Bank Grievance Redressal Mechanism
Contact RBI Ombudsman (Toll-free: 14448)

Section 9: Consumer Education and Awareness

Q18: What is consumer education and what are its objectives? A: Consumer education involves educating consumers about their rights, responsibilities, product choices, market differences, and consumer laws.

Objectives:

Protect consumer rights
Make consumers aware of responsibilities
Ensure safety in trade, especially online
Identify market ethics and regulations
Create awareness about consumer protection laws
Ensure health safety
Promote consumer justice

Q19: How can consumers file complaints? A: Consumers can file detailed complaints on white paper directly to consumer dispute redressal courts, along with supporting documents as evidence. Bills and receipts are crucial evidence for filing complaints.

Q20: What helpline numbers are available for consumer complaints? A:

State Consumer Helpline: 1800 425 1550
Consumer complaint numbers: 1967, 1915
Banking Ombudsman: 14448
Pravasi Sahayata Kendra: 1800-11-3090

Section 10: Important Dates and Facts

Q21: What are the significant dates related to consumer protection in India? A:

December 24: National Consumer Day (Consumer Protection Act 1986 came into force)
July 1, 2017: GST implementation date
July 20, 2020: Consumer Protection Act 2019 came into force
1966: Consumer Guidance Society of India formation in Mumbai

Key Takeaways

Consumer awareness is essential for protection against exploitation
Legal framework exists but requires active consumer participation
Quality symbols help in identifying genuine products
Education and awareness are the best tools for consumer protection
Multiple redressal mechanisms are available for different types of frauds
Sustainable consumption benefits both consumers and society
Bills and documentation are crucial for complaint filing