Insurers regularly exclude charges to overstate potential returns. Appallingly, this...
Why the consumers are taken for a ride, while buying goods and services from the public, private and government institutions? Why the Consumer Protection Act has failed to usher in the much expected consumer revolution? What we can do to bring about real reforms
Celebrating World Consumer Day (WCD) on 15th March has become a ritual like celebrating most other such days like environmental, cancer, safety, mothers, children days, etc. Instead can we celebrate this WCD differently? Can each of us reflect on how consumers suffer, irrespective of their being rich or poor, urban or rural, literate or illiterate? Why are consumers taken for a ride, while buying goods and services from public, private and government institutions? Why has the Consumer Protection Act failed to usher in the much expected consumer revolution? Finally, what can we do to bring about real reform?
Instead of consumer activists organizing WCD celebrations, government agencies should organize them in a ritualistic way. They are the real cause of much of the woes of consumers. This year, like in previous years, deputy commissioners have been ordered to organize WCD to highlight problems that consumers face as a result of rampant food adulteration and various ways of fraudulent weighing of goods. No doubt food adulteration is a serious problem. But are these the issues to be taken up to usher in consumer revolution or promote consumer protection?
It is always easy to blame the government. But in a democracy where we, the people are ultimate rulers, we need to introspect on what has been our role? Why have we abdicated our responsibilities? Have we put pressure on the government not to squander taxpayers’ money by organizing ritualistic functions which do not produce results? Why are consumer activists not organizing WCD? Often, they gladly participate in such celebrations with government officials in order to curry favour.
WCD is a time for serious thinking to bring about much needed reforms to make “Consumer the King”. We need “out of the box” thinking. All our earlier efforts have failed to get results. Despite the adoption of new laws and new initiatives by the government, consumers’ woes are increasing by the day. Before we discuss a new paradigm it may be useful to list some major consumer problems.
Even before the LPG quota to limit the number of cylinders one can buy at a subsidized price, it has never been an easy to replenish the LPG supply. Now securing LPG has become a nightmare. Should consumers suffer to procure simple daily cooking needs? Why can we not develop a more streamlined approach of distributing LPG, while meeting the urgent need of supplying LPG at a subsidized price to those, who are below the poverty line? In order to reduce diversion of subsidized LPG, the government has made the system even worse and more prone to corruption. Despite hundreds of studies, woes of consumers in securing rationed items under PDS are ever present.
Energy regulatory commissions were established to improve power supply by streamlining the tariff setting process. The underlying principle was to reduce political interference and improve efficiency. This was done by appointing an independent regulatory body and by monitoring the operations of monopolies. However, we have not seen the expected results and the power crisis is only worsening.
The water supply problem is getting worse by the day even in places where people live close to water sources. There is not a single city in India where water is available on a 24x7 basis every day. Why? Politicians make long promises to improve water supply. Since water is a basic need, they promise to give water free or at highly subsidized price. But the reality is much different. Not only does the public not get adequate water supply, but also, in some places, they have to pay an exorbitant price. When will we start agitating for proper water supply? What can be more important than water?
A recent report by Pratham (a Mumbai-based NGO providing primary education to underprivileged children) has showed how our children are getting poor education in both the government and private schools. In fact our education sector from pre-schooling to university has collapsed. Less than 15% to 20% of the graduates produced by our education system are employable. On paper our literacy rate is climbing. But it is climbing at a rate based on a simple criterion of being able to sign. Do we need any more statistics to prove that we, the public, are short-changed by our educational institutions?
Health delivery system especially to the poor is also deteriorating, as some Indian cities are trying to promote health tourism to attract foreign patients. When we have the ultra-modern hospitals to meet the needs of the rich, government hospitals and even most of the private hospitals are failing in their duty to take care of the patients. Regularly the government is coming up with new schemes to help the poor with improved health delivery system. Unfortunately, their impact is minimal. Even some of the poor African countries have better child and maternal mortality statistics.
Citizen’s charter complemented by Right to Information was supposed to help the public when seeking services at government offices. Have they? Has it reduced corruption? While we talk of strengthening laws concerning Lok Ayukta and adapting a Lokpal Bill, the ground realities are that without bribing it is impossible to get any timely service at government offices. It looks as though our society has given up the effort to fight corruption, though at the national level it has been on the front burner for some time.
Since, it is a well known and accepted fact that the consumer is at the receiving end, while buying goods and services from the private companies, the above list deals only with the services provided by the government. Where should the consumer movement start to help the consumers?
We do not need any more laws and regulations. What we need is better governance at every level and heightened awareness among the public that in a democracy we are the rulers. How many of us will relate the need to elect honest and competent candidates with the consumer movement? It is only by electing the right candidates can we improve governance. Only when governance improves can we hope for a beginning of the end of consumer woes and the possibility of a real consumer movement.
Ambiguity over a clause in the Companies Act that disallows corporates from investing in tax-free bonds at a rate of interest lower than the prevailing bank rate was seen as hurting investments into tax-free bonds
The ministry of corporate affairs (MCA) on Thursday said companies can invest in tax-free bonds where the effective rates are higher than the prevailing bank rates, a move that would help in attracting more investments into such instruments.
Ambiguity over a clause in the Companies Act that disallows corporates from investing in tax-free bonds at a rate of interest lower than the prevailing bank rate was seen as hurting investments into tax-free bonds.
Making the clarification, the ministry has said corporate investments in tax-free bonds having higher interest rates (effective rate of returns) than prevailing rates would not violate the Companies Act.
“...where the effective yield (effective rate of return) on tax free bonds is greater than the yield on prevailing bank rate, there is no violation of Section 372(A) of Companies Act, 1956," the ministry said in a circular dated 14th March.
The circular is effective from 14th March.
A clarification on the issue was sought by the finance ministry in order to effectively implement the Budget proposals.
In the Union Budget for 2013-14, the government authorised raising of up to Rs50,000 crore through issue of tax-free bonds.
As per the Companies Act, “no loan to anybody corporates shall be made at a rate of interest lower than the prevailing bank rate, being standard rate made public under Section 49 of the Reserve Bank of India Act...”
Such bonds carry a lower rate of interest—at present in the range of 6.75% to 7.50%. These instruments are also allowed in the current financial year but the response has been relatively poor.
According to the circular, the poor response was mainly on account of the restriction in terms of Companies Act—where tax free bonds cannot have rates higher than the prevailing interest rate.