At an international conference on 26th October, prime minister (PM) Narendra Modi spoke passionately about a stringent new law that will empower consumers, lower the cost of redress and take into account the business practices prevalent in India. Noted consumer activist Pradeep Mehta, secretary general of Consumer Unity Trust (CUTS), Jaipur, who attended the conference, says that the PM spoke on consumer protection for 50 minutes as against the scheduled 17-20 minute allocated. Mr Modi said that the legislation would show “how seriously we take the needs of our citizens and how we strive hard to solve their problems.” What was music to my ears, says
Mr Mehta, was the PM’s thrust on the fact that promoting consumer interest (welfare) is as vital as consumer protection. Over the past several years, Moneylife has repeatedly shown how financial regulators, including a Reserve Bank of India governor with a rock-star like popularity, do not even speak about consumer/investor/depositor/ issues, let alone engage with them directly. So it is heartening to hear the PM speak about this.
The Consumer Protection Bill, 2016, which replaces the 1986 statute (with its many amendments), has been in the works for a while now. Despite several amendments, the legislation is due for a major overhaul to align it with changing consumer profiles, products, market needs and multiple delivery mechanisms. The new legislation provides for a consumer redress authority, which is, reportedly, along the lines of the US Federal Trade Commission. It will introduce the concept of product liability and will permit resolution through mediation cells for faster redress. It also proposes to tighten action against misleading advertisements. Several amendments suggested to the draft legislation are in the process of being incorporated in the final draft and the final bill, going by the PM’s speech, will be introduced in parliament shortly. While these actions are highly encouraging, they still do not provide a holistic approach to effective regulation or redress of public and consumer grievances. Allow me to flag three important issues.
First, the government has, probably, gathered a vast body of information from pgportal.gov.in (a centralised public grievance monitoring system under the department of administrative reforms and public grievances), a grievance redress initiative, which, I learn is directly overseen by the prime minister’s office (PMO). This was so effective in the initial days that Moneylife Foundation had begun to recommend it as the go-to place for every possible complaint against public and private organisations, utilities and government departments. Veeresh Malik, a Right to Information (RTI) activist, is among those who had found pgportal more effective than filing RTI, for a time. He has filed over 1,000 public grievances for himself and others across ministries.
Mr Malik says that in the past year, pgportal has deteriorated because of a huge resistance from various ministries and ‘nil fear of action’ for failure to redress grievances. Organisations have become adept at ‘evasive tactics’ and finding ways to close grievances without explanation. He says that, barring exceptions such as the railways, finance, road, transport, NHAI (National Highway Authority of India) and Central tax authorities, the rest provide ‘call-centre-like’ responses to complaints. A detailed analysis of the massive, centralised data generated by pgportal should be a goldmine of information on the pain-points for consumers and help the government introduce administrative reforms in public interest. More importantly, the learning should be part of the new consumer legislation that is still being drafted, so that accountability and liability of manufacturers and service-providers is fixed upfront to reduce complaints.
Secondly, online sellers are part of the vast new marketplaces whose conduct needs to be addressed. If the proposed consumer protection authority plans to introduce stringent product liability provisions, making manufacturers responsible for product quality and usage, then how much more strict should the law be on fake and counterfeit products sold online through e-commerce portals? A few months ago, I wrote about how a senior Amazon executive brazened it out before senior consumer ministry officials when cornered over such sales. The global giant, which advertises that you shop on ‘apni dukaan’, suddenly claimed that it was a virtual ‘haat’ or marketplace and not accountable for what is palmed off to trusting consumers by various sellers. Amazon’s argument about not being allowed into retailing in India does not wash with us consumers. But the government also needs to make up its mind—hold Amazon and other sellers accountable or just open up the consumer retail business to foreigners. It cannot turn a blind eye to consumers being cheated.
Thirdly, the proposed Consumer Protection Authority will be (CPA) empowered to initiate suo moto investigation, class action and order product recall and penalties, which could include cancellation of licences, without waiting for consumer complaints. Most countries have given these powers to regulatory organisations, like the Competition Commission of India (CCI), but India has chosen to keep it out. CCI’s mandate, says its website, is to ensure “that the ‘Common Man’ or ‘Aam Aadmi’ has access to the broadest range of goods and services at the most competitive prices.” Many of its advocacy and anti-trust actions do redress issues faced by consumers and will overlap with CPA and other regulators. CCI is already in a turf battle with the telecom regulator.
A similar Financial Redress Authority (FRA) has been recommended to redress grievances that ought to be handled by our four financial regulators (banking, insurance, pensions and capital markets). Another big chunk is real-estate related complaints that should primarily be redressed by the Real Estate Regulatory Authority. The irony is that financial, telecom and realty consumers have had a better stab at getting redress or justice only through the consumer courts, while sector regulators have operated as rule-making bureaucracies. Even after FRA is set up, people can continue to approach consumer courts and civil courts in these sectors. FRA already promises to be an expensive and giant bureaucracy with a consumer advisory council and possibility of closing complaints through mediation. The cost of all these new government ‘authorities’ is, eventually, borne by the consumer and taxpayers in the form of fees, cess or higher taxes. Having created a series of sector regulators over the past 25 years since economic liberalisation, we seem set to create a multiple grievance redress bodies in the coming years, without learning any lessons from the past. We need a single, powerful, grievance redress authority rather than set the stage for new turf battles or create sinecures for retiring bureaucrats. This body could be a part of the CCI and made accountable to parliament.
An important suggestion by the Financial Services Legislative Reforms Commission (FSLRC), which promoted the FRA idea, was to create a ‘feedback loop’, where consumer complaints data makes it possible to identify ‘hotspots’ of consumer grievances and forms the basis of modifying regulation and supervision framing/amending subordinate legislation. Such data should have been available through pgportal.in, but we have not heard of it being mined. The public grievance portal ought to be merged into the single consumer and public grievance redress authority which is suitably empowered and has the ability to gather and analyse data to reduce areas of friction for consumers. Even if the government is not interested in FRA, the feedback loop idea should not get buried.
In the final analysis, fair competition or effective deterrence through strict penalties are the best ways to protect consumer interest. It is unclear how this would work if there are multiple authorities with overlapping jurisdiction. Changing this into a single authority to ensure effective grievance redress would require very bold action and the ability to overcome strong bureaucratic resistance. Will the Modi government, which takes pride in its ability to take bold decisions, give it a shot?
I had been filing greivance against age frauds in sports and simple ways to curb this menace to this portal. the Poor PMO inspite of having good intentions cant do anything.
Government needs to retrench three quarters of those on Public pay roll and cut down the laws that foment extortion to a point where a quarter of the staff will suffice. Then they need to abolish reservations and get tough on corruption make corruption an act of treason and a capital offence. Government needs to abolish all subsidies and pay a tax free monthly subsistence stipend to ALL citizens. Enabling people to work for more than just subsistence while maintaining equity and equality under law.
Nothing will change until:
(1) Inequality under law and exceptions to the rule of (including “reservations†and special privileges for some religions, castes and tribes at the expense of others) are expurgated from the Constitution and laws of India.
(2) Bribe Taking is defined as criminal extortion or treason and made a capital offense with special rules of evidence and special courts with summary powers (akin to a Military Court Martial).
(3) All court proceedings are video graphed and archived for public viewing and can be used as evidence to prosecute Judges and Magistrates at all levels under special laws and special courts with summary powers akin to a military Court Martial, for insouciance, negligence, tardiness, dereliction of duty, disregard for law and propriety, behaviour unbecoming of a Judge such as lack of etiquette and manners,
(4) every job on the "Public" i.e. Government Pay Roll has specific and unique Key Responsibility Areas, Key Performance Parameters and Objectives for which they are held accountable on pain of summary dismissal for non-performance or life imprisonment for treason for sabotage under special laws and special courts with summary powers akin to a military Court Martial and
(5) India creates an Ombudsman Service of reemployed and retrained military officers (Colonel and Below, JCOs and NCOs) who retire before 50 to serve as presiding officers, investigating/prosecuting and enforcement officers at the afore mentioned "Special Courts", one for every tehsil with powers to arrest, incarcerate, try and punish any and all from the President of India to a peon in accordance with the Special Laws framed therefor.