Editorial Board

A Refereed Monthly International Journal of Management

Impact of Consumer Support Mechanism on Preventing Consumer Exploitation in Northern India

Dr. Hari Prapan Sharma

Assistant Professor

GLA University, Mathura

Abstract

To prevent consumer exploitation in India, which is home to a large number of people living at the bottom of the pyramid, several legislations have been enforced such as consumer helpline number and consumer protection act 2019. However, the cases of harassment of the consumers are rampant and, according to some critiques, underreported.  Through this paper, the authors have attempted to analyze the level of awareness for different tools of consumer support mechanism and have tried to establish a link between the level of awareness regarding support mechanism and the rate of exploitation. A two-component relationship model has been analyzed with the support of empirical results gathered from the respondents. The survey data spans over five states of northern and central India. The prevalence of a large number of consumer cases in this region has prompted the authors towards the study of the surveyed area. The analyses based on hypotheses reveal that there is a direct relationship between lack of awareness regarding consumer protection mechanism and the probability of exploitation of the consumer on various parameters mentioned in the model. One major finding has been a tendency of Institutional demotivation in consumer protection agencies in India toward filing a lawsuit by a deceived and exploited consumer. To assist policy formulators as well as academicians to have a comprehensive awareness regarding the framework and awareness level of the consumer support mechanism. Since there is a lack of empirical research in the dimension of the research paper, it attempts to create an appreciated contribution by acting as a catalyst for further extensive research in this domain.

Key-words- Consumer awareness, Consumer exploitation, Consumerism, Consumer Protection Agencies

Abstract

To prevent consumer exploitation in India, which is home to a large number of people living at the bottom of the pyramid, several legislations have been enforced such as consumer helpline number and consumer protection act 2019. However, the cases of harassment of the consumers are rampant and, according to some critiques, underreported.  Through this paper, the authors have attempted to analyze the level of awareness for different tools of consumer support mechanism and have tried to establish a link between the level of awareness regarding support mechanism and the rate of exploitation. A two-component relationship model has been analyzed with the support of empirical results gathered from the respondents. The survey data spans over five states of northern and central India. The prevalence of a large number of consumer cases in this region has prompted the authors towards the study of the surveyed area. The analyses based on hypotheses reveal that there is a direct relationship between lack of awareness regarding consumer protection mechanism and the probability of exploitation of the consumer on various parameters mentioned in the model. One major finding has been a tendency of Institutional demotivation in consumer protection agencies in India toward filing a lawsuit by a deceived and exploited consumer. To assist policy formulators as well as academicians to have a comprehensive awareness regarding the framework and awareness level of the consumer support mechanism.Since there is a lack of empirical research in the dimension of the research paper, it attempts to create an appreciated contribution by acting as a catalyst for further extensive research in this domain.

Key-words- Consumer awareness, Consumer exploitation, Consumerism, Consumer Protection Agencies

Introduction

The competition among various industries to push their products in the market compels them to adopt various techniques including attractive packaging, false warranties, misleading advertisement, overpricing, defective weighing and measuring, gifts etc. (Sullivan and Marks, 1985; Javeed et al., 2020). This harms the Indian consumer who has been proved to be relatively accommodating even after being deceived. Since a large number of Indian consumers are poor, illiterate, ignorant, passive, and have a defeatist mentality; they continue to be at the mercy of a seller who, as a business technique, pretends to be modest and submissive(Basavaraj and Tangade, 2004; Dilraj et al 2018).

The manifestations of consumer neglect are evident in the increasing number of charges of adulteration, spuriousness, sub-standardization, hoarding and black-marketing which has been blamed on the increasing tendency of profit-maximizing at the cost of consumers (Sundaram, 1985; Chatterjee and and Sahoo, 2011). These practices are generally coupled with a massive volume of unethical and manipulative advertisements which creates a false and deceptive image of the product in the mind of customers and consumers (Phillips1997). The situation is also grave in the services sector, especially in public sector enterprises where consumers are often victims of indifference, humility and harassment (Choi and Chandler,2015;Kumar and Prakash 2019b).

There have been different laws and legislation passed by the parliament and enacted by various governments to ensure safeguards of consumers (Milne et al., 2004). The most noticeable legislation among them has been the passing and implementation of consumer protection Act, 1986 which was recently amended as the Consumer Protection Act, 2019 (Umesh, 2019). The recent amendment has put a greater onus on the rights of the consumer (Sharma and Chatterjee, 2020). For the successful implementation of the Act, the consumers must be aware of their legal rights as well as the grievance redressal system in case of being cheated or deceived by the seller (Kumar and Prakash, 2019a; Kumar et al., 2020). However, there is a drought of empirical research which measures the awareness regarding the act in general and the consumer protection agencies; which were formed as a part of a recommendation by the act; in particular.  Although, the government is attempting to generate awareness about the campaign through mass media promotional messages and campaigns such as “JaagoGraahakJaago”, its success or failure in generating awareness has not been quantified.

The objectives of this paper are to analyze the level of awareness of Indian consumers with regards to the various tool of consumer protection such asConsumer Guidance Society, Consumer Helpline number, Consumer Protection Act 2019, Consumer Redressal Forum etc. provided by the Indian Government and to find out the relationship between the awareness level and consumer exploitation. This study attempts to assist policymakers, consumer guidance society and legislative in policy formulation and necessary remedial measures which may safeguard the consumers from several malpractices of sellers and manufacturers.

Literature review

The concept of consumer protection and consumerism has emerged from the developed world. In 1962, the then president of the United States of America; John F. Kennedy, raised the concept of consumer protection in USA legislature for the first time. Since then the terms” consumer protection” and “consumerism” have gained momentum. The term consumerism is significantly perceptual and has been defined differently by several scholars (Swagler, 1994).There have been several studies regarding the access of the terms in various developing countries including India. It has been established that the vulnerability of Indian consumers due to lack of education, awareness and organization has reduced the accessibility of consumerism from them (Akram1994; Viswanathan et al., 2021) and it is essential to make them aware of their rights (Patil2011; Kumar et al., 2020). The scholars have also stressed on focus areas which are vital for the awareness in India. Usage of Mass media tools such as newspaper, television and radio advertising along with a reasonable increase in literacy level has been cited as some important tools of increasing consumer awareness(Agnihotri et al. 2011; Shukla and Babin, 2013; Singh and Sharma, 2013; Kumar, 2020; Khandelwal & Bajpai, 2011). The need fortheincreasing level of awareness regarding the consumers among sellers has also been emphasized to develop improved consumer relationship and long-termretention (Sharma, 2017; Thavarajah et al., 2019; Khan et al., 2020; Kumar and Prakash, 2019).The speed and frequency of the actions taken by the government to improve consumer awareness are also essential (Chaudhry and Stumpf, 2011; Lian et al 2018; Kaushal and Kumar, 2016).

Several academicians have established the various levels and channels of consumer exploitation such as high price, spurious quality, adulteration etc. (Bond, 2015; Kumar and Kaushal, 2017) The situation has dire consequences in India as even after several years of Independence, the increasing socio-economic equality and an increasing poverty act as major hindrances in ensuring consumer protection and rights (Raju and Asifulla, 2013).It has been established that even as the issue of consumer protection has gained momentum in underdeveloped and developing countries, (Moreira2019; Kumar, 2020) their governance is relatively incompetent in ensuring consumer rights as against those in developed countries (Andreasenand Best, 1977; Khan et al., 2020; Kumar and Kaushal, 2017).Several violations in the supply chain of products along with a large number of frauds, faulty measurement, inferior quality of goods, hiding of product specification information, etc. are some of the common features of developing and underdeveloped countries(Dabes1997; Fox 2018; Roy and Srivastava, 2021). A very surprising fact is that even those consumers who are fully aware of the consumer protection act are not aware of the rights and grievance redressal mechanism which has been designed to safeguard their rights (Eovaldi andGestrin, 1971; Matnuh, 2021; Sharma and Kumar, 2021). It has been estimated that around 75% of the Indian population is not aware of the procedure of filing the suit in consumer forum(Sharma, 2018).  A major revelation in this study is the high level of institutional demotivation faced by the deceived consumer as it has been found in this study that 35% officers of the consumer forum discourage the consumer from filing a case.

Research Model and hypothesis

This paper offers a model that attempts to establish a relationship between the two components, execution of objectives, consumer characteristics and awareness level of consumers. As an outcome, a conceptual model is established as depicted in figure 1.

Figure 1:  A two-component relationship model

Methodology

Data Collected

The study is based on the primary data, which is collected from a structured questionnaire through an online and offline survey of 211 respondents. Majority of the respondents are from Uttar Pradesh and Haryana which are adjacent to India National capital of India. There are three sections in the questionnaire, the first section deals with the socio-demographic profile of the respondents. While the next section comprises questions regarding awareness and in the last sections, responses have taken on exploitation. Responses have been taken on five-point Likert scale ranging from 1 to 5, where 1 represent strongly disagree and 5 shows the strongly agree.Collected data has been examined using SPSS 22. Simple statistical tools such as disruptive analysis, analysis of variance (ANOVA) and cross analysis are used to analyze the data. Analysis of variance is applied to explore the difference between aware and unaware consumer regarding the various parameter of consumers exploitations.

Analysis

The authors have collected responses from 211 respondents. To ensure heterogeneity of the data, equal weightage has been given to ensure responses from males as well as females. Occupational heterogeneity has also been maintained by ensuring diverse coverage covering businesses, service class as well as students. The profiling of the respondents can be analyzed in detail through table 1.

Table 1: Demographic profiling of respondent

Table 2 Awareness level of consumer support mechanism across professions.

It can be referred from table 2 that across all occupational segments, more than 70% of the respondents are not aware of consumer helpline number, however, there is a significantly larger amount of awareness regarding the consumer protection act 2019 as 82.4% of the respondents are aware of the existence of this act. This may be possible because of the recent developments and a large scale of coverage by vernacular mass media.  There is also a reasonable level of awareness regarding consumer guidance society of India.

Table 3 Awareness level of consumer support mechanism across Gender.

From the available data, the silver lining is a large amount of awareness among females regarding consumer protection act 2019 and consumer guidance society of India. The results are of significant importance as the females of the sample states are inferred as comparatively less involved in purchase decisions. The level of awareness is significantly less regarding the helpline number, however, female respondents have outperformed in that aspect as well as 29.4%  females are aware regarding that as against 23.5% males.

Table 4: Awareness level of consumer support mechanism across various income levels.

Among different income levels, the highest amount of awareness of the dedicated consumer helpline number is present in the income group of more than 2 lac.whereas, for consumer guidance society of India, the highest level of awareness can be seen in the income group of less than 50 thousand. This result displays significant variation from the general perception that higher income level is directly proportional to increased awareness regarding consumer protection mechanism.

Table 5: variance Analysis for awareness level of Consumer Helpline Number across the exploitation parameter.

The variance analysis regarding the awareness level of consumer helpline number reveals that the mean value of exploitation in measurement is relatively low for aware consumers in comparison to the unaware consumer. It establishes that aware consumers are less prone to  exploitation in measurement. However, from ANOVA results,it can be concluded that there is no significant difference in aware and unaware respondents regarding measurement exploitation.on the other hand,the analysis reflects that reduced awareness leads to a higher probability of exploitation in quality parameters. The analysis also reveals that a high amount of awareness act as a protection tool for consumers to protect themselves from becoming a victim of black-marketing practices.

Table 6: Variance analysis for awareness level of Consumer Guidance Society across the exploitation parameter.

Variance analysis for awareness level towards consumer guidance society across different exploitation parameters reveals that the mean value of exploitation in measurement is low for aware consumers in comparison to unaware consumers. It reveals that the consumers who are aware are less prone to exploitation in measurement. The analysis from ANOVA results also shows that there is a significant difference in aware and unaware consumers regarding measurement exploitation. Analysis of variance also reflects that exploitation in quality parameters is comparatively high for unaware consumers against that of aware consumers. Mean value of adulteration is less aware consumers compared to non-aware consumers. Therefore, there is no significant difference between present level awareness and non-awareness regarding adulteration. It also reflects that aware customers are less exposed to black-marketing in comparison to non-aware customers.

Table 7: Variance Analysis for awareness level of Consumer Guidance Protection Act across the exploitation parameter.

About consumer guidance protection act, the mean value of exploitation in measurement is low for aware consumers in comparison to unaware consumers. It reveals that consumers who are aware are less prone to exploitation in measurement. The ANOVA results also show that there is a significant difference in both sets of respondents regarding measurement exploitation. Variance analysis also indicates the direct relationship between lack of awareness and exploitation in quality parameters.It is significant at the present level. Mean value of adulteration is less in aware consumers in comparison to unaware consumers. It has a significant difference at present level awareness and unawareness regarding adulteration. The analysis also reflects that aware consumers are more immune from malpractices of black-marketing.

Conclusion

Although there have been various reforms and legislation on consumer rights protection and awareness, a lot of efforts are required to enrich and enhance consumer protection in developing countries such as India where the conditions are much in contradiction with the prescribed laws and legislations. The situation has not improved even after the economic reforms of 1991. On the contrary, several shreds of evidence suggest that it has further deteriorated. The outcome of this research indicates in that direction. Despite a large uprising and growth of information technology in India, it is a matter of concern that only 26.5% of respondents are aware of the consumer helpline number in India. As a result, the consumer guidelines issued by the government are very tough to implement and monitor. It is surprising to witness that even after several years of establishment of consumer guidance society in 1966, more than 48% of the respondents are not aware of the same. The situation is the same about consumer protection act as several people are not aware of its existence even after 34 years of its implementation. However, this study has also established that consumers who are aware of the consumer protection agencies are less prone to fraudulent practices in comparison to those who are not aware of. The present Indian government is striving hard to ensure consumer protection; the allocation of a budget of Rs. 70 crore is an indication of the importance given by the government to the matter. However, the large numbers of firms with a newer model of operations which do not require any physical establishment are posing major challenges. It is therefore very important to further strengthen the legislation which may empower the consumers.

The paper, however, has certain limitations based on sampling universe and it will be of significant curiosity to check this hypothesis on a large scale of the dataset, spanning PAN India basis. The recent events in the economy reasoning out of the pandemic will also have long term consequences on the consumer protection mechanism. The government of India has recently introduced certain changes in the essential commodities act to ensure consumer protection and prevention from exploitation on the various parameters mentioned in the present paper. As the government is facing staunch pressure on financial credibility, it will be of significant use to empirically analyze the validity and reliability of the size of government expenditure on the schemes and legislations to protect consumer rights.

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