Consumerism in India

Chapter Layout

1. Consumerism in India (Brief History)

2. History of Consumerism in India – Detailed note
3. Impact of Consumerism

Consumerism in India (Brief history)

Consumerism in India has a history rooted in ancient practices of consumer protection and has evolved
significantly, particularly after independence, with key milestones including the Consumer Protection Act
of 1986 and the rise of consumer movements.

Here’s a more detailed look:

Ancient Roots and Early Consumer Protection:

 Ancient Civilizations:

The concept of consumer protection has ancient roots in India, with evidence suggesting that rulers in
ancient times were concerned with regulating trade and protecting the interests of buyers.

 Kautilya’s Arthashastra:

The Arthashastra, a treatise on statecraft by Kautilya, also contains provisions related to consumer
protection and fair trade practices.

 Pre-Independence Era:

While the British introduced some laws related to consumer protection, historically, consumers in India
remained largely neglected.

 Consumer Co-operatives:

In the 1940s, some freedom fighters, like Sri Tanguuturi Prakasam and C. Rajagopalachari, initiated
consumer co-operative stores to retail essential commodities, aiming to protect consumers from
exploitation by middlemen.

Post-Independence Developments:

 Rise of Consumer Movements:

The consumer movement in its present form emerged in the 1960s, with the formation of the Consumer
Guidance Society of India (CGSI) in 1966.

 Consumer Protection Act, 1986:

This act was a major milestone, providing legal safeguards for consumers against exploitative practices and
unfair dealings.

 Consumer Protection Act, 1986:

The Consumer Protection Act of 1986 was enacted based on United Nations guidelines, aiming to provide
better protection of consumers’ interests.

 Consumer Rights Day:

December 24th is celebrated as “National Consumer Rights Day” in India, commemorating the enactment
of the Consumer Protection Act, 1986.

 Consumer Protection Act, 2019:

The Consumer Protection Act, 2019 replaced the Consumer Protection Act, 1986.

 Jago Grahak Jago:

The Department of Consumer Affairs runs a multimedia campaign called “Jago Grahak Jago” to raise
awareness among consumers about their rights and redressal mechanisms.

 Consumer Organizations:

Organizations like the Mumbai Grahak Panchayat continue to work towards consumer welfare by
organizing the procurement and distribution of essential items to their members.

Factors Contributing to the Growth of Consumerism:

 Economic Growth:

India’s economic growth has led to increased disposable incomes, enabling a larger section of the
population to spend on non-essential goods and services.

 Demographic Dividend:

India’s large and youthful population forms a significant consumer base, contributing to increased
consumer spending.

 Urbanization:

Rapid urbanization has resulted in lifestyle changes and increased exposure to global trends, further
fueling consumerism.

 Advertising and Marketing:

The influence of advertising and marketing plays a significant role in shaping consumer tart-ups and
preferences.

 Consumer Activism and Social Media:

Indians have realized their power as consumers, and social media enables activism at scale.

Challenges and Future Directions:

 Sustainability:

The accelerating growth of consumerist ideology and the consumption economy will bring sustainability
challenges.
  Unorganized and Uninformed Consumers:

Consumers, especially in India, are often unorganized and relatively uninformed, making them susceptible
to deceptive advertising and misleading sales promotion strategies.

 Need for Stronger Regulation:

There is a need for stronger regulation and enforcement of consumer protection laws to ensure that
consumers’ rights are adequately protected.

 Consumer Education and Awareness:

Raising consumer awareness about their rights and responsibilities is crucial for fostering a responsible and
informed consumer culture.

Historical background of consumerism in India

Consumer Protection has its deep roots in the rich soil of Indian civilization, which dates back to 3200 B.C.
In ancient India, human values were cherished and ethical practices were considered of great importance.
However, the rulers felt that the welfare of their subjects was the primary area of concern. They showed
keen interest in regulating not only the social conditions but also the economic life of the people,
establishing many trade restrictions to protect the interests of buyers

Consumer Protection in Ancient India

In ancient India, all sections of society followed Dharma-sastras “Dharma”, which laid out social rules and
norms, and served as the guiding principle governing human relations. The principles of Dharma were
derived from Vedas. Vedas were considered the words of God, and law was said to have divine origin
which was transmitted to society through sages. Thus, Vedas were the primary sources of law in India.

Many writers and commentators of the ancient period documented the living conditions of the people
through their innovative and divine writings, including Smriti tradition and sruti revelation, and also
prescribed codes to guide the kings and rulers about the method of ruling the State and its subjects.
Consumer protection was also a major concern in their writings.

Manu Smriti

Manu Smriti describes the social, political and economic conditions of ancient society. Manu, the ancient
law giver, also wrote about ethical trade [Link] prescribed a code of conduct to traders and specified
punishments to those who committed certain crimes against buyers. For example, he referred to the
problem of adulteration and said “one commodity mixed with another must not be sold as pure, nor a bad
one as good not less than the property quantity or weight nor anything that is at hand or that is
concealed.”

The punishment “for adulterating unadulterated commodities and for breaking gems or for improperly
boring them” was the least harsh. Severe punishment was prescribed for fraud in selling seed corn: “he
who sells for seed-corn that which is not seed-corn, he who takes up seed already sown and he who
destroys a boundary mark shall be punished by mutilation.”

Interestingly, Manu also specified the rules of competency for parties to enter into a contract. He said “a
contract made by a person intoxicated or insane or grievously disordered by disease and so forth or wholly
dependent, by an infant or very aged man, or by an unauthorized party is invalid.” During the ancient
period, the king had the power to confiscate the entire property of a trader in two instances:

1. When the king had a monopoly over the exported goods; and

2. When the export of the goods was forbidden.

There was also a mechanism to control prices and punish wrongdoers. The king fixed the rates for the
purchase and sale of all marketable goods. Manu said “man who behaves dishonestly to honest customers
or cheats in his prices shall be fined in the first or in the middle most amercement.”There was a process to
inspect all weights and measures every six months, and the results of these inspections were duly noted.

All these measures show how effective ancient society was in regulating the many wrongs of the market
place. These measures also show how developed the system was in identifying the market strategies of
traders. Thus, Manu Smriti effectively dealt with various consumer matters, many of which remain of great
concern in modern legal systems.

Kautilya’s Arthasastra

Written subsequent to Manu Smriti, Kautilya’s Arthasastra18 is considered to be a treatise and a

prominent source, describing various theories of statecraft and the rights and duties of subjects in ancient
society.19 Though its primary concern is with matters of practical administration,20 consumer protection
occupies a prominent place in Arthasastra. It describes the role of the State in regulating trade and its duty
to prevent crimes against consumers.

Between 400 and 300 B.C there was a director of trade whose primary responsibility was to monitor the
market situations. Additionally, the director of trade was made responsible for fair trade practices. The
director of trade was required to be “conversant with the differences in the prices of commodities of high
value and of low value and the popularity or unpopularity of goods of various kinds whether produced on
land or in water and whether they… arrived along land-routes or water-routes, and also should know about
suitable times for resorting to dispersal or concentration, purchase or sale.” The director of trade advised
to:

Avoid even a big profit that would be injurious to the subjects. . . . He should not create a restriction as to
time or the evil of a glut in the market in the case of commodities constantly in demand.”

During Chandragupta’s period in which Kautilya lived, good trade practices were prevalent. For example,
“Goods could not be sold at the place of their origin, field or factory. They were to be carried to the
appointed markets (Panya Sala) where the dealer had to declare particulars as to the quantity, quality and
the prices of his goods which were examined and registered in the books.” Every trader was required to
take a license to sell. A trader from outside had to obtain permission. The superintendent of commerce
fixed the whole-sale prices of goods as they entered the Customs House.

He allowed a margin of profit to fix retail prices. Speculation and cornering to influence prices were
prohibited. Thus, the State bore a heavy responsibility for protecting the public against unfair prices and
fraudulent transactions. There were severe punishments for smuggling and adulteration of goods. For
example, public health was guarded by punishing adulteration of food products of all kinds, including
grains, oils, alkalies, salts, scents and [Link] during Chandragupta’s period, easy access to justice
for all, including consumers, was considered of great importance.

The king was the central power to render justice. According to Kautilya, “The king should look to the
complaints of the people of the town and village in the second part of the day. The mobile and circuit
courts worked at night, when necessity arose. They also must have worked on holidays in urgent
matters.”The king was required to pay full attention to the truth and he was primarily responsible for
administering justice.

Consumer Protection in Medieval Period

In the medieval period, consumer protection continued to be of prime concern of the rulers. During
Muslim rule, a large number of units of weights were used in India. During the Sultanate period, the prices
used were determined by local conditions. During the rule of Alauddin Khalji, strict controls were
established in the market place. In those days, there was unending supply of grain to the city and grain-
carriers sold at prices fixed by the Sultan. There was a mechanism for price enforcement in the market.
Similarly, shop-keepers were punished for under weighing their goods.

Consumer Protection in Modern Period

In the modern period, the British system replaced the age old traditional legal system of India. However,
one of the outstanding achievements of British rule in India was “the formation of a unified nationwide
modern legal system.”During the British period, the Indian legal system was totally revolutionized and the
English legal system was introduced to administer justice. However, it is important to note that the
traditions and customs of the Indian legal system were not ignored.

Some of the laws which were passed during the British regime concerning consumer interests are: the
Indian Contract Act of 1872, the Sale of Goods Act of 1930, the Indian Penal Code of 1860, the Drugs and
Cosmetics Act of 1940, the Usurious Loans Act of 1918, and the Agriculture Procedure (Grading and
Marketing Act) of 1937. These laws provided specific legal protection for consumers.

For fifty-five years, the Sale of Goods Act of 1930 [SGA] was the exclusive source of consumer protection in
India. The SGA, drafted with precision, is “an admirable piece of legislation.” It is also praised as a
“Consumer’s Charter.” The main protection for the buyer against the seller for defective goods is found in
Section 16 of the Act .It provides exceptions to the principle of Caveat emptor (“let the buyer beware”) and
the interests of the buyer are sufficiently safeguarded.

Consumer protection was also provided within India’s criminal justice system. The Indian Penal Code of
1860 has a number of provisions to deal with crimes against consumers. It deals with offenses related to
the use of false weights and measures,49 the sale of adulterated food or drinks, the sale of noxious food or
drink, and the sale of adulterated drugs.

Consumer protection legislation enacted after India’s independence from Britain include: the Essential
Commodities Act of 1955, the Prevention of Food Adulteration Act of 1954 and the Standard of Weights
and Measures Act of 1976. A benefit of these acts is that they do not require the consumer to prove mens
rea.

The Indian Consumer Protection Act of 1986 and the Evolution of a New Legal Culture.

The Indian legal system experienced a revolution with the enactment of the Consumer Protection Act of
1986 “CPA”, which was specifically deigned to protect consumer interests. The CPA was passed with
avowed objectives. It is intended to provide justice which is “less formal, and involves less paper work, less
delay and less expense”. The CPA has received wide recognition in India as poor man’s legislation, ensuring
easy access to justice.

However, the CPA simply gives a new dimension to rights that have been recognized and protected since
the ancient period. It is rightly said that “the present-day concern for consumer rights . . . is not new and
that consumer’s rights like the right to have safe, un-adulterated and defect-free commodities at
appropriate prices has been recognized since ancient times.

Conclusion
Consumer protection is always a matter of great concern. In ancient India, effective measures were
initiated to protect consumers from crimes in the market place. Ancient law givers ably described various
kinds of unfair trade practices and also prescribed severe punishments for wrong doers. Mainly, acts of
adulteration and false weights and measures were seriously dealt with. In ancient India, the king was the
supreme authority to render justice, but his authority was circumscribed by the rules of Dharma.

In the medieval period, some Muslim rulers developed well organized market mechanisms to monitor
prices and the supply of goods to the markets. During the British period, the modern legal system was
introduced in India and many laws were enacted to protect the interests of consumers generally.

Today, the civil justice system is tainted with deficiencies that discourage the consumer from seeking legal
recourse. However, the Consumer Protection Act of 1986, which provides easy access to justice, has
brought a legal revolution to India as a result of its cost effective mechanisms and popular support. At the
same time, these mechanisms pose a great legal challenge to the traditional courts which conduct
litigation in orthodox ways. In this age of consumers, the regime of Indian consumer law will undoubtedly
rule Indian markets and bestow a new phase on the existing Indian legal structure with its strong ancient
legal foundations.

Impact of Consumerism
Introduction

The advent of consumerism in India, accelerated by the economic liberalization of 1991, has fundamentally altered
the socio-cultural fabric of the nation.

 This shift represents a complex interplay between global market forces, changing economic policies, and
evolving cultural norms.

Body

Consumerism Reshaping Consumption Patterns:

  From Frugality to Indulgence: Traditional values of saving and thrift are being replaced by a culture of
spending and immediate gratification.

o India’s household savings rate has declined from 22.7% of GDP in 2020-21 to 18.4% in 2022-
23, indicating a shift towards consumption.

 Rise of Aspirational Consumption: Consumption is no longer just about fulfilling needs but about projecting
social status and identity.

o The luxury goods market in India is forecasted to reach a revenue of USD 7.86 billion in
2024, outpacing many developed markets.

 Democratization of Luxury: Previously exclusive products are now accessible to the middle class through
EMIs and affordable luxury segments.

o This has led to a blurring of class distinctions based on consumption patterns.

 Digital Consumption Revolution: E-commerce has transformed buying tart-ups, especially in Tier 2 and Tier
3 cities.

o India’s e-commerce market is expected to reach USD 200 billion by 2026, up from USD 38.5 billion
in 2017.

 Shift in Food Consumption: Move from home-cooked meals to packaged and restaurant foods.

o This has contributed to a rise in lifestyle diseases, with The prevalence of diabetes in India has
risen from 7.1% in 2009 to 8.9% in 2019.

Transformation of Lifestyles:

 Changing Family Structures: Nuclear families are becoming the norm, altering household consumption
dynamics.

o This has led to a boom in household appliances and convenience products markets.

 Time as a Commodity: Increasing value placed on leisure time has given rise to a service economy. This has
led to the services sector contributing over 50% to India’s GDP.

 Technology Integration in Daily Life: Smartphones and internet penetration have changed how Indians
communicate, work, and entertain themselves.

o In 2023, internet penetration in India grew 8% year-on-year.

 Health and Wellness Focus: Growing awareness about health has created new markets for organic foods,
fitness equipment, and wellness services.

o According to IMARC report Indian India organic food market is expected to exhibit a CAGR of 25.25%
during 2022-2027.

Shift in Social Aspirations:

 Career Choices and Entrepreneurship: Shift from job security to high-risk, high-reward career options.

o India has emerged as the world’s third largest startup ecosystem with over 1.25 lakh tart-
ups and 110 unicorns, reflecting changing aspirations.
  Redefinition of Success: Success increasingly measured in material terms rather than spiritual or intellectual
achievements.

o This has led to increased stress and mental health issues, with over 60 to 70 million people with
mental disorders in India.

 Global Citizenship Aspirations: Desire to be seen as global citizens through consumption of international
brands and experiences.

o This has led to a hybridization of Indian culture, blending global trends with local traditions.

Conclusion

Consumerism has undeniably transformed Indian society and culture. While it has contributed to economic growth
and improved living standards for some, it has also brought about challenges. Fostering a culture of responsible
consumption and sustainable lifestyles is crucial for the long-term well-being of individuals and society.

***

Compiled by Prof. D. Priyadarshini