JANUARY 20, 2002
 Economy
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 The Consumer
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No Revival Yet
The CII-Ascon Survey of 110 manufacturing and 12 services sectors reconfirms what many were fearing: that an economic revival isn't around the corner yet. The culprit is the basic goods sector, which is given a 45 per cent weightage by the survey in the manufacturing sector..

Show Me The Money
It seems the Finance Minister Yashwant Sinha is going to have a tough time balancing the government's books this fiscal end. Estimates of gross tax collections for the period April-December 2001, point to a shortfall. Unless the kitty makes up in the last quarter, the fiscal situation will turn precarious.
More Net Specials
 
 
Down The Long Road Of Consumer Rights
 

Consumers and rights? Indian manufacturers would have laughed at you if you asked that question as late as a decade ago. Actually, many will hold their sides even today. But the laughter is fading. Aggressive consumers, proactive consumer courts, and cut-throat competition are ensuring a new age.

So it might surprise you to know that the consumer movement in India had its roots in the early part of 20th century with the formation of Passengers and Traffic Relief Association, and Women Graduates Union in Bombay in 1915. The real impetus, in terms of sustained and visible campaigns and expansion, came only around the sixties, with the setting up of The Consumer Guidance Society Of India (CGSI), All India Bank Depositor's Association, Bombay Civil Trust, and the Surat Consumer Association. It was around the same time that US President John F. Kennedy reiterated his total commitment to promotion and protection of consumer interests, and the subsequent creation of The International Organisation of Consumers Union.

In 1969, the Monopolies and Restrictive Trade Practices Commission (MRTPC) was set up under the MRTP Act of 1969. MRTPC was given powers to grant interim relief, and in the absence of other quick and inexpensive redressal means, the commission filled a necessary void.

It was only in mid 1970s that consumer activism arrived in the country, what with Mrinal Gore-also known as Paniwali Bai (for her vociferous protests against the water shortage in Mumbai city), altered its face by using political means in resorting to dharnas and picketing. In 1976 Pune Grahak Panchayat was formed which used Gore's in-your-face method to fight the rampant food adulteration in their city. During 1977-80 with Mohan Dharia and later A.K. Anthony as Consumer Affairs Ministers the movement received a fillip.

In the eighties, the number of consumer groups increased rapidly and today their number stands at 1,500. ''The number can be deceptive as consumer awareness is limited to the urban pockets; the situation is still very bad in the rural and semi-urban areas,'' notes prominent consumer activist, Pushpa Girimaji.

In a landmark development in 1986 during Rajiv Gandhi's tenure, the Parliament passed the Consumer Protection Act (copra). And that put India in a unique position creating three tiers of consumer courts-district, state, and national level- with different levels of pecuniary jurisdiction. The powers of these courts were only compensatory and not punitive. The Voluntary Consumer Organisations (VCOs) have a locus standi in these courts and no fee is charged. Another milestone during the early nineties was the development of synergy among the VCOs with the formation of both state and national level federations. It began with Tamil Nadu in 1990, followed by Gujarat, Orissa, West Bengal, and Andhra Pradesh.

The nineties saw judicial activism of the kind that helped further consumer rights on a much grander scale. In its landmark judgement, the Supreme Court in 1999 came to the rescue of Delhi's populace by ordering a ban on diesel-run commercial vehicles and relocation of small industries out of residential areas. Since then, the highest courts of the land have been remarkably active in providing the Indian consumer relief from the inefficiences of government and business.

From here on, there will of course be the odd holdover, but for the consumer, there will be no looking back.

With hypermarkets having arrived, shopping is now an event

What Does An Urban Household Spend On?

Food and general provisions still take up a chunk of the monthly budget, and most Indian households are also spending a lot on family entertainment. As expected, children's education remains a very high-spend area. Travelling and vehicle-maintenance account for a significant expenditure head, perhaps a reflection of the sorry state of our public transport systems. The real surprise, however, is the spend on servicing loans and interest payments, which is next only to food and utility bills. Has the credit culture arrived?

The Potential Of The Middle-Class Spiral

The socio-economic structure of urban India remains bottom-heavy, with sec d households accounting for over 40 per cent. However, the pyramid shows signs of bulging at the middle, with sec b and c households accounting for another 40 per cent. There is enough room for all kinds of markets to flourish, right from luxury goods targetting the nearly two-million sec a1 households, to small-size, low-value packaged goods in tea/soap/shampoo and even cough syrup, now in pouches, targeted at sec c, d, and e. But do your homework well, because the sec categorisation does not take that all important factor, income, into consideration.

PHASES IN INDIAN CONSUMERISM: A TIMELINE
The progress from a colonised identity to a demanding customer.

Spencer's the first retailer

1863 India's first organised retailer Durant & Spencer sets up shop in Chennai

1953 Air India launched

1953 Indian Airlines launched

1957 Hindustan Motors starts manufacturing the Ambassador

1961 Bajaj Auto starts manufacturing scooters

1977 Coca-Cola exits India after being asked to disclose concentrate formula

1978 India's first television commercial aired

1982 Introduction of colour transmission on television

1982 Food Specialities Ltd launches Maggi instant noodles

1983 Maruti 800 is launched

Indira Gandhi at the Maruti launch

1984 Country's first 100 cc bike, Hero Honda CD 100, rolls out

1985 Minicomp launches India's first personal computer

1990 Pepsi Cola is launched

1991 With the Gulf war raging in the backdrop, satellite TV enters the Indian household; Visa launches the first credit card in India

1992 Launch of the first private airline, Damania Airways

1993 Private FM channels take time slots on AIR. Coke returns to India after liberalisation

1995 ATMs spring up; Hutchison Max launches India's first cellular service in Mumbai

1996 McDonald's opens its first Indian restaurant at Vasant Vihar New Delhi. A 1.5 km-long queue forms outside

1997 Toll-free telephone services introduced

2001 Quantitative restrictions abolished. Foreign consumer goods flood markets. Insurance sector privatised

The Reign Of The Kirana Store

For all the hype associated with the huge Rs 60,000-crore opportunity waiting for organised retail in the country, the Indian consumer still shops at the street-corner kirana store for her groceries and gives those spanky new shopping-malls a miss. The dusty ubiquitous bazaars lord it over the urban landscape.

A Walmart won't be able to shake this foundation of the economy

For all the investments that most branded apparel marketers have made on exclusive and franchised stores to provide the consumer a ''complete brand experience'', nearly 80 per cent of all apparel sold in the country is still bought from independent mom-and-pop multi-brand stores. Ditto for consumer durables. The only exception is footwear, where nearly 45 per cent prefer an exclusive brand store, perhaps indicating the category's pre-sold status, primarily because there was so little to compare between brands, anyway.

But surely Indian retail habits are changing. Organised retailers like RPG Group Shoppers' Stop and Tata's Westside, are quickly adding economy of purchase, the hitherto missing link of organised retail in the country, with ease and experience of shopping. Shopping may prove less expensive at organised retailers, what with discount store-format retailing making an entry late last year with the launch of Big Bazaar by Pantaloon Fashions in Kolkata, Hyderabad, and Bangalore.

 

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