Consumer Awareness in Rural India

- An Empirical Study

Project Directors

Prof. Suresh Misra

Ms. Sapna Chadah

Project Associates

Dr. Amit Kumar Singh

Virendra Nath Mishra

Sponsored by
Department of Consumer Affairs,
Ministry of Consumer Affairs, Food & Public Distribution
Government of India, New Delhi

Conducted by
Centre for Consumer Studies
Indian Institute of Public Administration
Indraprastha Estate, New Delhi-110002
 Preface
The welfare of the consumers lies in the fulfilment of their
their normal and legitimate
expectation with regards to the goods they purchases and the services they avail. In a
country like India where all the consumer protection laws are in place, the consumers are
not really aware of them and the mechanism in place to redress their grievances. Those
who know the laws know that the process is very slow and cumbersome. There are a
number of steps taken to protect the rural consumer but without much impact due to the
prevailing socio - economic conditions of the rural consumers.
consumers. They generally base their
purchasing decisions on the advertisement campaigns and promotional strategies
employed by the organizations and also lack choice.
choice.

The rural markets, which were earlier ignored by most of the big international
market players,
players, are now being seen as a land of great business opportunity. As the
disposable income of the masses is growing, more and more corporate houses are entering
into the rural markets with their new goods and products. Due to this marketing for rural
consumers
consumers is becoming more complex. In a country like India, where a substantial
number of the rural people are living below the poverty line, having high level of
unemployment and poor literacy level; consumer awareness continues to remain low.
Several studies
studies have shown that rural consumers are generally ignorant and also
unorganised. Under these circumstances, the sellers or the manufacturers, exploit the
consumers.

Though, the consumers in India have been provided with various safety measures
against their
their exploitation, still the sellers and producers are hoarding and black-
black-
marketing the essential goods, resorting economic corruption and frequently cheating
the consumers. Rural markets are full of sub-
sub-standard goods and duplicity of branded
goods is another
another major problem in rural areas. As there is no check on production and sale
of such products in the rural markets, many of these products have become health
hazards. The expansion of service sector has added to the problem. Services like insurance,
banking,
banking, electricity, medical have expanded in the rural areas without any checks and
balances and the rural consumers continue to be exploited by the service providers.
Deficiency in services is a major area of concern. Spurious drugs are causing major
health hazards.
hazards. The vulnerable sections are mainly women, children and farmers. It is

i
common to find that farmers are supplied defective seeds, adulterated pesticides and other
sub standard commodities. In the rural markets and hats spurious goods are very
common. The expansion of mass media has further given impetus to consumerism in the
rural areas. Therefore, now it is widely believed that the fate of the consumers cannot be
left to the market forces. In view of this the Government of India has taken a number of
legal measures to protect the consumers by enlarging the scope of consumer protection. Of
the various legal remedies, the Consumer Protection Act, enacted on 24th December 1986 is
the principal legal remedy available to the consumers. This is an important Act which
seeks to provide better protection of the interests of the consumers.

According to experts, the four factors which influence demand in rural India are-
are-
access, attitude, awareness and affluence. Some companies have successfully used this to
influence
influence the rural market for its shampoos in sachets. The sachet strategy has proved so
successful that, according to an ORG - MARG data, 95 percent of total shampoo sale in
rural India is by sachets. The company had developed a direct access to markets through
through
wholesale channel and created awareness through media, demonstration and on ground
contact. This changed the attitude of the villagers. Today, the young and the educated in
the villages are already large in number and this number is increasing. Already,
Already, 40
percent of all those graduating from colleges are rural youth. They are the decision
makers and are not very different in education, exposure, attitudes and aspirations from
their counterparts at least in smaller cities and towns.

Consumers are exploited

exploited when they are cheated in any form or when not informed
adequately about the product. Consumer exploitation is in many ways. They may be
exploited by giving incomplete or wrong information. They may be exploited by sellers
who may weigh less or measure
measure wrongly. Sometimes, a consumer may be given low
quality of goods. One of the very common and a serious problem by which a consumer
may be exploited and cheated by the shop-
shop-keeper is by providing impure or adulterated
goods with harmful substances. Food adulteration
adulteration is a serious problem in the rural
markets where the administrative machinery is not able to tackle this menace. As far as
the service sector is concerned a large number of complaints regarding medical services,
banking, insurance and electricity
electricity go unreported as the consumer is unaware of the
redressal mechanism. Cases of medical negligence are common in the rural areas but
then the consumer has no choice.

ii
 The present study has been conducted in five states of India namely Uttarakhand
from North,
North, Maghalaya from East, Gujarat from West, Tamilnadu from South and
Madhya Pradesh from Central India. The study attempts to evaluate the changing
profile of the rural consumers in India, assess the level of awareness, of rural consumers
on various consumer
consumer protection measures initiated by the Government of India and other
agencies, assess the rural consumers’ current knowledge, attitudes, behaviour and
practices while purchasing goods or availing services, examine the nature of unfair trade
practices in the
the rural areas, assess the level of satisfaction of the rural consumers on
various products and services available in the rural areas and to draw conclusions from
the study and suggest remedial measures for better protection of the rural consumers.

We would
would like to acknowledge the support extended by the Department of
Consumer Affairs, GoI in conducting this study. We are particularly thankful to Shri.
Rajiv Agarwal, Secretary, Shri Rakesh Kakkar, Additional Secretary and Shri G.N
Shreekumaran, Joint Secretary,
Secretary, Department of Consumer Affairs, GoI for their help. We
would also thank Dr. Rakesh Hooja, Director IIPA, New Delhi for his encouragement and
guidance. Our thanks are due to our colleagues in the Centre for Consumer Studies
particularly Amit, Virendra and Pankaj for not only providing valuable inputs and
rendering support in completing the study but also in taking up most of the field work..
We also acknowledge the use of data from various sources for which appropriate references
are given.

We are confident
confident that this report will be useful to various stakeholders and policy
makers to reorient policies and programmes for better protection of the rural consumers.
Unless the consumer movement reaches the village, the consumers will continue to be
exploited.
exploited.
Suresh Misra
Sapna Chadah
20.9.2009
New Delhi

iii
 Contents
Page No.
Preface i-iii

1. Chapter I Introduction 1-14

2. Chapter II Profile of Rural Consumers 15-42

3. Chapter III Level of Awareness among Rural Consumers 43-84

4. Chapter IV Findings & Recommendations 85-91

5. Annexure 92-94

iv
 CHAPTER I

INTRODUCTION

Globalisation, liberalisation and privatisation have transformed the Indian

economy into a vibrant, rapidly growing consumer market. As a result the markets
are flooded with different kinds of goods and services, substantially effecting and
changing the purchasing pattern of the consumers. The rural markets, which were
earlier ignored by most of the big international market players, are now being seen
as a land of great business opportunity. As the disposable income of the masses
is growing, more and more corporate houses are entering into the rural markets
with their new goods and products. Due to this marketing for rural consumers is
becoming more complex.

In a country like India, where a substantial number of the rural people are
living below the poverty line, having high level of unemployment and poor literacy
level; consumer awareness continues to remain low. Several studies have shown
that rural consumers are generally ignorant and also unorganised. Under these
circumstances, the sellers or the manufacturers, exploit the consumers. Though,
the consumers in India have been provided with various safety measures against
their exploitation, still the sellers and producers are hoarding and black-marketing
the essential goods, resorting economic corruption and frequently cheating the
consumers. Rural markets are full of sub-standard goods and duplicity of branded
goods is another major problem in rural areas. As there is no check on production
and sale of such products in the rural markets, many of these products have
become health hazards. The expansion of service sector has added to the
problem. Services like insurance, banking, electricity, medical have expanded in
the rural areas without any checks and balances and the rural consumers continue
to be exploited by the service providers. Deficiency in services is a major area of
concern. Spurious drugs are causing major health hazards. The vulnerable
sections are mainly women, children and farmers. It is common to find that farmers
are supplied defective seeds, adulterated pesticides and other commodities. In the
rural markets and hats spurious goods are very common. The expansion of mass

1
media has further given impetus to consumerism in the rural areas. Therefore, now
it is widely believed that the fate of the consumers cannot be left to the market
forces. In view of this the Government of India has taken a number of legal
measures to protect the consumers by enlarging the scope of consumer protection.
Of the various legal remedies, the Consumer Protection Act, enacted on 24th
December 1986 is the principal legal remedy available to the consumers. This is
an important Act which seeks to provide better protection of the interests of the
consumers.

In the present situation, consumer protection, though as old as consumer

exploitation, has assumed greater importance and relevance. Now there are laws
and policies which focus on consumer protection and welfare. Special emphasis is
being given to consumer education so that people become aware about their rights
and responsibilities as consumers and how to redress their grievances. In India
various Acts intended to protect the consumers directly or indirectly against
different forms of exploitation were enacted from time to time. However, except for
the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, all the other
Acts were mainly punitive and preventive in nature. Inspite of these Acts the
consumers did not have any effective mechanism or institutional arrangements for
the speedy redressal of their grievances and also the lack of effective popular
movement isolated the consumer and his plight only increased. Seeing the
pressure mounting from various consumer protection groups and the consumers
themselves the Parliament enacted the Consumer Protection Act in 1986.

Consumer Awareness in India

The Consumer Protection Act enacted on 24th December, 1986 is a
benevolent, unique and highly progressive piece of social welfare legislation
providing for simple, speedy and less expensive remedy for the redressal of
consumer grievances in relation to defective goods and deficient services.
Consumer Protection Act is a weapon in the hands of consumers to fight against
exploitation by traders, manufacturers and sellers on one hand and providers of
services on the other. The Act provides effective, people oriented, broad based
and efficient remedy to consumers against unfair dealings and exploitation. It was

2
enacted with an objective to provide better protection of the interests of the
consumers and to make provision for the establishment of Consumer Councils and
other authorities for the settlement of consumer disputes. Unlike other laws, which
are basically punitive or preventive in nature the provisions of the Act are
compensatory. It is a matter of great satisfaction that we can legitimately boast that
we now have in our country a statute, which provides more effective protection to
the consumers than any corresponding legislation in force in countries, which are
considered to be much more advanced and industrialised.

The Act contemplates establishment of adjudicatory and advisory

structures in the form of consumer fora and council structure respectively for the
protection of consumers’ rights. It extends to the whole of India except the State of
Jammu and Kashmir which has its own Consumer Protection Act. The Act applies
to all goods and services unless any good or service is expressly excluded by the
Central Government by notification. The Act extends to all sectors -public, private
or cooperative. The Consumer Protection Act is an alternative and additional
remedy to the remedies already available to the aggrieved persons/consumers by
way of civil suit.

To provide cheap, speedy and simple redressal to consumer disputes, three

tier quasi-judicial machinery is set up at each District, State and National levels
called District Forums, State Consumer Disputes Redressal Commission and
National Consumer Disputes Redressal Commission respectively. At present,
there are 662 District Forums, 35 State Commissions with apex body as a National
Consumer Disputes Redressal Commission (NCDRC). These quasi-judicial bodies
are required to follow summary procedure and Principles of Natural Justice to
provide quick and speedy justice to the consumers.

After the enactment of the Consumer Protection Act, 1986, the first
independent evaluation study of the implementation of this Act was done through a
study conducted by IIPA in 1994. It was found that large majority of the consumers
belonging to various categories and income groups were completely ignorant of
the existence of the CPA and the redressal agencies created under it. Eleven

3
years later, according to a survey commissioned through ORG Centre for Social
Research by the C&AG, the position had improved only marginally. The survey
was conducted in July-August, 2005 in 25 States/ UT’s covering 48,732
consumers, 6237 complaints, 249 manufacturers / service providers, 39 NGOs and
34 laboratories. The report of ORG-MARG revealed that: 1
• Sixty-six percent of the consumers interviewed were not aware of consumer
rights and 82 percent were even unaware of the Act.
• Nearly 49 percent of the aware consumers had come to know about the Act
only in the last 4 years though the Act had been in existence for the past 18
years.
• Overall, only 13 percent of the consumers reported to have been aware of
the existence of any redressal agency.
• A majority of the complainants came to know about the redressal agencies
through electronic media (48 percent), print media (61 percent) and
friends/relatives (68 percent,), NGOs were not a popular source of
awareness as only 4.9 percentage of the complainants attributed their
awareness to the work of NGOs.
• The consumers were not aware of the features of the simple and
inexpensive system of lodging complaint in the absence of any focused
awareness programme launched by the Ministry or the States in this regard.
The beneficiary survey carried out by ORG – MARG revealed that 78
percent of the respondents were carrying a negative opinion of the efforts
made by the government or had no idea about the same and were not
aware that they could directly represent themselves in the Consumer
Forums. It is pertinent to note that lack of awareness in this regard had
deprived the consumers of the benefit of the adjudication mechanism as out
of the total expenditure of ` 3387 incurred by the consumers on each case
in the Consumer Forum on an average, as much as ` 2787 (82 percent)
was the expenditure on advocates.

Therefore, one of the major hindrances in the consumer movement in the

country is the lack of awareness among the consumers. The consumers apart from
being unorganized do not have the mechanism to understand their rights and
responsibilities. These studies reveal not only lack of awareness but lack of
consumer education as well. A lot more needs to be done on this front. The right to
consumer education has been recogonised under the Consumer Protection Act,

1
CAG, Performance Audit of the Implementation of the Consumer Protection Act and Rules-Report
of the Comptroller and Auditor General of India for the year ended March 2005, Union Government
(Civil), Performance Audit, 2006, p. 9

4
1986. However, unless awareness increases realizing the rights to the consumers,
consumer education remains a distant dream.

Need for Consumer Education

The need for consumer education has increased over time as today the
consumers operate in an increasingly complex marketplace and are faced with
increasing amounts of information and an expanding choice of complex products
and services. As a consequence they are more exposed to fraud and require a
wider range of skills and knowledge than ever before. Consumer education is a
potent tool for empowering consumers as it equips consumers with information and
skills necessary to meet challenges posed by the markets. Through education,
consumers obtain information about the products and the services and empower
them and makes them aware of their rights and responsibilities and helps to
ensure their welfare.

Consumer education improves the position of the consumers in the

marketplace and helps them make informed choice and thereby enhance their
welfare. It also contributes to the well functioning of the markets by promoting
effective competition. It is thus in the common interest of governments, consumers
and businesses to empower the individual consumer as much as possible through
awareness of his/her rights, knowledge of how to defend himself against various
pitfalls and to cope with the subsequent consequences, as well as the ability to act
proactively in the marketplace. According to Wells and Atherton consumer
education can be defined as:
“ a process of gaining skills, knowledge and understanding needed by
individuals in a consumer society such that they can make full use of
consumer opportunities presented in today’s complex marketplace.” 2

Most countries consider consumer education as an important tool for

consumer protection. However, the scope of consumer education differs
significantly among countries depending on the socio-economic and cultural
conditions prevailing there. Yet it generally covers one or more of the following

2
Wells, J and Atherton, M., “Consumer Education : Learning for Life”, Consumer 21, Autumn,
1998,pp. 15-20,

5
areas: consumer protection, consumer skills to help them make more informed
decisions and protection of public interest which relates to environmental and
social issues. Countries have articulated consumer education objectives in various
ways, such as laws on consumer protection; education on trade; government
programmes and strategies; and school and college curricula. High quality
programmes focused on stimulating relevant issues can engage the interest of
consumers and help equip them with the skills and knowledge to make better
choices and to resolve problems when things go wrong. Empowered consumers
are knowledgeable, confident, assertive and self reliant. Consumer education has
an important role to play in supporting those with less developed consumer
knowledge and skills. By demanding high standards from business, consumers
help promote vigorous, competitive, markets. As a tool for empowerment,
consumer education is therefore important to make markets work well for
consumers.

Structure of Consumer Education

Available literature indicates that consumer education takes many forms
and takes place in many different settings, from formal courses in schools or
universities to informal experience in families, communities and workplaces. Three
forms of consumer education are being implemented in OECD member countries
and some non-member economies which are as follows: 3

Formal education refers to learning through a programme of instruction in

an educational institution, adult training centre or in the workplace, and is generally
recognized by a qualification or a certificate. All countries acknowledge that
children and young people are particularly important targets of consumer education
as theses age groups account for an ever-increasing share of family consumption.
At the same time they are likely to be particularly vulnerable to making unwise
decisions and or falling victim to aggressive marketing. The fact that both parents
often work outside the home has led to a change in the role of parents in consumer
training. With this in mind, many countries have made consumer education

3
OECD, Promoting Consumer Education – Trends, Policies and Good Practices, OECD, 2009 pp.
11-31;

6
compulsory in primary, secondary and in some countries in upper-secondary
grades. The objectives include helping pupils to: gain knowledge of what it means
to act as informed consumers; develop and understand society’s function as a
whole and specific role of consumers; master skills to function as informed and
responsible consumers; recognize the importance of being an informed consumer.
The ultimate goal is for consumers to act spontaneously in informed, educated and
responsible ways. 4

In most countries, consumer education is integrated into the school

curriculum in an interdisciplinary way. Subjects that may include consumer
concepts are economics, mathematics, biology, chemistry, language, arts,
business education and home economics. These subjects cover a variety of issues
which are important for consumers in contemporary society, including the effects of
consumption on the environment, production and consumption in a global
perspective, health and food, product quality and safety, and financial
management. Relevant issues are thus addressed in cross-curricular themes such
as home economics, citizenship, civic education or social studies.

In addition, a variety of non-formal education tools or activities (i.e. not

included in the curriculum) complement more traditional methods. These are
websites, videos, exercise books, school magazines as well as theme days, school
competitions and contests, consumer clubs, national fairs for teachers and pupils
and special educational programmes. These non-formal teaching tools are mostly
produced by consumer associations in co-operation with parent-teacher
associations, and in some countries with other stakeholders. Consumer education
generally focuses on the primary and secondary school curriculum. However, in
some countries it also takes place in universities.

Lifelong education- There is wide consensus that learning, which is of

significance to individuals as well as to communities and societies, must extend
beyond formal education. Lifelong education covers all purposeful learning activity

4
Bannister, R. and C. Monsma, “Classification of Concepts in Consumer Education “ NASSP
Bulletin, 1982

7
“from the cradle to the grave” which aims to improve the knowledge and
competencies of all individuals who participate in learning activities. A prerequisite
for lifelong learning is a sound foundation in basic educational competencies
acquired in formal education and opportunities for further learning once persons
leave initial education and training. Practically, this includes education available at
community centres as well as loosely organized education. Lifelong learning may
take place at the individual level (e.g. self-directed learning) or at the group level
(e.g. at the workplace or within the family).

One of the fundamental features of lifelong learning is a systematic and

interconnected approach to the organization of learning rather than a fragmented
approach in which separate policies are implemented for each stage of education.
This is appropriate for consumer education, since consumers’ knowledge and
information needs to be frequently updated, and the attainment of informed and
knowledgeable consumption is a cumulative process. The adult consumers face a
more complex environment than young consumers, the range of knowledge they
need also becomes broader and more complex as they grow older.

Targeted education- It refers to a range of educational activities designed

for particular consumer groups that are considered vulnerable (e.g. women, the
disabled and the poor) to help protect them against fraudulent or deceptive
practices in the marketplace or other specific consumer–related issues. Specific
groups which are targeted in various countries in their major initiatives are: young
children, the elderly, women, people with a limiting or longstanding illness or
handicapped, populations in rural areas, unemployed persons and tourists.

These three concepts are not mutually exclusive. Lifelong education is a

broad concept that encompasses both formal and targeted education. At the same
time, several countries implement formal and/or targeted education but do not
support the lifelong learning concept. Lifelong and targeted consumer education
may be “non-formal” or “informal”:

8
 • Non-formal learning takes place through a programme but is not
usually evaluated and does not lead to certification.

• Informal learning is learning from daily work-related, family or

leisure activities.

Framework for Consumer Education

Most countries have a centralized institutional framework for consumer
education, under which the central government develops consumer education
policies which reach local areas through local governments or through regional
networks. In many countries, local governments implement policies which are
adjusted to the regional environment but they lack discretionary power. A few
countries operate consumer education policies in a decentralized way. In this case,
the central government sets the overall policy framework but major initiatives are
developed and delivered at local levels.

Other market players and stakeholders actively involved in consumer

education include:
• Consumer organizations and other civil groups whose objective is to
promote consumer education.
• Industry and trade associations and individual companies.
• Universities and educational institutions.
• Teachers’ associations, practitioners, teachers and instructors.
• Family and parents associations.
• Media

As the scope of consumer education has broadened and become more

proactive, more groups have been involved and there has been a greater focus on
influencing consumption behaviour in more conscious and critical ways. The
respective roles of the public and private sectors in enhancing consumer education
vary among jurisdictions, depending in part on their statutory situation. In general,
the provision of information and advice relating to consumer protection is mainly
the task of government and consumer organization. Yet the objective of raising
consumer awareness involves a broader range of stakeholders.

9
Key Issues and Challenges in Consumer Education
Basically consumer education faces five main challenges: 5
• Lacks of overall strategies- Most countries do not have an overall
consumer education strategy. Even in countries where lifelong consumer
education has been endorsed, little appears to have been done to
implement programmes to support such learning.
• Need to enhance the quality of education provided- According to the
country responses, the quality of consumer education could be
enhanced in terms not only of content, but also of delivery.
• Limited opportunities for education in school settings- Because of
the limited time available in the school curriculum, it is not easy to find a
place for consumer education. In addition, responses indicate that the
relevant governmental institutions do not always fully see the importance
of consumer education and that school teachers hesitate to include
consumer education in their classes.
• Lack of coherence in education initiatives- Although consumer
education in taught, there is a general lack of cohesiveness with other
relevant education policies, and it is implemented in a fragmented way.
• Lack of sufficient self-motivation for both the educated and the
educator- Some responses suggest that it is difficult for policy - makers
to promote consumer education because both the educators and the
educated are not very motivated to find and profit from the relevant
educational opportunities and information.
• Limited resources- All of these challenges require additional resources
but these are limited in many countries.

Need of the Study

Since 1986, consumer education and awareness has attracted the attention
of the Government of India. The laws can only give certain rights to the consumers,
but its functioning and implementation largely depends on the awareness and

5
OECD, Promoting Consumer Education – Trends, Policies and Good Practices, OECD, 2009 pp.
39-40

10
efforts of the consumers themselves. The problem is more acute in the rural areas.
In fact, an educated and aware person is an empowered consumer. Education
equips a person with the skill to make discerning choices, to sort out problems
effectively and to seek further information and help appropriately.

In this backdrop of ongoing efforts of Government of India to disseminate

the consumer rights to the people and to protect them from the exploitation of
market forces, the focus of the present research work is to evaluate the level of
consumer’s awareness in different parts of rural India. The reports of National
Commission for Applied Economic Research clearly reveal that the rural growth
rates have already outpaced urban ones and will continue to do so through the
next decade. Rural India accounts for more than 50% of the GDP. Out of 62.97
million households of India those are getting more than 5 lakhs per annum, nearly
28.68 million households (46%) live in Rural India. The rural market in India is
projected to be bigger than the urban market for fast moving consumer goods;
rural consumption expenditure is accounted for around 60 percent of the country's
total consumption expenditure. Hence, it is imperative to analyse the social, legal
and other measures taken in rural areas to protect the interest of consumers, as
more and more companies will try to sell their goods and products in rural markets.
The rural consumers need to be educated about their rights and adequate steps
are taken to ensure that they get the value for their money as consumers.

Objectives of the Study

The main objectives of the study are as follows:
1. To evaluate the changing profile of the rural consumers in India

2. To study the level of awareness, of rural consumers on various consumer

protection measures initiated by the Government of India and other
agencies.

3. To evaluate the rural consumers’ current knowledge, attitudes, behaviour

and practices while purchasing goods or availing services.

4. To examine the nature of unfair trade practices in the rural areas.

11
5. To assess the level of satisfaction of the rural consumers on various
products and services available in the rural areas.

6. To draw conclusions from the study and suggest remedial measures for
better protection of the rural consumers.

Methodology
The present study is an empirical research based on both primary and
secondary data. It is a blend of both descriptive and analytical methods of study.
The secondary data was collected from government publication, books, journals,
newspapers and various prominent Voluntary Consumer Organisations working in
this area. The information regarding level and satisfaction, awareness, attitude and
behaviour of rural consumers at individual and household level was gathered
through primary surveys. For the purpose an interview schedule was prepared.
Besides focus group interaction was also done. The questionnaire was subjected
to reliability by pre-testing the constructed tools by administering it to 100
consumers randomly. The questionnaire was modified based on the responses got
from the consumers.

The sample areas were selected in a way that they can best represent the
entire geographical regions of the country. Consequently, five states from different
regions of India were selected for the study. They were: Uttarakhand from North,
Maghalaya from East, Gujarat from West, Tamilnadu from South and Madhya
Pradesh from Central India. It is true that geographical location may not
necessarily be the influencing factor of people’s awareness but such a selection is
necessary to know the level of awareness among consumers, from all the parts of
the country. The sample was selected from these five states using the random
sampling technique. From each State two Districts and from each district two
blocks were randomly selected. From each block four villages were randomly
selected. It was not difficult to identify a consumer as everyone is a consumer and
either buys a product or avails of a service for consideration. The households from
these villages were selected by random sampling technique. Total sample of 2000
households was taken for investigation from 80 villages (25 household from each
village) spreading across ten Districts of five selected states. The data so collected

12
was analyzed and tabulated. Appropriate statistical methods were applied to
classify and analyze the data, collected on the subject.
Sample Area
State District Two blocks randomly selected from
each district
Gujarat Ahmedabad Daskroi Bavla
Junagarh Veraval Talala

Madhya Bhopal Phanda Berasia

Pradesh Jabalpur Sihore Kundam

Meghalaya East Khasi Hills Mylliem Mawryngkneng

Ribhoi Umsning Umling

Tamilnadu Kanyakumari Agasteeswaram Thovalai

Viudhnagar Aruppukottai Kariapatti

Uttarakhand Nainital Bhimtal Dhari

Pauri Garhwal Pauri Kot

All India
(2000)

Gujarat MP Mehalaya Tamilnadu Uttarakhand

(400) (400) (400) (400) (400)

Two Districts from each

State
(2x5 =10)

Two Blocks from each

District
(2x10 = 20)

Four Villages from each Block

(4x20 = 80)

25 HH from each village

(25x4 = 100)

13
Work plan and its phasing:

Work Plan Months

1 2 3 4 5 6
Phase 1- Identification of District
and Villages and Resource
Planning
Phase 2- Collection of Primary
and Secondary Data
Phase 3- Data Analysis and
Report writing
Phase 4- Final Report
Preparation and Plan
formulation

14
 CHAPTER II
PROFILE OF RURAL CONSUMERS

Introduction
India lives in numerous villages, scattered throughout the country. Rural
areas currently are home to nearly 70 percent of India’s population and have
historically accounted for more than half of Indian consumption. Even with
increasing urbanization and migration, it is estimated that 63 percent of India’s
population will continue to live in rural areas by 2025. In terms of economic output,
rural India accounts for almost half (48%) of the country’s economy, and the rural
markets have the potential to reach $500 billion by 2020. Thus rural areas will
continue to remain vitally important to the Indian economy. However, it is
unfortunate truth that a large percentage of this population lives in high risk and
unpredictable environment. Large section of the population lacks even basic
services like education, health, drinking water, sanitation and employment.
Providing rural India with better access to services, technology, education and
health care will reduce inequality, alleviate poverty for hundreds of millions of
India’s citizen and add an additional engine of growth to India’s bulging economy.

The rural population in India comprises the core of Indian society and
represents the real India. According to the 2001 census, there are 5, 80,779
villages in India and about 74% of Indian population lives in these villages. The
number of people living in each of these villages also varies considerably. It is
found that most of the Indian villages have a population of less than 10,000 while
there are only a few villages where more than 10,000 people live (Table 1). The
country opened up its economy in 1992 and since then due to globalisation and
liberalisation the market is flooded with new products and services. Technological
revolution and information explosion have also given tremendous boost to
consumer culture. The consumers have been sucked into the market economy and
today the market determines the needs and preferences of the consumers. This

15
consumer culture and the changing consumption pattern is now not only confined
to the urban areas but is going deep down to the rural markets. The rural markets
are the new hunting grounds for the business.

Table 1
Location and Concentration of Rural Population

Population Proportion to
Range (No of Number of Proportion to total Rural
Persons) Villages Total Village Population
Less than 200 103952 17.9 1.7
200 to 499 141143 24.3 7.8
500 to 9991 144998 25 16.8
1000 to 1999 114395 19.7 25.7
2000 to 4999 62915 10.8 29.8
5000 to 9999 10597 1.8 11.2
10000 and above 2779 0.5 7.0
Total 580779 100 100
Source: Census of India, 2001

Given the rapidity with which urban population is growing, the share of rural
population may come down to 70 percent by the turn of this century. While a
quarter (25.70 percent) of population of India is classified as urban (in 1991), only
20.83 percent of the labour force lives in cities. Rural areas thus sustain four-fifth
of the total labour force (main workers) of the country. More than two thirds (63.2
percent) of the working population is engaged in agriculture and allied activities (as
cultivators, agricultural labourers and live-stock farmer, etc. (Table 2 and Figure 1)

Table 2
Occupational Pattern of Rural population

Occupation Proportion to Total Rural

Population (in %)
Agricultural 50
Agricultural labour 27
Business 10
Non-agricultural labour 9
Salary earners 2
Not gainfully employed 2
Total Rural Population 100
Source: Census of India, 2001

16
 Though large parts of rural India continues to be abjectly poor and
dependent upon unprofitable agriculture business, yet there is a new emerging and
expanding rural India as well. This rural India is prosperous and has money power,
consisting of self employed people. Thus rural India with significant income growth
and employment diversity is a potential market for business to capture. The rural
consumers have now started demanding life improving products and services of
real quality and durables that enhance productivity and increase earning. Though
the penetration of most products in rural India is still very poor, however, a small
penetration of a large population results in a very large actual market size. Thus
rural markets are and will continue to remain attractive and important.

Figure 1
Occupation of Rural Population

Source: Census of India, 2001

PROFILE OF RURAL CONSUMERS

Sources of Rural Income

The share of rural activities in the gross National Product of the country is,
however, secularly declining. Agriculture’s share in the GDP in 1951 was 65
percent; it declined to 45 percent in 1971. In 1990-91, the contribution of
agriculture towards Gross Domestic Product (GDP) output was at 32%, which has

17
decreased to 20% by 2005-06. If this trend continues, the output would be
expected to decrease further. This makes us think about the fact that the Indian
economy is mainly dependant on agriculture, but in the future it would contribute to
only 10-15% of the GDP. We need to look into the reasons for this worrying trend.
Agriculture is undoubtedly the most important sector from the point of view of
inclusion, since it is the primary source of income for about half the population
even today. (Table 3 and Figure 2) The slowing down of agriculture growth to less
than 2 percent per annum, since the late 1990s has undoubtedly been the root
cause of much of the rural distress. Naturally then, the per capita income of rural
population is far lower than that of its counterpart living in urban areas.

Table 3
Source of Income of Rural Population

Sources of income Proportion to Total Rural income

Agricultural 59
Agricultural wage 16
Business & Craft 9
Non-agricultural wage 7
Salaries 3
Current transfers 2
Others 4
Total 100
Source: Census of India, 2001

Figure 2
Sources of Income of Rural Population

Source: Census of India, 2001

18
 There are more poor in rural than in urban areas whether one looks at
poverty in terms of absolute number or in terms of percent of population below the
poverty line. A substantial number of urban poor have deep roots in rural areas.
When we look at the question of poverty in terms of access to work opportunities
and basic needs, the rural parts of India are in far worse situation. Self reliance
which made rural people meet their basic needs in most adverse circumstances
stands totally destroyed. Government, which professed and promised to uplift them
from the miserable living conditions, has failed to do much, if the records of the last
five decades are any indicator.

Land in its broadest sense is the most vital resource of rural India. Its
importance further increases in the context of rapid growth of population
particularly in rural areas. The first task of any meaningful rural development policy
is to ensure access to land for all those who were denied the same. Another major
task would be to diversify the rural economy to such an extent that dependence of
the people on agriculture declines. Agricultural census returns have consistently
shown iniquitous distribution of arable land in India. In 1971, the country had 71
million operational holdings which increased to 105 million in 1990-91. The
average size of holdings, however, declined from 2.28 ha in 1970-71 to 1.57 ha in
1990-91 indicating increasing pressure of population on land resources. When we
look at the size of distribution of holdings, we find that 69.9 percent of holdings
were small i.e. less than 2 ha in 1970-71. The proportion increased to 78.9
percent in 1990-91. The share of marginal holdings (less than one ha) also
increased from 51 percent to 59 percent. In 1970-71, almost 70 percent (69.90
percent) of the total operational holdings accounted for only 20.9 percent of the
area operated.

According to the NSS Report No. 492 on “Some Aspects of Operational

land Holdings in India, 2002-03,” released in 2006 there were 101.3 million
holdings operated during the kharif season of 2002-03 and 95.7 million holdings
operated during the rabi season of the same agricultural year. The average area
operated per holding in 2002-03 was 1.06 hectares compared to 1.34 hectares

19
during 1991-92 and 1.67 hectares in 1981-82. Marginal holdings (of size 1 hectare
or less) in 2002-03 constituted 70% of all operational holdings, small holdings (size
1 to 2 hectares) constituted 16%, semi-medium holdings (2 to 4 hectares) were
9%, medium holdings (4 to 10 hectares) were 4%, and large holdings (over 10
hectares) less than 1%. The share of marginal holdings in total operated area
climbed by 6-7 percentage points since 1991-92 to reach 22-23%, drawing level
with the shares of the semi-medium and medium holdings, which had the largest
shares in 1991-92. Tenant holdings, that is, holdings with partly or wholly leased-
in land, formed about 10% of operational holdings during 2002-03 compared to
11% in 1991-92. On an average, a tenant holding operated 0.7 hectares of
tenanted land in 2002-03. The share of leased-in land in total operated area, which
has been declining more or less steadily from 10.7% in 1960-61, was 6.5% for the
kharif season of 2002-03. Today land has become the most valuable asset for the
rural inhabitants due to lack of employment as a result there are serious protests
as a result of land acquisition.

The report of the global Hunger Index 2007 from International Food Policy
Research Institute (IFPRI) has ranked India 94th, well behind neighboring China
and Pakistan, in its overall list. Worse, while much is being made out of India being
a young country, the report said that 40 percent of the world’s underweight children
below five years live in India while more than half of all children with low birth
weight are born in South Asia. The report said that though India has improved its
score of 25.03 on the index compared to 33.73 in 1990, it is lagging behind China
and Pakistan ranked at 47 and 88 respectively, in the list of 118 countries. The
index is primarily based on a comparison of the undernourished out of the total
population of a country and prevalence of under weight children below five years.
“One in seven people go to bed hungry every day, which counts up to 854 million
people worldwide. Hunger is one of the world’s major problems and therefore one
of its most important challenges”, the report states.

Besides, India’s score on the progress indicator of the Global Hunger Index
is 0.496. It reduced hunger by 8.7 since 1990 whereas the reduction target was

20
17.6 for the period from 1990-2015. “In India where a large majority of the South
Asia’s population lives, economic growth in the agricultural sector has lagged
considerably behind the growth in other sectors in recent years. This has a
negative effect on the progress in alleviating poverty and hunger in rural areas,”
the report stated. Further, it added that members of the lower castes and certain
ethnic minorities continue to be discriminated against in the society and are
therefore in a disadvantageous position in regard to educational opportunities and
the labour market. The report published by the National Commission for
Enterprises in the Unorganized Sector (NCEUS) in August 2007 had come out with
similar findings. The NCEUS report had stated that “agricultural labourers are
among the most marginalized group among the rural poor, at the lowest rung of
poverty levels.”

On malnutrition in the South Asian Region, the IFPRI report said that “in
some parts of India, for instance, male and women make do with the leftovers. This
results in children of undernourished and anemic mothers too have a higher risk of
being born underweight”.

Rural Consumers
The rural consumer is generally seen as the less affluent, as compared to
his urban cousin but things are changing in rural India over the last ten years. Like
any market that has seen a demand and awareness boom, rural India has also
been witnessing considerable rise in purchasing power. A change in consumption
patterns and access to communication media have made rural market a vital cog in
the sales-growth wheel, especially with demand for many categories of products
and services plateau in the urban markets. In spite of increasing number of rural
consumers, provisions for consumer protection and welfare are often based on the
general standard and circumstances of those living in big cities and towns.
Although consumers as a whole are in an equal bargaining position, there are
certain recognizable groups which are disadvantaged in more ways than the
others. Disadvantaged consumers are those who are less able to assert their rights
and rural consumers comprise one such group. Rural consumers remain
disadvantaged as their right to information, choice, redress, and consumer

21
education are not sufficiently fulfilled. Consequently such consumers need support
in maintaining their rights so that they can bargain equally with the producers or
the service providers.

Marketing and Research Team, (MART) an organization involved for

decades in rural marketing research, has over the years built up a veritable trove of
research on rural consumers and their consumption patterns. Some of the findings
were presented by the President, MART at the Rural Marketing and
Communication Conference organized by the Federation of Indian Chamber of
Commerce and Industry (FICCI) at Delhi held in 2003. The following are the
findings of MART:

1. The rural consumer may not be very educated, but he is certainly astute,
with a lot of common sense and practical experience of handling the
vagaries and uncertainties of life. He displays great ingenuity and
adaptability as evidenced by his learning to repair his tractor, hand pump
and motorbike, and finding a host of local solutions in everyday life.

2. Though low on economic resources, he does not go in for only 'cheap’

products but looks for value for money. Perception of a premium product
is not yet relevant in rural markets, with consumers more concerned with
functionality than unnecessary ‘frills’ with a consumer durable. Too many
features with a product tend to confuse the rural consumer.

3. Rural consumers are generally mistrustful and wary of urbanities and

turned off by their patronizing attitudes. It is not easy for a rank outsider
to get the rural consumer to spend money.

4. Brand adherence is high among village consumers. This may not

necessarily be on account of loyalties. Limited access to alternatives and
lack of information about possible choices do make them 'stick' to tried
and tested brands.

22
5. Brand recognition is often on the basis of logos, symbols, colours rather
than the exact brand name. This tendency is partly responsible for the
widespread menace of spurious products in rural markets, as it is easy
to deceive the rural consumer with look-alikes.

6. A very high degree of involvement characterizes purchase of expensive

products like consumer durables. A lot of checking and counterchecking
is done to seek reassurance on the soundness of the buying decision.
Marketers must embody reassurance and provide opportunity to 'see
and touch' the product in their marketing communication processes.

7. Routine is important to a rural consumer's life as a lot of time consuming

activities characterize his everyday life. The routine is governed by
nature and seasons, not by the calendar or the clock. Sunday is not
typically a holiday. In buying processes, the consumer is not in a hurry
and cannot be pushed into a hasty purchase for these segments.

8. Rural incomes show a great seasonality for the segment of large

farmers. The segment of petty farmers, farm labour, non farm workers
and the salaried class show a greater regularity of income patterns so
the consumption cycles are also more regular and predictable.

9. On account of far higher degree of inter personal communication

characterizing village life and relatively low penetration of mass media,
word of mouth is a very effective medium of influence generation.
Existing users, dealers, village influential, youth studying or working in
urban locations are all consulted before making purchases.

10. Among the households with TV ownership, TV viewing is the highest

among women and children who in contrast to the traditional, household
head dominated decision scenario are fast emerging as demand
generators for the household goods. Decisions on durables like radio,
TV and two wheelers are still male dominated decisions, taken in
consultation with other people in the community.

23
 11. The rural youth are increasingly becoming more exposed to urban
lifestyles on account of their frequent visits to urban locations either for
higher education or for work. Their media exposure to television is also
much higher. This makes urban lifestyles an inspirational model for them
and their preference for national brands is on the rise.

12. While culture and social norms have a greater hold on rural consumer
than urban ones, perceptions, traditions and values vary from state to
state, sometimes from region to region. It is, therefore, difficult to work
with a pan rural Indian communication package. Two step flow of
communication, using opinion leaders and mass media both, seems to
work better in rural settings. These observations made on the basis of a
host of research based inputs make it very clear that rural marketing
effort cannot be visualized as a simple extension of the urban marketing
process. It is a different market and presents a different set of premises
on the basis of which suitable marketing.

Impact of globalisation
The impact of globalisation is being felt in rural India as much as in urban.
But it is slow. However, in the long run it will have its impact on target groups like
farmers, youth and women. In some states the affluent farmers, today 'keep in
touch' with the latest information and maximise both ends. Animal feed producers
no longer look at Andhra Pradesh or Karnataka. They keep their cell phones
constantly connected to global markets. Surely, price movements and products'
availability in the international market seem to drive their local business strategies.
On youth its impact is on knowledge and information and while on women it still
depends on the socio-economic aspect.

Rising Rural Prosperity

Rural consumers have acquired importance as India is now seeing a
dramatic shift towards prosperity in rural households. Rural India with its traditional
perceptions has grown over the years, not only in terms of income but also in
terms of thinking. The purchasing power in rural India is on steady rise and it has

24
resulted in the growth of the rural markets. The market has been growing at 3-4
percent per annum adding more than one million consumers every year. According
to a study by the National Council for Applied Economic Research (NCAER), there
are as many middle incomes and above households in the rural areas as are in the
urban areas. Moreover, there are almost twice as many lower middle income
households in the rural areas as in the urban areas. At the highest income level
there are 2.3 million urban households against 1.6 million households in rural
areas. As per the NCAER projections, the number of middle income and high
income households in rural India was expected to grow from 80 million to 111
million by 2007. In urban India, the same is expected to grow from 46 million to 59
million. Thus, the absolute size of rural India is expected to be double that of urban
India. The rural households constitute 72.6 percent with a population of 74.6
percent while 27.4 percent constitute the urban households with a population of
25.4 percent.
Table 4
Percentage Distribution of Households
Area Households Population

Rural 72.6 74.6

Urban 27.4 25.4

All-India 100 100

Source: Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Sector
by S. John Mano Raj & Dr. P Selvaraj

Table 5
Income-wise Distribution of Population

Income groups 2001-02 2006-07

Total Rural No. % Total Rural No. %

High 1.48 0.41 27.7 2.96 0.7 23.6

Middle 69.18 4.83 64.8 90.25 59.85 66.3
Low 32.29 29.52 91.42 20.41 95.8 95.7
Total 102.95 74.76 72.6 114.52 80.96 70.7

Source: NCAER cited in Social Changes and the growth of Indian Rural Market: An Invitation to FMCG Sector
by S. John Mano Raj & Dr. P Selvaraj

25
 Figure 3
Growth of Rural Population by Income Groups

Growth of Rural Population by Income Groups

120

95.7
91.42
100

72.6

70.7
80

66.3
64.8
2001-02
60
2006-07

40
27.7

23.6

20

0
High Middle Low Total
Income Groups

Figure 4
Growth in the Number of Rural Households

Growth in the number of rural households (% )

119
Highest 76

Upper-middle 185
35

Middle 75 2009-10 to 2015-16**

113 2004-05 to 2008-09

Lowe-middle 11-
12

Lowest 51-
32-

26
 Figure 5
Age wise Growth of Rural Population
(All Figure in Million)

300
239.10
233.3

250

200

156.60
141.9
1996

121.60
119.5

150
109.00
108.5

2001

104
90.20

85.70
90.7

82.1

100

73.3

70.6
62.30
26.40
31.1
50

60+
0-4

5 to 14

15 to 19

20 to 24

25 to 34

35 to 44

45 to 54

55 to 59
Age Group

Source: Registrar General of India

Gone are the days when the rural consumer went to the nearby city to buy
branded products and services. The rural consumer is growing and the global
players in the market are trying to grasp the market share –whether it is into
FMCGs sector or retail sector. Some FMCG products like toothpaste, hair oil and
other like shampoos have done much better in rural areas than in the urban and
the semi urban areas. The estimated annual business from rural markets is around
1, 23000 crores, comprising 65000 crores of FMCG ` 5000 crores of durables, `
45000 crores of agricultural inputs including tractors and ` 8000 crores of two
wheeler and four wheelers. Similarly the retail sector has a huge potential for
growth and the opportunities in retail sector is expected to touch $43 billion by the
year 2010.

27
Growth of Rural Markets
In recent years rural markets have acquired significance in countries like
India and China as the overall growth of the economy has resulted into substantial
increase in the purchasing power of the rural community. On account of
globalization and liberalization the rural areas are consuming a large quantity of
industrial and urban manufactured products. Rural market has witnessed a high
demand both for products and services. For several product categories, rural
markets account for well over 60 percent of the national demand. It is the rural
segment of the market that contributes more profit than its urban counterparts. The
general impression is that only agricultural inputs like seeds, fertilizers, pesticides,
cattle feeds and agricultural machinery have a potential for growth in the rural
market. However, there is a growing market for consumer goods now. It has been
estimated that the rural market is growing at the rate of five times its urban
counterpart (Tables 6, 7, 8, 9, 10, 11 and Figure 7)
Table 6
Comparison of Average Rural and Urban Monthly Per capita
Consumer Expenditure of Major States in 2007-08
`)
Average MPCE (`
State Rural Urban
Andhra Pradesh 816 1550
Assam 799 1452
Bihar 598 1080
Chhattisgarh 582 1503
Gujarat 875 1471
Haryana 1034 1628
Jharkhand 592 1395
Karnataka 819 1668
Kerala 1383 1948
Madhya Pradesh 634 1190
Maharashtra 868 1709
Orissa 559 1438
Punjab 1273 1633
Rajasthan 801 1265
Tamil Nadu 834 1410
Uttar Pradesh 680 1121
West Bengal 702 1452
All India 772 1472
Source: NSSO, Ministry of Statistics and Programme Implementation,
Govt. of India, 2007

28
 Table 7
Size of Rural Markets

States Market Size Rural population Market Size

(Crores) (Millions), 2001 per Capita
Census (`)
Gujarat 86,451 31,740,467 27,237
Tamilnadu 61,422 34,921,681 17,589
Madya Pradesh 51,102 44,380,878 11,514
Uttrakhand 14,796 6,310,275 23,447
Mizoram 773 447,567 17,271
Andhra Pradesh 130,611 55,401,067 23,576
Assam 36,880 23,216,288 15,885
Arunanchal Pradesh 1,831 870,087 21,044
Andman & Nicobar 623 239,954 25,963
Bihar 57,062 74,316,709 7,678
Chhttisgarh 33,859 16,648,056 20,338
Chandigarh 525 92,120 56,991
Delhi 4,944 944,727 52,333
Dadar & Nagar Haveli 349 170,027 20,526
Daman & Diu 545 100,856 54,037
Goa 4,292 677,091 63,389
Himachal Pradesh 18,404 5,482,319 33,570
Haryana 53,455 15,029,260 35,567
Jharkhand 37,721 20,952,088 18,003
Jammu & Kashmir 15,307 7,627,062 20,069
Kerala 60,327 23,574,449 25,590
Karnataka 70,044 34,889,033 20,076
Lakshadweep 349 170,027 20,526
Maharashtra 126,313 55,777,647 22,646
Manipur 3,845 1,590,820 24,170
Nagaland 4,078 1,647,249 24,756
Orissa 57,254 31,287,422 18,299
Punjab 39,867 16,096,488 24,768
Pondicherry 814 325,726 24,990
Rajasthan 62,082 42,292,813 14,340
Sikkim 1,278 480,981 26,571
Tripura 6,593 2,653,453 24,847
Uttar Pradesh 146,528 131,658,339 11,129
West Bengal 122,703 57,748,946 21,248
Source: Indicus analytics

29
 Table 8
Average Monthly Expenditure per person (`) at Current Prices
(in `)
Rural Urban

Non-food

Non-food
Total

Total
Food

Food
Years
27th round
(oct1972-sept 1973) 32.16 12.01 44.17 40.84 22.49 63.33
32th round
(July 1977 to June 1978) 44.33 24.56 68.89 57.67 38.48 96.15
38th round
(January 1983 to December 1983) 73.63 38.68 112.31 97.31 68.49 165.8
43rd round
(July 1987 - June 1988) 100.82 57.28 158.1 139.73 110.18 249.91
50th round
(July 1993 - June 1994) 177.8 103.6 281.4 250.3 207.7 458
55th round
(July1999 to June 2000) 288.8 197.36 486.16 410.84 444.08 854.92
61th round
(July 2004-June 2005) 307.6 251.19 558.79 447.14 604.95 1052.09
Source : Source: NSS Report No.508, Level and Pattern of Consumer expenditure, 2004-05
Figure 6

(a) (b)

Expenditure on Food Items Expenditure onNon-FoodItems

Rural Urban Rural Urban

1000
1000
900 604.95
900
800 800
444.08
Expenditure (Rs.)

700 700
Expenditure (Rs.)

447.14
410.84
600 600
500 500
400
250.3 400 207.7
251.19
300 307.6 300 197.36
110.18
139.73
288.8 200 68.49 103.6
200 38.48
97.31
100 22.49 57.28
40.84
100 57.67 177.8 12.01 24.56 38.68
32.16 44.33 100.82 0
0 73.63
27th round

32th round

38th roun d

50th roun d

55th roun d

61th roun d
43rd round
61th round
27th round

32th round

38th round

50th round

55th round
43rd round

30
 Table 9
Monthly Per capita Consumer expenditure (MPCE)
On Food & Non-food Item in Rural India (in %)
Items Expenditure as % of total consumer
Expenditure

1972-1973

1993-1994

1999-2000

2004-2005
1977-78

1987-88
1983
Expenditure on Food 72.9 64.3 65.6 64 63.2 59.4 55

Expenditure on Non-food 27.1 35.7 34.4 36 36.8 40.6 45

Source: NSS Report No.508, Level and Pattern of Consumer expenditure, 2004-05

Figure 7
Monthly Per Capita Consumer Expenditure (MPCE) of Rural India

Source: NSS Report, 2005-2008

The share of food versus non food expenditure in the economy is one of the
measures of the extent of consumption sophistication in an economy. The NSS
data reveals that the share of expenditure in 2004-05 on food in rural India is still
55 percent of the total expenditure, while non-food expenditure is 45 percent. The
growth of food related expenditure has been much lower than the growth of non-
food expenditure. The increase in expenditure on non food items is much more

31
than food items. The monthly per capita expenditure on food in 1999-2000 was
288.8 which has increased to 307.6. The increase in MPCE was of 18.8. On the
other side MPCE on non-food was 197.36 in 1999-2000 which has increased to
251.19. The increase in MPCE was of 53.83. The fastest growing non- food
expenditure categories are education, healthcare. Consumer durables are another
category that is growing fast. Rural consumers are now opting for life improving
products & services of real quality or durables that enhance productivity and
increase earnings.
Table 10
Average monthly expenditure per person on Durable Goods
(in `)
Years Rural Urban Total
27th round (oct1972-sept 1973) 0.95 1.4 2.35
32th round (July 1977 to June 1978) 4.82 8.55 13.37
38th round (January 1983 to December 1983) 2.6 4.55 7.15
43rd round (July 1987 - June 1988) 5.64 10.6 16.24
50th round (July 1993 - June 1994) 7.7 15.2 22.9
55th round (July1999 to June 2000) 12.76 30.85 43.61
61th round (July 2004-June 2005) 19.23 42.81 62.04
Source: Source: NSS Report No.508, Level and Pattern of Consumer expenditure, 2004-05
Figure 8

Expenditure on Durable Goods

70
42.81
60
Expenditure (Rs.)

50
30.85
40
Urban
30 Rural
15.2 19.23
20
10.6
8.55 12.76
10 1.4 7.7
4.55 5.64
4.82
0.95 2.6
0
61th round
27th round

32th round

38th round

50th round

55th round
43rd round

32
 Table 11
Expenditure on Different Categories
(in % )
Items Rural Urban
Beverages 2.59 3.09
Cereals/cereal products & Substitutes 11.56 5.68
Clothing 4.75 3.56
Consumer Services excl. Conveyance 6.48 10.57
Consumer taxes and Cesses 0.39 1.34
Conveyance 6.63 9.96
Durable Goods 3.79 3.68
Edible Oil 2.95 1.94
Education 1.92 3.29
Egg, Fish and Meat 2.16 1.55
Entertainment 1.11 3.11
Footwear 0.51 0.42
Fruit 1.12 1.19
Fuel and light 18.28 15.87
Medical (institutional) 2.23 1.14
Medical (non-institutional) 5.92 4.21
Milk and Milk products 5.52 4.51
Paan, tobacco and intoxicants 1.7 0.91
Personal care and effects 0.55 0.53
Pulses and pulses products 2.06 1.28
Rent 0.94 9.19
Salt and spices 1.35 0.8
Sugar 149 0.84
Sundry articles 4.77 3.89
Toilet articles 5.09 4.38
Vegetables 4.14 2.79
Source: Indicus analytics, 2008

Moreover, the rural market is getting an importance because of the

saturation of the urban market. Due to competition in the urban markets, the
market is so saturated as most of the capacity of the purchasers has been targeted
by the marketers. The marketers are now looking for extending their product
categories to an unexplored market i.e., the rural market. The rural market has
been growing steadily since 1980’s and is now bigger than the urban market for
both FMCGs and consumer durables. An analysis of the NSS data reveals that 75
percent of the expenditure on manufactured goods is accounted by rural India.

33
 Table 12
Where Rural Money Goes

Particulars Expenses (%)

Personal care 5.2
Groceries 34
Saving 3.1
Interest Payment 3.9
Jewellery 1.7
Agri Input 14
Household maintenance 2.5
Home textiles 0.5
Vehicles 5.2
Home appliance 0.3
Consumer Durables 1.6
Apparel & Footwear 8.1
Hard Liquor & Tobacco 2.3
Entertainment & Music 1.7
Fuel 6.4
Medicines & Healthcare 9.5
Source: KSA Technopak cited in Consumers and Consumer
Protection by S.S. Kaptan

Figure 9

34
 Table 13
Rural FMCG Market Projections

Category Growth % 2001-02 2006-Projected Rural

Total Rural Total Rural market
Share Share share %
Toilet soaps 13.4 9645 6021 18086 11291 62.4

Body Talcum 23.65 1445 793 4237 2292 54.1

Powder
Toothpaste 23.5 3198 1441 9376 4140 45.1

Cooking oil 10.91 20946 15731 35295 25806 73.4

Vanaspati 7.63 4549 2846 6648 4108 62.6

Source: NCAER cited in Social Changes and the growth of Indian Rural Market: An Invitation to
FMCG Secto by S. John Mano Raj & Dr. P Selvaraj

Figure 11

Source: NCAER cited in Social Changes and the growth of Indian Rural Market:
An Invitation to FMCG Secto by S. John Mano Raj & Dr. P Selvaraj

35
 Table 14
Indian FMCG market-Brand Penetration

Within category High Penetration Brand

Category (%) (Company)
Toilet soap 91 Life buoy(HLL)
Washing cakes/Bar 88 wheel (HLL)
Edible Oil 84 Double Iran Mustard
Tea 77 Liptom Taaza(HLL)
Washing poweder/Liquide 70 Nirma (Nirma)
Salt 64 Tata salt (Tata)
Biscuits 61 Parle G (Parle)
Skin cream 58 Fair & Lovely (HLL)
Talcum Poweder 65 Pond's (HLL)
Source: www.estratagicmarketing.com

Trends indicate that the rural markets are coming up in a big way and
growing twice as fast as the urban, witnessing a rise in sales of hitherto typical
urban kitchen gadgets such as refrigerators, mixer-grinders and pressure cookers.
According to one estimates the money available to spend on FMCGs (Fast Moving
Consumer Goods) products by urban India is ` 49,500 crores as against is
` 63,500 crores in rural India. The study on ownership of goods indicates the same
trend. It segments durables under three groups - (1) necessary products -
Transistors, wristwatch and bicycle, (2) Emerging products - B&W TV and cassette
recorder, (3) Lifystyle products - CTV and refrigerators. Marketers have to depend
on rural India for the first two categories for growth and size. Even in lifestyle
products, rural India will be significant over next five years. (Table 15)

Table 15
Ownership of Durables by Rural Consumer
Product No. of Owners per 100
Households
Bicycle 53
Fan (Ceiling) 19
Fan(table) 13
T.V (B&W) 16
Pressure Cooker 13
Wristwatch 76
Radio/Transistor 42
Source: NCAER Reports

36
 According to experts, the four factors which influence demand in rural India
are- access, attitude, awareness and affluence. Some companies have
successfully used this to influence the rural market for its shampoos in sachets.
The sachet strategy has proved so successful that, according to an ORG - MARG
data, 95 percent of total shampoo sales in rural India is by sachets. The company
had developed a direct access to markets through wholesale channel and created
awareness through media, demonstration and on ground contact. This changed
the attitude of the villagers. Today, the young and the educated in the villages are
already large in number and this number is increasing. Already, 40 percent of all
those graduating from colleges are rural youth. They are the decision makers and
are not very different in education, exposure, attitudes and aspirations from their
counterparts at least in smaller cities and town.

Myths about Rural Consumers

It is common for us to think of rural India as one aggregate mass of people
that behaves in the same way. The concept of homogeneity of rural consumer has
posed a serious problem in formulating appropriate strategies to protect the rural
consumers. Now this notion needs to be changed. Rural India should be
understood from different economic and socio-cultural segments that thrive in it.
Unlike the urban ones who are individualistic, rural consumers tend to make
decisions as a community. Communities of youth, women and professions are
important influences on particular buying decisions. The rural consumer is not
illiterate when it comes to his needs and buying decisions. He exhibits a strong
visual literacy and associates with brands through their “visual touch”.

Another myth is that the rural women do not play a role in decision-making.
However, empowerment of the women is also having its impact. Women in rural
India have come to enjoy increasing economic power and are a major influence in
the purchase of household articles particularly FMCG brands. They are perceived
as the custodian of the family’s health and hygiene. There is also a perception that
the rural consumer is only price- conscious, not quality conscious. But there is a
cost value perception in upper class rural consumers. Another myth is that they

37
aren’t loyal to brands. To them, logos and symbols represent a brand, which gives
rise to so many fakes. The biggest market for fakes is the rural market.

Exploitation of Rural Consumers

With the growth in rural markets and due to poor knowledge about their
rights and lack of skills to take a rational decision based on information about the
product or services, the rural consumers in India are being exploited in many ways.
The rural consumer has been made to endure sub-standard products and services,
adulterated foods, short weights and measures, spurious and hazardous drugs,
exorbitant prices, endemic shortages leading to black marketing and profiteering,
unfulfilled manufacturing guarantees and host of other ills. The rural consumers
who generally depend on weekly markets to purchase essential things are often
cheated due to lack of choice.

The rural consumers in India are generally ignorant and they are also
unorganized. Thus, they are exploited by the manufacturers, traders and the
service providers in different way. They are not only scattered but also diverse and
heterogeneous. As a result of globalization and liberalization the rural market in
India is the largest potential market in the world. Thus there are vast opportunities
for rural marketing. The manufactures and traders take advantage of the condition
of the rural consumers. It has been observed that the condition of the rural
consumers is deplorable because they are largely exploited in the rural markets on
account of lack of competition among the sellers. The rural consumers face various
problems like adulteration, short weighing and measuring, lack of safety and
quality control in appliances and equipments, electrical and mechanical, unfair
warranties and guarantees, imitation, sales gimmicks and unreasonable pricing.

Fake Brands and Spurious Products

One of the major problems being faced by the rural consumers is that of
fake brands and spurious products. The brand image of the successful FMCG
majors has been imitated by some of the small regional companies. These fake
brands have been sold mostly in rural areas. Fake products are of two types – one
counterfeit products and two pass - off products. Counterfeit products are fake

38
products that bear identical name of a product/packaging/graphics/colour scheme
and even same name and address as the genuine manufacturer. Some one
produces these to look exactly like real products other than the legal owner of the
real product, trademarks and product packaging. Sometimes it becomes difficult to
tell which the real product is. A rural consumer is brand loyal and understands
symbols better and this also becomes a problem as it is easy to misguide the rural
consumer. The FMCG industry alone has been facing loss of over ` 5,000 crore
per year, due to counterfeit products, of the ` 113,000-crore FMCG market in India.
Counterfeit products result in an annual loss of approximately ` 30,000 crore to the
industry and ` 15,000 crore to the Government exchequer. Pass- off products uses
similar sounding or is similar in spelling. They use similar type of packaging or
color or design. These are look-alike products that resemble the original products,
mainly through misspelling of the trademark. For example, Sunslik instead of
Sunsilk, Clemic Plus or Climic Plus or Cosmic Plus instead of Clinic Plus,
Collegiate for Colgate, Vips Rub or Vives Rub as a pass-off for Vicks Vaporub.
They come out with the motive to mislead and cheating ordinary consumers who
are uneducated or in a hurry in purchasing products.

A study conducted by AC Nelson, a leading research agency reveals that

FMCG industry loss is around ` 2500 crores annually to counterfeits and pass- off
products. It is also estimated that top brands in India are estimated to lose up to 30
percent of their business to fake products. Besides the loss of revenue, the trading
companies also face the loss of damage to brand image and brand loyalty to
consumers. Apart from the loss of revenue and brand image fake products cause
immense damage to consumer’s health. 10% of all major soft drinks sold are
spurious, while 10-30% of cosmetics, toiletries and packaged food are counterfeits.
Fake gold and precious metals are worth ` 60 billion in India.

Another interesting point is that FMCG counterfeit products only come in

smallest size of packing. In the rural segment where fake products thrive, the
consumer’s low purchasing power makes sachets and smaller packs popular. It is
in the case of these small packs that consumers are duped more easily as the

39
quantity is not large enough for the buyer to discern its quality. This is especially so
in sachets of shampoo, hair oils, and detergents and so on.

Misleading Advertisements and Role of Media

The media has a greater responsibility towards the vulnerable sections of
the society. The rural consumers are one such. Rural consumers today have
access to diverse media with the advent of modern technology. Advertising is the
major or even the main sources of information about many new products or newly
introduced products. The changes in advertising are in part a response to the rapid
growth in markets due to globalization. Due to the entry of a large number of
players in the rural market and also due to stiff competition there are large
numbers of misleading advertisements in the print and electronic media resulting
into exploitation of the consumers.

The advertising firms are studying consumer behaviors to design effective

communication strategies without caring for the welfare of the consumer. In most
parts of the rural areas in the country there is considerable awareness on various
latest products that are available in the market. This has been possible due to the
penetration of cable and satellite channels that have brought down the world at the
finger tips of the common man. The media has influenced the mindset of the rural
consumers to such an extent that people who have money start purchasing the
products unmindful of the costs, just to satisfy their needs as well as their ego.

The problem is that there are no effective sanctions against misleading

advertisements. What needs to be emphasized is that the poor, uneducated
consumers in the rural areas are most likely to be harmed. More generally, as a
recent World Development Report rightly emphasized, ‘information problems are
often at the core of the difficulties that poor people in developing countries
encounter in their daily struggle to survive and to improve their lives”.

The government and its various agencies need to counter the misleading
claims of the producers/ service providers. Jago Grahak Jago is an important
mean to communicate with the consumers. However, to communicate effectively

40
with the rural audiences, we need to move further. It is important to understand the
aspirations, fears and hopes of rural consumers. Although the reach of television in
rural India is high, frequent power cuts restrict viewing time considerably. However,
rural India has high ownership of transistor radios and these can be expected to
become a popular medium for reaching the rural masses. Moreover, we also need
to have an effective regulator for advertisements so that the consumers are not
misled by claims and counter-claims.

The Consumer Protection Act, 1986 gives a comprehensive definition of

unfair trade practice. The consumer courts have given some excellent orders in
this area, but they cannot deal with misleading advertisements like the MRTPC as
the consumer court neither has the power nor the infrastructure to investigate, suo
motu into misleading advertisements nor take up such cases on their own as was
done by the MRTPC. The ASCI also has not been an effective regulator. Now that
MRTPC has ceased to exist, we need to think of some mechanism to check
misleading advertisements.

Sum up

The NGOs have an important role to play in consumer education and

empowerment. However, the task is gigantic and therefore, it is time to involve the
PRIs to reach the rural consumers. The meetings of the Gram sabhas can be
utilized as a forum to educate the consumers about their rights and obligations and
enhance their knowledge about fake and spurious products. An integrated
approach is needed to empower the rural consumers. As the largest consumer
base is in the rural areas, protecting the rural consumer has to be a priority in any
strategy to protect the consumers.

41
References

1. S.John Mano Raj and P. Selvaraj; “Social Changes and the Growth of
Indian Rural Markets: An Invitation to FMCG”, International Marketing
Conference on Marketing and Society, April 8-10, 2007, IIM, Kozhikode

2. Sutirtho Patronobis,. “HT Nation, Monday”, October 15, 2007, New Delhi.

3. Sarangapani A, A Textbook on rural Consumer Behaviour in India- A Study

on FMCGs, University Press, 2009, New Delhi

4. Venkatesh Tamlurkar; “Assessing the Marketing for Rural India”,

www.indianmba.com/Faculty

5. Preeti Mehra; “Crusade against Counterfeit”, Business Line, Monday, July

02, 2001

6. Ambi M.G.Parameswaran; “The Great Indian Rural Consumer”, Business

Standard, Feb 15, 2008, New Delhi

7. D.K.Bose; “Marketing in Rural India”, Horizon07. Oct 7,2007, IIM Kozhikode

8. K.V.kannan; “Strategies for Chocolate Companies to Kill Fake Products in

Indian Rural Market”, www,indianmba.com/Faculty

9. Pushma Girimaji; Misleading Advertisements and Consumer, IIPA, New

Delhi, 2008

10. Kaptan S.S, Rural Consumer and Consumer Protection, Sarup & Sons
Publication, 2004 (pp 19, 83), New Delhi

11. Ambi M.G.Parameswaran; “The Great Indian Rural Consumer”, Business

Standard, Feb 15, 2008, New Delhi

42
 CHAPTER III
Level of Awareness among Rural Consumers

Economic liberalization along with the rise in rural prosperity has opened the
flood gates for rural markets. The rural market is growing fast and touching the
lives of millions of the rural consumers. The rising prosperity in the rural areas and
the impact of media penetration has opened up the rural market for the
multinational companies and other producers. A range of products and services
are available to the rural consumers. However, due to ignorance and lack of
information the rural consumer has to endure with sub-standard products and
services, adulterated foods, short weights and measures, spurious and hazardous
drugs, and exorbitant prices along with unfulfilled manufacturing guarantees and
host of other ills. In a market driven economy like ours, the aspirations of the
consumers including the rural consumers is on the rise due to a number of
reasons. Today the rural consumers are being lured by advertisements which do
not really educate the consumer nor provides information to them but only exploit
his ignorance and in the process we forget that the consumer is an important
component of society and every business has an obligation to him/her. The
marketers resort to all sorts of tactics to cheat the consumers especially when the
goods are short in supply in the market. High prices are charged by the producers
and consumers have no choice other than to purchase what is available.
Therefore, the consumer is to be protected from unsafe products, poor quality of
goods and services, high prices, unfair trade practices and misleading
advertisements. The best way to empower the consumers is to educate them and
enhance their awareness, therefore if the consumers are to be protected it is
necessary to educate the consumers and make them aware about the various
mechanisms available to them so that they are able to make a rational decision
while making a purchase.

The welfare of the consumers lies in the fulfilment of their normal and
legitimate expectation with regards to the goods they purchases and the services
they avail. In a country like India where all the consumer protection laws are in

43
place, the consumers are not really aware of them and the mechanism in place to
redress their grievances. Those who know the laws know that the process is very
slow and has become cumbersome. There are a number of steps taken to protect
the rural consumer but without much impact due to the prevailing socio economic
conditions of the rural consumers. They generally base their purchasing decisions
on the advertisement campaigns and promotional strategies employed by the
organizations and also lack of choice.

Consumers are exploited when they are cheated in any form or when not
informed adequately about the product. Consumer exploitation is in many ways.
They may be exploited by giving incomplete or wrong information. They may be
exploited by sellers who may weigh less or measure wrongly. Sometimes, a
consumer may be given low quality of goods. One of the very common and a
serious problem by which a consumer may be exploited and cheated by the shop-
keeper is by providing impure or adulterated goods with harmful substances. Food
adulteration is a serious problem in the rural markets where the administrative
machinery is not able to tackle this menace. As far as the service sector is
concerned a large number of complaints regarding medical services, banking,
insurance and electricity go unreported as the consumer is unaware of the
redressal mechanism. Cases of medical negligence are common in the rural areas
but then the consumer has no choice.

Consumers not only pay their hard earned money, but also have to undergo
the trauma of suffering from ill health and in some cases even risking their lives
due to spurious products. It is quite common that the rural consumers are unaware
about maximum retail price, expiry and manufacturing date and other information
that is to be provided on the products due to ignorance and illiteracy. The
consumers are at risk with such market practices. Sometimes the producers may
deliberately conceal information and circumstances in which the product must be
used or the accompanying devices to be used with the product or circumstances
during which a product would not work. In such situations the consumers feel
helpless and trapped.

44
 There are many factors leading the consumer exploitation in rural areas.
Illiteracy and ignorance is just one of the many causes of exploitation. Illiterate
consumers can easily be cheated as they can neither read the name of the product
nor the instructions. Illiteracy also affects the level of consumer awareness. Lack of
information is another cause as the seller may take advantage of the freedom of
the market and keep away, the important or correct information from the consumer.
Price, composition, quantity, conditions of use, and terms of purchase all must be
given to the consumer. Monopoly is also a cause of consumer exploitation as the
consumers are forced to purchase the product or avail the services. In markets
where only one or few producers or sellers operate, the consumer is more
vulnerable. This is all the more so in case of essential commodities like life saving
drugs and food items without which the consumers cannot do. The consumers in
such areas are charged with high price; given a low quality and their problems and
complaints are not taken seriously. An economy, in which consumers are aware
and exercise their rights and obligations freely, will not only help the business but
also enable the economy and the society to flourish. An overall picture emerges
that it is due to lack of consumer education and awareness that consumers
continue to be exploited. We need to device new strategies to protect the rural
consumer

The study attempts to find out the level of awareness among the rural
consumers on various initiatives prevailing in the markets and also explore the
ignorance of the consumers relating to their basic rights and obligations. It also
examines the buying behaviour and the market practices of the rural consumers.

Socio-economic Profile of the Respondents

Sex, Educational Status and Age Profile

The socio- economic profiles of the respondents covered are from various
strata of the society so as to make it a representative sample. Males constituted
68.6 of the sample size whereas 31.5 percent were females. As far as the
educational level of the respondents is concerned, 23.1 percent had no schooling,
17.9 percent of them had attended school up to the primary level, 26 percent had

45
 middle schooling, 16.3 percent had studied up to high school, 10.3 percent had
schooling up to intermediate level and 6.6 percent were Graduates. Post graduates
and Professionals consisted of 1 percent of the respondents. As far as the age is
concerned, only 1.6 percent of the respondents were below 20 years of age. 23.7
percent belonged to the age group between 20 -30 years, 38.5 were from the age
group of 30-40 years, 22.6 percent were within 40-50 years of age and 13.7
percent of the respondents were above 50 years of age. (Table 1)

Table 1
Sex, Education Status and Age Profile of the Respondents
States Sex Educational Status Age

PG/Profession
No Schooling

Intermediate
High School

Graduation

Above 50
Below 20
Primary
Female

Middle

20-30

30-40

40-50
Male

al
Uttarakhand 64.8 35.3 19.3 12.5 23.5 15.0 18.3 9.8 1.8 2.5 22.0 29.5 24.0 22.0
M.P 72.8 27.3 28.8 19.5 24.5 14.3 7.0 5.0 1.0 1.3 28.8 35.8 21.0 13.3
Gujarat 79.5 20.5 14.8 20.8 29.8 17.0 12.0 5.0 0.8 0.3 22.8 49.0 21.3 6.8
Meghalaya 72.3 27.8 17.8 25.3 29.5 16.8 8.8 1.8 0.3 1.3 19.3 49.5 22.5 7.5
Tamilnadu 53.5 46.5 34.8 11.3 22.8 18.3 5.3 6.8 1.0 2.8 25.8 28.5 24.3 18.8
Total 68.6 31.5 23.1 17.9 26.0 16.3 10.3 5.7 1.0 1.6 23.7 38.5 22.6 13.7
Source: Field survey

Figure 1
Sex, Education Status and Age Profile of the Respondents (total sample)

46
 Occupational Structure of the Respondents
As far as their occupational status is concerned, owner/cultivators
constituted 9.9 percent of the respondents while marginal farmers constituted 16.2
percent. The major segment of the respondents, which is 25 percent consisted of
labourers. Among the respondents, self employed constituted 12.9 percent,
unemployed 13.8 percent and housewives 13.8 percent.
Table 2
Occupation of the Respondents
(in %)
Occupation Uttarakhand M.P Gujarat Meghalaya Tamilnadu Total
Owner/Cultivator 17.0 14.8 6.8 5.5 5.3 9.9
Marginal Farmers 11.8 25.3 20.8 13.8 9.5 16.2
Labour 15.0 25.5 16.5 27.5 40.5 25.0
Tenant/Share croppers 0.8 0.5 4.8 0.3 0.8 1.4
Traders/Shopkeeper 1.5 1.5 7.5 11.0 2.8 4.9
Self Employed 10.5 7.5 16.8 19.3 10.3 12.9
Government Employee 13.8 3.0 5.3 1.8 3.8 5.5
Teacher 2.3 2.3 0.5 1.3 3.0 1.9
Crafts man 0.5 1.0 2.3 4.3 0.0 1.6
Unemployed 8.5 1.8 1.5 4.3 5.5 4.3
Housewife 17.5 14.5 13.0 10.8 13.3 13.8
Others 1.0 2.5 4.5 0.5 5.5 2.8
Source: Field survey

Figure 2
Respondents’ Occupation (total)

47
 Annual Income of the Respondents
The purchasing power of an individual depends upon his income. In the era
of globalization and liberalization the market is very tempting therefore it is
important to know the annual income of the respondents. The survey revealed that
majority of the respondents (44.4) percent had an annual income of less than `
24,000. The group with annual income between ` 24, 000 - 60,000 consisted of
40.1 percent. 11.4 percent of the respondents had income between 60,000 –
1,20,000. Those whose income was above ` 1, 20, 000 constituted 4.15 percent of
the sample size. (Table 3)
Table 3
Annual Income of the Respondent
(in %)
Sates Below ` 24,000/ to ` 60,000/- to Above
` 24,000 60,000 1,20,000/- ` 1,20,000
Uttarakhand 47.5 30.5 12.0 10.0
M.P 54.4 35.3 8.8 1.5
Gujarat 28.5 46.0 21.2 4.3
Meghalaya 16.0 73.5 9.0 1.5
Tamilnadu 75.5 15.0 6.0 3.5
Total 44.4 40.1 11.4 4.2
Source: Field survey

Monthly Expenditure of the Respondents

As far as the monthly expenditure of the respondents is concerned, 43.5
percent spent below ` 2,000, 45 percent spent between ` 2,000 to 5,000, 8.45
percent of the respondents’ expenditure was between ` 5,000 to 10,000. Those
whose expenditure was above ` 10,000 constituted 2.6 percent of the sample size.
Table 4
Monthly Expenditure of the Respondents
(in %)
States Below ` 2000 to ` 5,000 to Above
` 2000 5,000 10,000 ` 10,000
Uttarakhand 48.3 30.3 16.3 5.3
M.P 53.0 40.5 5.0 1.5
Gujarat 28.3 56.5 11.8 3.5
Meghalaya 16.3 80.8 1.8 1.3
Tamilnadu 71.8 19.3 7.5 1.5
Total 43.5 45.5 8.5 2.6
Source: Field survey

48
 Figure 3
Income & Expenditure wise Distribution of Respondents (total)

Monthly Expenditure (%) Annual Income (%)

Purchase of Daily Goods

The rural consumers have little option while purchasing goods of daily use.
The relationship between the rural consumer and the shopkeeper is of a different
nature as they live in the same village. It’s more of a loyalty and trust and if a
product is not good the shopkeeper generally tends to change it and there is no
dispute between the two. The rural consumer prefers to purchase his daily needs
from the same shop even if the items purchased are not good, but the shopkeeper
agrees to change it or refund the amount. It is also a fact that many rural
consumers particularly the poor purchase on credit. Therefore they stick to one
shopkeeper who gives goods on credit. Even though they are not satisfied with the
products they purchase from him, they have no alternative as they have no choice.
The consumer does not like to file a complaint or take up the matter with
appropriate authorities, as the shopkeepers generally redress their grievances.
Moreover, the rural consumer thinks that it is a waste of time and money to fight
with the shopkeepers. Table 5 indicates the place of purchase of goods of daily
use by the respondents according to the level of income.

49
 Table 5
Purchase of Daily Goods as per Monthly Expenditure

States Monthly Expenditure

Below ` 2000 to ` 5,000 to Above ` 10,000
Place ` 2000 5,000 10,000
Village Shop 3.1 0.8 1.5 4.8
Uttaranchal

Weekly market/Local Haat 68.4 38.8 27.7 28.6

Nearby kasba/town 17.6 39.7 29.2 33.3
City 10.9 20.7 41.5 33.3
Village Shop 11.8 1.9 15.0 0.0
Weekly market/Local Haat 62.7 42.6 0.0 0.0
Nearby kasba/town 24.5 45.7 45.0 16.7
M.P

City 0.9 9.9 40.0 83.3

Village Shop 50.4 9.7 8.5 0.0
Gujarat

Weekly market/Local Haat 23.9 18.1 31.9 7.1

Nearby kasba/town 23.0 62.8 48.9 28.6
City 2.7 9.3 10.6 64.3
Village Shop 6.2 4.0 14.3 0.0
Meghalaya

Weekly market/Local Haat 63.1 38.4 28.6 20.0

Nearby kasba/town 29.2 53.6 14.3 40.0
City 1.5 4.0 42.9 40.0
Village Shop 66.6 31.2 23.3 0.0
Tamilnadu

Weekly market/Local Haat 7.3 1.3 0.0 0.0

Nearby kasba/town 12.9 23.4 16.7 33.3
City 13.2 44.2 60.0 66.7
Village Shop 32.53 6.93 9.47 1.92
Weekly market/Local Haat 40.69 31.02 20.71 15.38
Total

Near by kasba/town 19.31 50.06 33.73 30.77

City 7.47 11.99 36.09 51.92
Source: Field survey

50
 Figure 4
Place of Purchasing Daily Goods as per Monthly Expenditure

Source: Field Survey

It is clear that there is a mixed response as far as purchase of daily Goods

is concerned. However a major chunk of the respondents (34.8 percent) preferred
nearby town for shopping and equal number (34 percent) preferred weekly market
or local haat for their daily needs (Table 6).

Table 6
Place of Purchasing Daily Goods

(In %)
States Village Weekly Nearby City
Shop market/Local Kasba/town
Haat
Uttarakhand 2.3 50.8 27.0 20.0
M.P 7.8 50.5 34.0 7.8
Gujarat 20.8 21.0 48.8 9.5
Meghalaya 4.5 42.0 48.8 4.8
Tamilnadu 55.5 5.5 15.5 23.5
Total 18.15 34.0 34.8 13.1
Source: Field survey

51
 Figure 5
Place of Purchasing Daily Goods

Source: Field survey

Table 6 further indicates that in Uttarakhand most of the respondents (50.8

percent) prefer to purchase goods of daily use from the weekly market or the local
haats, 27 percent purchase them from the nearby kasba or the towns while 20
percent buy goods of daily use from the city. In Madhya Pradesh also the trend is
similar as most of them purchase goods of daily use from the weekly market or the
local haat (50.5 percent). 34 percent purchase goods from the nearby kasba or the
local town and very few of them (7.8 percent) purchase goods of daily use from the
citiy. On the other hand in Gujarat nearly 21 percent of the respondents purchase
their items of daily use from the village shops and almost the same percent of the
respondents purchase their goods from the weekly market or the local haat. 48.8
percent purchase goods of daily use from the nearby kasba or the town and
dependence on the city for daily needs is very limited. In Maghalaya on the other
hand 42 percent of the respondents purchase their items of daily use from the
weekly market or the local haat and 48.8 percent depend on the nearby kasba or
the town for their daily needs.

52
 The survey revealed an interesting pattern as far as Tamil Nadu is
concerned. The village shops seem to be better organized as 55.5 percent of the
respondents prefer to purchase their daily needs from the village shop itself and do
not depend on the weekly market or the local haat to a large extent. 15.5. percent
depend on the nearby kasba/ town and 23.5 percent purchase items of daily need
from the city. According to the Table 6, only 18.15 percent of the total respondents
purchase their goods of daily use from the village shop, 34 percent from the weekly
market or the local haat, 34.8 percent from the nearby towns and only 13.1 percent
of them purchase from the city.

Consumer Satisfaction: Goods and Services

With the rise in the purchasing power due to the growing prosperity in the
rural areas of the country, the rural consumer has come to purchase a variety of
goods and also avail a number of services. The service sector like banking,
insurance, electricity, postal, healthcare are growing and the strategy of the service
providers is to reach the rural population. As far as FMCG goods are concerned,
according to estimates the rural market is worth ` 65000 crores and multinationals
are making strategies to tap this market to target the rural consumers. Products
like shampoo, soaps, cosmetics and other packed commodities of daily use are
now available in the rural markets. Many of these products are look alikes and
spurious and do not conform to the quality standards.

53
 Figure 6
Consumers’ Satisfaction: Goods & Services
(Total percentage of five states)

No Response
Not at All
Some Extent
Fully Satisfied

Agricultur
FMCG Health Banking & Water/Ele
Education Insurance Postal Telephone e Fertilizers Seeds Pesticides
products Services Finance ctricity
Machineri

No Response 1.9 1.7 5.2 68.4 42.8 21.2 25.3 39.5 76.1 63.8 63.7 61.8
Not at All 57.1 51.6 51.3 14.7 24.2 31.7 31.4 29.2 10.0 14.2 16.2 17.1
Some Extent 27.4 28.2 25.3 10.0 17.6 14.2 21.7 18.6 11.5 18.5 17.6 19.2
Fully Satisfied 13.6 18.5 18.2 6.8 15.3 33.0 21.6 12.7 2.4 3.4 2.6 2.0

Source: Field survey

As far as the FMCG products are concerned 13.6 percent of the

respondents are fully satisfied with the quality of goods and 27.4 percent are
satisfied only to some extent. A large percentage of 57.1 percent are not at all
satisfied. In the service sector 18.5 percent of the respondents are fully satisfied
with the health services while 51.6 percent are not satisfied at all. Similar is the
case with education services. Very few had insurance cover therefore no response
is very high. However satisfaction level with water/electricity, postal services is not
very encouraging. An overall assessment reveals that there is more of
dissatisfaction with the consumer goods and services in the rural areas.

In Uttarakhand as far as satisfaction with the FMCG products is concerned,

only 4.3 percent were fully satisfied whereas 88 percent were satisfied only to
some extent. As far as the services are concerned, 87 percent of the respondents
were satisfied to some extent with health services, 77 percent with educational
services, 24 percent with insurance, 26.8 percent with banking, 33.5 percent with
electricity, 29.8 percent with postal and 27.5 percent with telephone services
respectively (See table 7).

54
 The satisfaction level was not much different in the state of Madhya
Pradesh. 73 percent of the respondents were satisfied with FMCG products only
to some extent. With health services 73.8 percent, education 65.3 percent,
insurance 10.3 percent, banking 23.3 percent. The response has been low as
many of them do not avail these services. A Large percent of the respondents
(52.8 percent) were not satisfied with the services relating to electricity. The other
variations relate to fertilizes, seeds and pesticides where most of the respondents
were satisfied to some extent. It is interesting to note that in Gujarat satisfaction
level with the services was much higher. 37 percent of the respondents were fully
satisfied with the FMCG products while 59 percent were satisfied to some extent.

Agriculture is the main occupation in rural India. Most of the rural people
own land and do cultivation. Therefore, it is pertinent to know about the quality of
the agriculture services being availed by the rural people. On questions relating to
these services, only a few of them responded as most of them were unaware of
the quality and other related issues. 12.8 percent were not satisfied with the
services relating to the agricultural machinery. As far as fertilizers were concerned
only 24.8 percent were satisfied to some extent. Similar was in the case of seeds
(24.5 percent) and pesticides (29 percent) respectively.

As far as the service sector is concerned, 35.5 percent were fully satisfied
while 64 percent were satisfied to some extent with the health services. Similar is
the case with education services where 35.5 percentage were fully satisfied and
53.5 percent were satisfied to some extent. The satisfaction level was higher with
banking services. In Gujarat the satisfaction level with electricity was quite high
where 58.3 percent were fully satisfied and 33.8 percent were satisfied to some
extent. Even in the case of postal service and telephone the satisfaction level was
higher. However, as far as agriculture related services were concerned the
response has been less. 29 percent were satisfied to some extent as far as
fertilizer was concerned, 23 percent with seeds and 26.8 with pesticides
respectively.

55
 In case of Meghalaya, 21 percent of the respondents were fully satisfied
with the FMCG products while 73.8 percent were satisfied to some extent. As far
as health services were concerned, 20.3 percent were fully satisfied and 65.5
percent were satisfied to some extent. Similar was the case with education, where
21.3 percent were fully satisfied and 69.8 percent were satisfied to some extent.
However, in the case of insurance 21 percent of the respondents were not at all
satisfied while only 11 percent of the respondents were satisfied to some extent.
61.5 percent of the respondents were satisfied to some extent with banking
services. In Electricity 56.5 percent, postal 61.3 percent and telephone services 42
percent of the respondents were satisfied to some extent. The response has been
less as far as services relating to agriculture and allied services were concerned.

As far as Tamil Nadu is concerned, 40.7 percent of the respondents were

fully satisfied with the FMCG products, while 50 percent were satisfied to some
extent. As far as services were concerned, 32.8 percent were fully satisfied with
the health services, 38.5 with education, 20 percent with insurance, 18.3 percent
with banking, 57.8 percent with electricity and 76.8 percent with postal services
respectively. On the other hand the dissatisfaction level is very prominent. 35.3
percent of the respondents were not satisfied with insurance, 35.3 with banking
and 23.8 percent with health services respectively. The level of satisfaction was
higher as far as agriculture and allied services were concerned when compared
with other states selected for the study. 16.3 percent were fully satisfied with the
fertilizers and 18 percent with the seeds supplied (Table 7).

The study also revealed that in the five states under study, except Tamil
Nadu and Gujarat more people are less satisfied with the services provided as
mentioned in the table. During the discussions in the field it was also found that not
many of the rural people knew about what constitutes a deficiency of service. Even
if they have to go to a bank a number of times to avail a service they did not mind it
and were not unhappy with the situation as a city dweller would be. Perhaps in the
rural areas the concept of time was not so important.

56
 Table 7: Consumers’ Satisfaction: Goods & Services
(in %)

Uttarakhand
Fully Satisfied M.P Gujarat Meghalaya Tamilnadu

Fully Satisfied

Fully Satisfied

Fully Satisfied

Fully Satisfied
No Response

No Response

No Response

No Response

No Response
Some Extent

Some Extent

Some Extent

Some Extent

Some Extent
Not at All

Not at All

Not at All

Not at All

Not at All
Goods & Services

FMCG Products 4.3 88.0 5.0 2.8 11.5 73.0 11.5 4.0 37.0 59.0 4.0 0.0 21.0 73.8 2.5 2.8 40.3 50.0 7.5 2.3
Health Services 6.8 87.0 3.0 3.3 16.8 73.8 5.0 4.5 35.5 64.0 0.5 0.0 20.3 65.5 13.5 0.8 32.8 43.3 23.8 0.3
Education 7.0 77.0 1.5 14.5 18.8 65.3 6.3 9.8 33.5 53.5 12.8 0.3 21.3 69.8 8.3 0.8 38.5 38.8 22.3 0.5
Insurance 1.8 24.0 0.0 74.3 7.0 10.3 9.0 73.8 12.3 13.5 10.0 64.3 21.0 11.0 0.0 68.0 20.0 38.0 35.3 6.8
Banking Services 4.3 26.8 0.5 68.5 12.3 23.3 0.8 63.8 38.0 35.3 0.3 26.5 6.5 61.5 2.8 29.3 18.3 40.5 35.3 6.0
Electricity 1.5 33.5 10.0 55.0 52.8 4.8 6.5 36.0 58.3 33.8 5.5 2.5 16.8 56.5 17.0 9.8 57.8 29.3 12.0 1.0
Postal 13.5 29.8 1.3 55.5 18.0 32.5 3.8 45.8 40.8 54.3 1.0 4.0 17.5 61.3 3.8 17.5 67.8 22.8 8.5 1.0
Telephone 0.8 27.5 4.3 67.5 7.0 19.5 12.8 60.8 32.5 47.5 3.0 17.0 13.5 42.0 9.3 35.3 60.3 20.3 16.3 3.3
Agro-Machineries 0.3 12.8 0.0 87.0 0.5 24.3 0.3 75.0 6.0 18.0 0.0 76.0 2.0 11.0 0.8 86.3 13.3 23.3 9.8 53.8
Fertilizers 1.0 24.8 0.5 73.8 2.0 38.3 5.0 54.8 7.5 29.0 1.3 62.3 2.0 12.0 0.0 86.0 16.3 16.8 11.8 55.3
Seeds 1.3 24.5 3.0 71.3 2.0 38.5 4.0 55.5 5.3 23.5 7.8 63.5 2.0 11.5 2.0 84.5 18.0 16.8 9.5 55.8
Pesticides 1.0 29.0 3.5 66.5 2.8 34.0 11.5 51.8 4.5 26.8 6.3 62.5 0.0 14.5 0.0 85.5 9.3 22.3 12.3 56.3

57
Inquiry into Terms and Conditions before making Transaction

One of the major problems relates to consumer education and

awareness. Consumers generally do not seek information about the product
they intend to buy or avail a service. Having full information about the product or
service helps a consumer to take a rational decision and make a choice. It in
fact protects them as there are a number of terms and conditions which are
unfair. In Uttarakhand 40.8 percent of the respondents did not bother to find out
the terms and conditions before making the transaction. It is 56 percent in
Madhya Pradesh, 57 percent in Gujarat, 84.3 percent in Meghalaya and 52
percent in Tamil Nadu respectively (Table 8).

Table 8
Inquire about Terms & Conditions before Purchasing
Products or Availing Services
(in%)
States Yes Sometimes No
Uttarakhand 27.8 31.5 40.8
Madhya Pradesh 18.0 26.0 56.0
Gujarat 21.5 21.5 57.0
Meghalaya 4.0 11.8 84.3
Tamilnadu 23.5 24.5 52.0
Total 19.0 23.1 58.0
Source: Field survey

Figure 7
Inquire about Terms & Condition (total)

Source: Field survey

58
 More than half of the respondents (58 percent) did not make any inquiry
into the terms and conditions before purchasing goods or availing services, 23.1
percent inquired about it sometimes and only 19.0 percent inquired frequently
(Table 8). In Uttarakhand only 27.8 percent and Gujarat 21.5 percent of the
respondents actually inquired about the terms and conditions, while it was 18
percent in Madhya Pradesh. In Meghalaya just 4 percent inquired about the
terms and conditions before making a transaction while 84.3 percent did not
bother to know about the terms and conditions. 31.5 percent of respondents in
Uttarakhand, 26 percent in Madhya Pradesh, 21 percent in Gujarat, 11.8
percent in Meghalaya and 24.5 percent of the respondents in Tamil Nadu
inquired about the terms and conditions before making a purchase. The
dependence on the local shop keeper or the representatives of the service
provider is very high as most of them belong to the same area and know each
other. It has more to do with faith and trust. The other factor relates to
ignorance about various consumer rights and lack of literacy. As far as the
relationship with the level of education is concerned, the study indicates that
people who have attained some education are more aware about what they
intend to purchase and inquire about the terms and conditions before making a
purchase. According to the Table 9, only 7.7 percent of the respondents who
have not attended school inquired into the terms and conditions before
purchasing a product or availing a service. On the other hand 63.3 percent of
the graduate respondents sought information before purchasing goods or
availing a service.

59
 Table 9
Inquire about Terms & Condition of Transaction before Purchasing Products or
Availing Services (Impact of Education Level)
(In %)
States

Intermediate
High School

PG/Professi
Graduation
Response

Schooling

Primary

Middle

Total
onal
No
Yes 3.9 2.0 30.9 35.0 45.2 52.2 57.1 27.8
Uttarakhand Sometimes 22.1 30.0 33.0 33.3 30.1 45.7 14.3 31.5
No 74.0 68.0 36.2 31.7 24.7 2.2 28.6 40.8
Yes 1.7 2.6 22.4 36.8 28.6 70.8 75.0 18.0
M.P Sometimes 14.8 28.2 36.7 21.1 39.3 25.0 25.0 26.0
No 83.5 69.2 40.8 42.1 32.1 4.2 0.0 56.0
Yes 1.7 1.2 23.5 36.8 31.3 69.6 66.7 21.5
Gujarat Sometimes 15.3 16.9 29.4 20.6 20.8 17.4 0.0 21.5
No 83.1 81.9 47.1 42.6 47.9 13.0 33.3 57.0
Yes 0.0 0.0 1.7 4.5 17.1 62.5 100.0 4.0
Meghalaya Sometimes 2.8 3.0 17.8 22.4 8.6 37.5 0.0 11.8
No 97.2 97.0 80.5 73.1 74.3 0.0 0.0 84.3
Yes 11.5 11.1 28.6 23.3 52.4 61.3 50.0 23.5
Sometimes 25.9 31.1 29.7 19.2 9.5 16.1 25.0 24.5
Tamilnadu No 62.6 57.8 41.8 57.5 38.1 22.6 25.0 52.0
Yes 4.8 2.5 20.6 26.8 35.6 61.4 63.2 19.0
Total Sometimes 17.6 19.0 28.8 23.1 23.4 29.5 15.8 23.1
No 77.7 78.4 50.6 50.2 41.0 9.1 21.1 58.0
Source: Field survey

Insistence on Cash Memo

When a purchase is made or a service availed it is important for the
consumer to take a proper cash memo or a receipt as a proof of the transaction
made and also for future need. The cash memo is an important document if one
has to file a complaint. It is obligatory on the part of the consumer to take a
proper cash memo and it is also the duty of the shopkeeper or the service
provider to give a cash memo. Moreover, not taking a cash memo amounts to a
loss to the public exchequer in terms of taxes. However, in general it has been
observed that unless the cost of transaction is very high the consumer does not
bother to take a cash memo and this situation is more prevalent in the rural
areas.

Among the sample respondents only 11.8 percent in Uttarakhand, 11.3

percent in Madhya Pradesh, 16.3 percent in Gujarat, 3.3 percent in Meghalaya

60
and 18.8 percent in Tamil Nadu actually insisted on taking a cash memo (Table
10). The percentage of consumers who insist on the cash memo sometimes is
not much different than those who insist on the cash memo. The percent age of
consumers who do not insist on cash memo is quite high in all the states. It is
73.8 percent in Uttarakhand, 78.8 percent in Madhya Pradesh, 65.8 percent in
Gujarat, 88 percent in Meghalaya and 60 percent in Tamil Nadu respectively.
On the other hand 14.5 percent in Uttarakhand, 10.0 percent in Madhya
Pradesh, 18 percent in Gujarat, 8.8 percent in Meghalaya and 21.3 percent in
Tamil Nadu insisted on the cash memo sometimes. Thus among the total
sample respondents only 17.8 percent of the respondents always insisted on
taking a cash memo, 31.5 percent sometimes and more than half (50.8 percent)
never asked for cash memo. (Figure 8)
Table 10
Insistence on Cash Memo while Purchasing Durables
(in %)
States Yes Sometimes No
Uttarakhand 11.8 14.5 73.8
Madhya Pradesh 11.3 10.0 78.8
Gujarat 16.3 18.0 65.8
Meghalaya 3.3 8.8 88.0
Tamilnadu 18.8 21.3 60.0
Total 17.8 31.5 50.8
Source: Field survey

Figure 8

Insistance on Cash Memo Yes Sometimes No

73.8

65.8
78.8

88.0

50.8
60.0

40.0

35.0
31.5

30.0

25.0
21.3

17.8
18.8
18.0

20.0
16.3
14.5

15.0
11.8

11.3
10.0

8.8

10.0
3.3

5.0

0.0
Uttaranchal MP Gujarat Meghalaya Tamilnadu Total
States

61
Information about the Product at the Time of Purchase
In the rural areas a large number of products which are sold are of
inferior quality. The shop keepers generally tend to cheat the consumers in
terms of price and contents of the products. The government has made it
mandatory for the producers to give information about the contents of the
product on the label as well as indicate the MRP of the product. It is also
mandatory to mention the date of manufacture and the date of expiry on packed
items. During the survey it was found that not many of the rural consumers
bothered to know about the contents, the expiry date and other relevant
information. However, they were conscious about the price of the product and
most of them sought information about it.

The analysis shows that 32.8 percent of the respondents always

checked the available choices of a product at the time of making a purchase
while 42.2 percent did not do that. As regards the information about the
contents which relates to nutritional value and other details only 5.3 percent
bothered to know about it while a large section (83.7 percent) of the consumers
did not think it important to seek information about the nutritional value of the
product. Interestingly the consumers were not quality conscious but certainly
most of them were price conscious. 87.4 percent of the respondents said they
did enquire about the price of the product. Across states this trend is visible. In
Uttarakhand more than 98 percent of the respondents enquired about the price
while the corresponding numbers was 94 percent in Madhya Pradesh, 86
percent in Gujarat, 76.7 in Meghalaya and 81.5 percent in Tamil Nadu
respectively. As far as the date of expiry is concerned many of the respondents
did not even know that products also have a date of expiry. In fact they were
surprised that a packed commodity could also go bad over time. As their
awareness about this fact was almost negligible, their responses were also on
the expected lines. Nearly 74 percent of the respondents never enquired about
the expiry date. On the other hand only 4.7 percent of the respondents enquired
about the date of expiry before purchasing a product (Table 11).

62
 Table 11
Information about the Product at the Time of Purchase
(in %)

Uttarakhand

Meghalaya

Tamilnadu
Response

Gujarat

Total
M.P
Available choices
Always 42.2 32.0 38.0 14.0 37.8 32.8
Sometimes 32.8 27.0 24.8 24.5 16.0 25.0
Never 25.0 41.0 37.3 61.5 46.3 42.2
Contents
Always 2.3 2.7 2.3 5.2 13.8 5.3
Sometimes 1.3 0.3 7.7 9.5 36.5 11.0
Never 96.4 97.0 90.0 85.3 49.7 83.7
Price
Always 98.3 94.5 86.0 76.7 81.5 87.4
Sometimes 0.3 1.8 9.8 15.0 5.5 6.5
Never 1.5 3.8 4.3 8.3 13.0 6.2
Expiry date
Always 1.3 2.3 10.8 7.0 2.3 4.7
Sometimes 7.5 19.3 32.8 38.0 9.4 21.4
Never 91.2 78.4 56.4 55.0 88.3 73.9
Source: Field survey

Figure 9
Information about the Product at the Time of Purchase (total)

(a) Available Choice (b) Contents

63
 (c) Price (d) Expiry Date

Source: Field survey

Awareness about MRP

Almost all the packed commodities have MRP printed on it. The
awareness about the MRP is gradually increasing. Even in the rural areas the
study has revealed that 40.7 percent of the respondents knew about the MRP.
The survey reveals that 41.2 percent of the respondents in Uttarakhand, 40
percent in Madhya Pradesh, 43.2 percent in Gujarat, 37.8 percent in Meghalaya
and 41.3 percent in Tamil Nadu knew about the MRP (Table 12). However,
another interesting point is that even though 40.7 percent were aware about the
MRP but only 24.4 percent were aware that one can bargain even on the MRP
(Table 13). Majority of the respondents were in fact surprised as to how you can
ask for a lesser amount than what is printed and why should the shop keeper
sell the product at a lower price than the MRP. 51.2 percent did not know about
this fact (Figure 10).
Table 12
Consumer Awareness about MRP
(in %)
States Yes No
Uttarakhand 41.2 58.8
Madhya Pradesh 40.0 60.0
Gujarat 43.2 56.8
Meghalaya 37.8 62.3
Tamilnadu 41.3 58.8
Total 40.7 59.3
Source: Field survey

64
 Table 13
Consumer Awareness about Bargaining on MRP
(in%)
Bargain on MRP
Sates Yes No Can't Say
Uttarakhand 25.8 56.3 18.0
Madhya
Pradesh 24.3 50.8 25.0
Gujarat 28.8 48.3 23.0
Meghalaya 17.8 61.8 20.5
Tamilnadu 25.3 38.8 36.0
Total 24.4 51.2 24.5
Source: Field survey

Figure 10

(a) Awareness about MRP (b) Bargaining on MRP

Awareness about Standard Marks and Labels

Standard mark is a mark or symbol given to a product, which meets
certain standards with respect to the quality in terms of material used, methods
of manufacturing, labelling, packaging and performance. Standardization of
products is one of the best ways of protecting the consumers. The BIS and
other organisations are working on this and have come up with various
standard markings to ensure quality and purity of the products so that the
consumer gets value for money and is not cheated. During the survey it was felt
that the awareness level about such markings should be enquired about.
Accordingly questions relating to ISI, AGMARK, Hallmark, FPO and BEE were
enquired about (Table 14 and Figure 11).

65
Awareness about ISI mark
The Bureau of Indian Standards, empowered through a legislative Act of
the Indian Parliament, known as the Bureau of Indian Standards Act, 1986,
operates a product certification scheme, and has till date granted more than
30,000 licenses to manufacturers covering practically every industrial discipline
from Agriculture to Textiles to Electronics. The certification allows the licensees
to use the popular ISI Mark, which has become synonymous with quality
products for the Indian and neighbouring markets over the past 50 years.

This mark guarantees quality of every batch in production process (use

of components, testing standard of product, in-process checks by qualified
technical personnel). ISI licence is granted by the BIS for 1 year only and
performance of manufacturer is monitored before its renewal. This mark is
found on many products of day to day use like baby food, mineral water,
electrical and cooking gas appliances, pressure cookers, cement, steel, etc. Of
all the Marks the most popular is the ISI Mark as it is put on a number of
products that the rural consumers often use like bulbs, pipes, pump sets,
cement, etc. 40.5 percent of all the respondents were aware about the ISI mark
while 59.5 percent did not know about it. Many of them also said that they knew
that it is a seal of quality certified by the government but expressed
apprehension that there many products on which fake ISI mark is put and it is
difficult to identify the genuine marking. Awareness about ISI mark is highest in
Gujarat (48.5 percent) followed by Tamil Nadu (47 percent). Meghalaya ranks
the lowest with a response of 28 percent Table 15.
Table 14
Awareness about Standard Marks and Labels
States Standard Marks and Labels
ISI Agmark Hallmark FPO BEE
Yes No Yes No Yes No Yes No Yes No

Uttarakhand 41.2 58.8 13.0 87.0 2.8 97.2 0.8 99.2 2.3 97.8

M.P 37.6 62.4 11.0 89.0 6.5 93.5 0.8 99.3 1.0 99.0

Gujarat 48.5 51.5 15.2 84.8 16.5 83.5 1.0 99.0 2.0 98.0

Meghalaya 28.0 72.0 4.0 96.0 1.0 99.0 0.8 99.3 0.3 99.8

Tamilnadu 47.0 53.0 16.3 83.7 23.3 76.8 2.8 97.3 2.5 97.5

Total 40.5 59.5 11.9 88.1 10.0 90.0 1.2 98.8 1.6 98.4
Source: Field survey

66
 Figure 11
Awareness about Standard Marks and Labels (total)

Table 15
Consumer Awareness about ISI
(in %)
Consumers’ Response about ISI
States Yes No
Uttarakhand 41.2 58.8
M.P 37.6 62.4
Gujarat 48.5 51.5
Meghalaya 28.0 72.0
Tamilnadu 47.0 53.0
Total 40.5 59.5
Source: Field survey

Awareness about AGMARK

AGMARK Grading and Standardisation is a Central Sector Scheme with

the objective of promotion of grading and standardisation of agricultural and
allied commodities under Agricultural Produce (Grading & Marking) Act, 1937.
Quality standards for agricultural commodities are framed based on their
intrinsic quality. Food safety factors are being incorporated in the standards to
compete in World trade. Standards are being harmonised with international
standards keeping in view the WTO requirements. Certification of agricultural
commodities is carried out for the benefit of producer/manufacturer and
consumer. Certification of adulteration prone commodities viz. Butter, Ghee,

67
Vegetable Oils, Ground-Spices, Honey, Wheat Atta etc. is very popular.
Blended Edible Vegetable Oils and Fat Spread are compulsorily required to be
certified under Agmark. Facilities for testing and grading of cotton for the
benefit of cotton growers is provided through six cotton classing centers set up
in cotton growing belt in the country. Check is kept on the quality of certified
products through 23 laboratories and 43 offices spread all over the country.

AGMARK can be found on agricultural, horticultural, forestry and

livestock products. Consumers can look for AGMARK on:- cereals, pulses,
spices, honey, rice, wheat flour, edible oil , ghee and butter. The survey reveals
that the rural consumers are hardly aware about this marking. Only 11.9
percent of the respondents were aware of this mark while 88.1 percent were
unaware about such markings (Table 16). Similar is the situation across the five
states. During the discussions the respondents said that as far as agricultural
items like pulses, rice, wheat flour etc are concerned they did not purchase the
packed ones but purchased loose commodity normally in bulk. They did not
bother to know much about this and said that it is cheaper to buy unpacked
agricultural products and further they were unsure of the quality of the packed
commodity as they could not see it before purchasing.
Table 16
Consumer Awareness about Agmark

States Consumers’ Response on

Agmark
Yes No
Uttarakhand 13.0 87.0
M.P 11.0 89.0
Gujarat 15.2 84.8
Meghalaya 4.0 96.0
Tamilnadu 16.3 83.7
Total 11.9 88.1
Source: Field survey

Awareness about FPO

FPO mark can be seen on the container or packages of processed food
or agricultural produces like jam, jelly, sauce, fruit juice, pickles etc. Many of
these processed food or agricultural produce are not much in use in the rural
areas. It may be used occasionally but the rural consumers prefer to use the

68
local brands which certainly do not carry these markings. A few local brands of
sauce were visible in various shops during the survey but it was not an issue of
importance to them. Even though it is important that the consumers use quality
products but 98.8 percent of the respondents were not aware about the FPO
mark (Table 17).
Table 17
Consumer Awareness about FPO
(in%)
Consumers’ Response on FPO
States Yes No
Uttarakhand 0.8 99.2
M.P 0.8 99.3
Gujarat 1.0 99.0
Meghalaya 0.8 99.3
Tamilnadu 2.8 97.3
Total 1.2 98.8
Source: Field survey

Awareness about Hallmark

The gold consumption in India is increasing day by day. Therefore the
jewellers are also mushrooming. On the customer’s point of view, there is no
standardization of prices in jewellery. The other problem is that making charges
varies depend upon the jewellery shop. Even if the jewellery owners claim that
their jewellery contain different carats, people have no knowledge how to check
the carat of the jewellery, where it can be checked, etc. The jewelers claim of
Hall mark/ BIS standard/ 912 etc. it is very difficult to identify the purity of gold.
Anybody can forge hallmark/912 mark on the jewellery. Today getting good
jewellery/ gold at a fair price becomes Herculean task for the customers. On
the other hand, if we want to sell our gold ornaments, they look very
suspiciously about the purity of gold. When we buy gold from a jeweller's shop,
we consumers never show mistrust to the jewellers. If we want to sell the same
gold, they look suspiciously that whether the gold is pure or not. We need to
put in place a scientific tamperproof instrument for checking the purity of gold
and also need an authority to check the gold's valuation, purity etc. under govt.
control so that the consumer should not feel cheated when they buy gold.

Government of India has identified BIS as sole agency in India to operate

this scheme. BIS hallmarking Scheme is voluntary in nature and is operating
under BIS Act, Rules and Regulations. It operates on the basis of trust and thus

69
it is desirable that the aspect of quality control is inbuilt in the system
responsible for managing quality. The BIS Hallmarking Scheme has been
aligned with International criteria on hallmarking (Vienna Convention 1972). As
per this scheme, licence is granted to the jewellers by BIS under Hallmarking
Scheme. The BIS certified jewellers can get their jewellery hallmarked from any
of the BIS recognized Assaying and Hallmarking Centre. The recognition to an
Assaying and Hallmarking Centre is given against BIS criteria which is in line
with International criteria on Marking and Control of Precious Metals. The BIS
hallmark, a mark of conformity widely accepted by the consumer bestow the
additional confidence to the consumer on the purity of gold jewellery.

Gold is not only a precious commodity but it also acts as a security. Tons
of gold are purchased every year. People buy gold from the jewelers only on
faith. However, it has been found that consumers easily get cheated as far as
the quality and purity of gold is concerned. To save the consumers from getting
cheated the process of hallmarking has been introduced by the government.
HALLMARK indicates that the jewellery conforms to the marked fineness of
gold content. It is being done for both gold and silver. Jewellery is hallmarked
from a BIS recognised Assaying & Hallmarking Centre (A&HC). Five
compulsory symbols make Hallmark; BIS logo, Fineness in millesimal number,
Assaying & Hallmarking Center's mark, Year of marking (‘A’ = 2000) and Logo
of BIS certified jeweler/manufacturer. The awareness about Hallmark is still
very low and consumers still buy jewellery without Hallmark. Amongst the
sample respondents only 10 percent knew about Hallmark (Table 18). The state
wise results show that in Tamil Nadu 23.3 percent of the respondents knew
about Hallmark. However, it is interesting to know that many who know about
Hallmark also did not purchase Hallmark jewellery. Instead they preferred to
purchase it from their traditional jeweller.

70
 Table 18
Consumer Awareness about Hallmark
(in%)
Consumers’ Response on
Hallmark
States Yes No
Uttarakhand 2.8 97.2
M.P 6.5 93.5
Gujarat 16.5 83.5
Meghalaya 1.0 99.0
Tamilnadu 23.3 76.8
Total 10.0 90.0
Source: Field survey

Awareness about BEE

The BEE Star Energy Efficiency Labels have been created to
standardize the energy efficiency ratings of different electrical appliances and
indicate energy consumption under standard test conditions. These labels
indicate the energy efficiency levels through the number of Stars highlighted in
colour on the label. The BEE Star Labels include a Star Rating System that
ranges from One Star (least energy efficient, thus least money saved) to Five
Stars (most energy efficient, thus most money saved). It is a recent
phenomenon and is found on electrical appliances like bulbs, refrigerators and
air conditioners. Since it relates to electrical appliances it is expected that the
level of awareness will be low.

The awareness level in the rural areas about BEE was on the expected
lines as 98.4 percent of the respondents did not know about it (Table 19). In
Uttarakhand 97.8 percent of the respondents, in Madhya Pradesh 99 percent, in
Gujarat 98 percent, in Meghalaya 99.8 percent and in Tamil Nadu 97.5 percent
respectively were not aware about BEE.
Table 19
Consumer Awareness about BEE
(in%)
Consumers’ Response on BEE
States Yes No
Uttarakhand 2.3 97.8
M.P 1.0 99.0
Gujarat 2.0 98.0
Meghalaya 0.3 99.8
Tamilnadu 2.5 97.5
Total 1.6 98.4
Source: Field survey

71
 Forms of Consumer Exploitation
In the rural areas, the consumers are exploited in many ways. The most
common forms of exploitation are food adulteration, under weight, over charge,
spurious goods etc. According to the survey, 40.2 percent of the total
respondents said that they were overcharged. 14 percent were victims of food
adulteration, 12 percent complained about the poor quality of the product, 7.5
percent about deficiencies in services and 7.4 percent complained of lesser
weight. If we analyse the state wise responses then in Uttarakhand 11.5
percent complained of food adulteration. In Gujarat 13.5 percent, in MP 20
percent while in Tamil Nadu it was 22 percent. Over charging is a common
problem in all the states. 48 percent of the respondent in Gujarat said they were
overcharged. We find that over charging and underweight is the major form of
exploitation of the rural consumers (Table 20). It was also found that the
balance that is being used is not as per government specifications and also not
correctly calibrated. More over the weights being used are not of standard
quality.
Table 20
Consumers’ Experience regarding Forms of Exploitation

(in%)
Sates Consumers’ Experience on different issues
Deficiency/Negligenc
Spurious/Duplicate

False information
Food adulteration

Goods/Services
Over charging

e of services
Under weight

regarding

Yes No Yes No Yes No Yes No Yes No Yes No

Uttarakhand 11.5 88.5 7.0 93.0 36.0 64.0 13.8 86.3 9.25 90.8 4.0 96.0
M.P 20.0 80.0 4.0 96.0 29.8 70.3 15.5 84.5 7.5 92.5 1.0 99.0
100.
Gujarat 13.5 86.5 3.5 96.5 48.0 52.0 5.3 94.8 3 97.0 0.0 0
Meghalaya 2.8 97.3 14.3 85.8 40.0 60.0 8.3 91.8 5.5 94.5 2.0 98.0
Tamilnadu 22.2 77.8 8.3 91.7 47.0 53.0 17.5 82.5 12.1 87.9 5.6 94.4
Total 14.0 86.0 7.4 92.6 40.2 59.9 12.1 88.0 7.5 92.5 2.5 97.5
Source: Field survey

72
 Figure 12

Consumers' Experience on Different Issues

60.0

48.0

47.0
50.0

40.2
40.0
Food adulteration
36.0

40.0
Short weighting

29.8
Over charging
30.0
Poor quality products

22.2
20.0

Deficiency/Negligence of services

17.5
20.0
15.5

False information regarding

14.3

14.0
13.8

13.5

12.1

12.1
11.5

8.3

8.3
9.3

7.5

7.4

7.5
7.0

10.0

5.6
5.5
5.3
4.0

4.0

3.5

3.0

2.8

2.5
2.0
1.0

0.0
0.0
Uttaranchal MP Gujarat Meghalaya Tamilnadu Total
States

Consumers Reaction to Exploitation

In case a consumer felt that he was exploited /cheated then what does
he do? How does a consumer react? This question is of immense relevance to
the study. Interestingly 28.5 percent of the respondents said they just ignored
the problem and 16.3 percent said they tried to get back the money.

Table 21
Consumers’ Reaction to Exploitation
(In %)
States Consumers’ Reaction
Consumer Protection Forum
consumers & pressurise the

Tried to replace the goods

Lodged a complaint at the
Tried to get the back the
Ignored the exploitation

Mobilise the other

money

seller

Uttarakhand 29.3 14.5 1.0 0.0 55.3

M.P 28.5 15.3 0.3 0.0 56.0
Gujarat 35.8 9.0 0.0 0.5 54.8
Meghalaya 17.8 3.5 0.0 0.0 78.8
Tamilnadu 31.3 39.0 2.8 0.0 27.0
Total 28.5 16.3 0.8 0.1 54.4
Source: Field survey

73
 Some respondents said that they had mobilized people to put pressure
on the seller to address their grievances. 54.4 percent of the respondents tried
to replace the product. It is to be noted that in the rural areas the shopkeepers
give goods on credit therefore for the sake of convenience the consumers have
no option but to only replace the product and not refund the money.

Figure 13
Consumers’ Reaction to Exploitation (total)

Awareness about the Consumer Protection Act

The Consumer Protection Act was enacted in 1986 to better protect the
consumers. It provides for a three-tier redressal mechanism at the district, state
and the National levels to address the complaints of the consumers.
Consumers can make use of this mechanism only if they are aware of its
existence. In spite of wide publicity being given by the government, not many
consumers in the rural areas are aware about this Act. Of all the respondents
92.4 percent said they did not know about the Consumer Protection Act. Only
7.6 percent knew about it. As far as the awareness in the states was concerned
only 7.5 percent were aware about the CPA in Uttarakhand, 6.5 percent in
Madhya Pradesh, 8.3 percent in Gujarat, 6.3 percent in Meghalaya and 9.5
percent in Tamil Nadu respectively (Table 22).

74
 Table 22
Awareness about Consumer Protection Act
(in%)
States Response on awareness about CP Act
Yes No
Uttarakhand 7.5 92.5
MP 6.5 93.5
Gujarat 8.3 91.8
Meghalaya 6.3 93.8
Tamilnadu 9.5 90.5
Total 7.6 92.4
Source: Field survey

Figure 14
Awareness about Consumer Protection Act (total)

Source: Field survey

Sources of Information about Consumer Protection Act

Among the respondents who were aware about the Act, majority of them
34.2 percent received the information from the electronic media i.e. Television
and Radio while a small segment 6.5 percent gathered information from
newspapers/ magazines and 6.5 percent from NGOs accounting for 1.1 percent
(Table 23).

75
 Table 23
Source of Information about Consumer Protection Act

(in %)
States

Newspapers/Magazi
Television/Radio

Neighbours
Hoardings

Can’t say
NGOs
nes
Uttarakhand 75.9 13.0 3.7 0.00 0.0 7.4
M.P 26.9 7.7 0.0 0.00 7.7 57.7
Gujarat 12.1 6.1 0.0 12.12 30.3 39.4
Meghalaya 44.0 4.0 8.0 0.00 0.0 44.0
Tamilnadu 2.2 4.3 0.0 6.52 34.8 52.2
Total 34.2 6.5 2.2 2.17 6.5 48.4
Source: Field survey

Figure 15
Source of Information about CPA (total)

34.2 Television/Radio
Newspapers/Magazines
48.4 Hoardings
Neighbours
NGOs
Can't say
6.5
2.2
6.5
2.17

Awareness about Grievances Redressal Mechanism

The Consumer Protection Act, 1986 provides for a three-tier mechanism

at the district, state and the National levels to redress the grievances of the
consumers. Consumers can file a complaint which is to be disposed of within a
specified time framework. The procedure is based on summary trial and
principles of natural justice. Many of the respondents did not know about the

76
redressal mechanism. Even those who knew about the Act were to a large
extent unaware about the main provisions of the Act. Only 7.6 percent of the
respondents knew about the Consumer Protection Act and when further asked
to enumerate the provisions of the Act they could only mention a few of them.
Only 22.6 percent of the respondents who were aware about the Act, knew
about the redressal mechanism under the Act. On the other hand 77.4 percent
of the respondents did not know about it. As far as the sampled states are
concerned the percentage of respondents who knew about the redressal
mechanism are: Uttarakhand 24.2 percent, Madhya Pradesh 21.7 percent,
Gujarat 26.2 percent, Meghalaya 13 percent and Tamil Nadu 27.7 percent
respectively. (Table 24)

Table 24

Awareness about Grievances Redressal Mechanism under CPA

(Responses from respondents aware about CPA)
(in %)
States Yes No
Uttarakhand 24.2 75.8
Madhya Pradesh 21.7 78.3
Gujarat 26.2 73.8
Meghalaya 13.0 87.0
Tamilnadu 27.7 72.3
Total 22.6 77.4
Source: Field survey

Figure 16
Awareness: System of Redressal of Consumer Grievances

Tota l 77.4
22.6

Ta milna du 72.3
27.7

Megha la ya 87.0
13.0

Guja ra t 73.8
26.2

Ma dhya Pra de sh 78.3

21.7

Utta ra ncha l 75.8

24.2

Yes No

77
Awareness about who can File a Complaint
Further the respondents were asked as to who can file a complaint under
the Consumer Protection Act. As revealed the awareness level about the Act
and its provisions is very low. Of the total respondents who were aware about
the Act, 83.7 percent did not know as to who can file a complaint (Table 25).
However, 13.5 percent of the respondents knew that the complaint can be filed
by the consumer and 1.7 percent said that any voluntary consumer organization
can file a complaint.
Table 25
Awareness about Filing Complaint
(in %)
states Response on Awareness About Who can
File a Complaint

The Central Government

Any voluntary consumer

The State Government

Don’t Know

association
Consumer

Others
Uttarakhand 84.2 14.0 0.8 0.0 1.0 0.0
M.P 86.0 12.5 1.0 0.0 0.0 0.5
Gujarat 80.3 15.0 2.5 1.0 1.0 0.3
Meghalaya 90.0 9.3 0.5 0.0 0.3 0.0
Tamilnadu 78.0 16.5 3.8 0.5 0.0 1.3
Total 83.7 13.5 1.7 0.3 0.5 0.4
Source: Field survey

Figure 17

Consumer Awareness about Filing of Complaint

0.5 Don't Know
0.3
0.4
1.7 Consumer

13.5
Any voluntary consumer
association

The Central Government

83.7
The State Government or Union
Territory Administration

NGOs

78
Opinion on Issues Relating to Consumer Protection
The respondents were asked a variety of questions to know their views
about the measures relating to consumer protection. Only 9.2 percent of the
respondents agreed that the consumers were aware about their rights and 90.8
percent answered in the negative (Table 26). Further the respondents were
asked whether consumers’ are well protected by law. 32.6 percent said that the
consumers were well protection by law while 67.4 percent could not answer this
question. The governments both central and the state are implementing a
variety of welfare programmes for the consumers but many of the consumers
do not know about this. Only 15 percent agreed that consumer welfare
schemes are well implemented by the government. On the other hand 85
percent answered the question in negative.

Table 26
Consumer’s Opinion on Consumer Protection related Issues
(in %)
States Are Consumers Are consumers Are consumers
Aware about their well protected by aware about
Rights? law? consumer welfare
schemes?
Yes

Yes

Yes
No

No

No
Uttarakhand 6.7 93.3 13.4 86.6 16.8 83.2
M.P 6.5 93.5 13.5 86.5 12.8 87.2
Gujarat 13.4 86.6 49.7 50.3 21.3 78.7
Meghalaya 1.4 98.6 53.3 46.7 7.3 92.7
Tamilnadu 17.8 82.2 33 67 17.2 82.8
Total 9.2 90.8 32.6 67.4 15 85
Source: Field survey

Awareness about “Jago Grahak Jago”

Jago Grahak Jago is a popular advertisement issued by the Department
of Consumer Affairs, which intents to inform, educate and protect the
consumers. This message has also reached the rural consumers. 34.2 percent
of the respondents knew about this slogan (Table 27). These were those who
could actually say what it meant. On the other hand 65.8 percent did not know
what was being conveyed through this advertisement. In Uttarakhand 43.8

79
percent knew about it while in Tamil Nadu it was only 15.8 percent of the
respondents who knew about it.

Table 27
Consumers’ Awareness about ’JAGO GRAHAK JAGO”
(in %)
States Yes No
Uttarakhand 43.8 56.3
M.P 39.0 61.0
Gujarat 41.2 58.8
Meghalaya 31.3 68.8
Tamilnadu 15.8 84.3
Total 34.2 65.8
Source: Field survey

Figure 18

Awareness : 'JAGO GRAHAK JAGO'

65.8
Total
34.2

84.3
Tamilnadu
15.8

68.8
Meghalaya
31.3

58.8
Gujarat
41.2

61.0
MP
39.0

56.3
Uttaranchal
43.8

Ye s No

Need for Awareness Programmes

The respondents were of the view that there is a need to educate the
people about their rights and obligations so that they can be protected. Lack of
education and awareness about their rights is the major cause of their
exploitation. 83.2 percent of the respondents agreed that there is a need to
create awareness among the consumers. Even in the sample states there was
a demand for consumer awareness programmes (Table 28).

80
 Table 28
Consumers’ Opinion on Need for Awareness Programme (in %)

States Opinion on Need for Awareness

Programme
Yes Can't say No
Uttarakhand 85.3 11.5 3.3
M.P 80.0 16.0 4.0
Gujarat 93.0 4.3 2.8
Meghalaya 96.5 3.0 0.5
Tamilnadu 61.3 13.8 25.0
Total 83.2 9.7 7.1
Source: Field survey

Figure 19

Consumers' opinion on Need for Awarness Programme

Ye s No Can't s ay
96.5
93.0

100.0
85.3

83.2
80.0

90.0
80.0
61.3

70.0
Percentage

60.0
50.0
40.0
25.0

30.0
16.0

13.8
11.5

20.0
9.7
7.1
4.3
4.0
3.3

3.0
2.8

10.0
0.5

0.0
Uttaranchal MP Gujarat Meghalaya Tamilnadu Total
State

To a question as to who should be given the responsibility of educating

the consumers through awareness programmes, 62.6 percent of the
respondents said that it should be the responsibility of the gram panchayats. On
the other hand 20.9 percent of the respondents were of the view that this task
should be carried out by the government and 9 percent felt that the educational
institutions can play a role in spreading awareness among the consumers
(Table 29)

81
 Table 29
Consumers’ Opinion on Spreading Awareness by Different Agencies
(in %)
States Who should spread consumer
awareness

Educational Institute

Gram Panchayat

No response
Government
Citizen

NGO
Uttarakhand 0.5 0.0 11.0 3.0 78.5 7.0
M.P 1.5 0.0 15.3 3.0 71.8 8.5
Gujarat 1.5 0.0 22.8 5.8 68.8 1.3
Meghalaya 0.3 0.0 23.8 10.8 59.3 6.0
Tamilnadu 4.0 0.5 31.5 22.5 34.8 6.8
Total 1.6 0.1 20.9 9.0 62.6 5.9
Source: Field survey

Figure 20

Opinion on diffrent Agencies for spreading Consumer Awareness

90.0
78.5

80.0
71.8

68.8

70.0
62.6
59.3

60.0 Citizen
Government
50.0 Educational Institute
34.8

40.0 Gram Panchayat

31.5

No response
30.0
23.8
22.8

22.5

NGO
20.9
15.3

20.0
11.0

10.8

9.0
8.5
7.0

6.8

10.0
6.0

5.9
5.8

4.0
3.0

3.0
1.5

1.5

1.6
1.3
0.5

0.5
0.3
0.0

0.0

0.0

0.0

0.1

0.0
Uttaranchal MP Gujarat Meghalaya Tamilnadu Total
States

Sum Up
Consumer protection initiatives by the Government hinge on 3 basic
parameters. Firstly ensuring a legal framework that comprises of Consumer
Protection Act. The Consumer Protection Act enacted in 1986 has been
recognised as one of the finest basis of legislation enacted in any part of the
world and India can boast of being the only country having such specialised

82
legislation for consumer protection. The CPA has a three tier, simple, quasi
judicial machinery at the National, State and District level for hearing cases
raised by consumers. Secondly, evolving standards for different products to
enable the consumers to make an informed choice about different products.
Standards which are the essential building block for quality play a key role in
consumer protection. Standard could be on technical requirement
(specifications), improved specific standard terminology (glossary of terms),
codes of practice or test methods or management systems standards. The
standards are set generally by Government or inter-Governmental bodies but
world wide it is being recognised that voluntary establishment of standards
plays an equally important role for protecting consumers. Thirdly, consumer
awareness and education is the main building block for consumer
protection.

National Action Plan on Consumer Protection

Consequent upon the 50th National Development Council Meeting,

Planning Commission has identified consumer awareness, redressal and
enforcement of Consumer Protection Act as a priority agency for action by the
Deptt. of Consumer Affairs. The allocation for consumer protection activities
was significantly enhanced in the last 2 years of the X Plan and
Consumer Awareness Scheme in the XI Plan. The Consumer Awareness
Scheme for the XI Plan amounting to a total of ` 409 crores has been approved
by the Cabinet Committee on Economic Affairs on 24.01.08. This scheme has
been formulated to give an increased thrust to a multi media publicity campaign
to make consumers aware of their rights. The slogan ‘Jago Grahak Jago’ has
now become a household name as a result of publicity campaign undertaken in
the last 3 years. Through the increased thrust on consumer awareness in the
XI Five Year Plan, the Government has endeavoured to inform the common
man of his rights as a consumer. As part of the consumer awareness scheme,
the rural and remote areas have been given top priority. In a big country like
India, given the scenario of economic disparity and level of education and
ignorance, educating the consumers remains a gigantic task. Government has
taken up number of activities and schemes in creating consumer awareness in
the country as part of this Consumer Awareness scheme.

83
Multi Media Publicity Campaign

As part of the Multi Media publicity campaign, the activities being undertaken
are: Publicity through print media using news paper advertisements, to educate
the consumers about their rights and responsibilities. Publicity through
electronic medium by telecast of video spots of 30 seconds duration on various
consumer related issues such as Grievance Redressal system, MRP, ISI Hall-
Mark, Alternate Dispute, Redressal system, weights and measures, Rights of
Consumers etc. Issues pertaining to rural and remote areas have been given
prominence in the various advertisement spots.

Telecast of advertisement in North Eastern states in Regional

languages of 20 seconds and 30 seconds duration on various consumer related
issues such as M.R.P. (Maximum Retail Price), Short Measurement, Expiry
date on medicine, adulteration, damaged product and redressal system. The
Department in consultation with the Department of Post has disseminated
consumer awareness messages through Meghdoot Post cards to reach far-
flung rural areas including North East States. A bigger plan of partnership with
the Department of Posts to use the vast network of postal department for
spreading the message of consumer awareness has been chalked out
Calendars containing the message of consumer awareness are being displayed
through the vast network of 1.55 lakhs post offices.

In spite of these initiatives of the government no specific programme or

scheme exists which exclusively address the needs and aspirations of the rural
consumers. Rural consumers are generally seen as a homogeneous group and
most of the policies are designed keeping in view the needs of the urban
consumers. The benefit of various programmes to educate the consumers and
enhance their awareness has met with little success. Until the rural consumers
are empowered the consumer movement in the country will continue to remain
weak. A new strategy based on the ground realities needs to be made so that
the bulk of Indian consumers who live in the rural areas are protected.

84
 CHAPTER IV

Findings and Recommendations

Findings

1. The respondents covered various strata of the society so as to make it a

representative sample. Males constituted 68.6 of the sample size
whereas 31.5 percent were females.

2. As far as the educational level of the respondents is concerned, 23.1

percent had no schooling, 17.9 percent of them had attended school up
to the primary level, 26 percent had middle schooling, 16.3 percent had
studied up to high school, 10.3 percent had schooling up to intermediate
level and 6.6 percent were Graduates. Post graduates and Professionals
consisted of 1 percent of the respondents.

3. 1.6 percent of the respondents were below 20 years of age. 23.7 percent
belonged to the age group between 20 -30 years, 38.5 were from the
age group of 30-40 years, 22.6 percent were within 40-50 years of age
and 13.7 percent of the respondents were above 50 years of age.

4. As far as their occupational status is concerned, owner/cultivators

constituted 9.9 percent of the respondents while marginal farmers
constituted 16.2 percent. The major segment of the respondents, which
is 25 percent, consisted of labourers. Among the respondents, self
employed constituted 12.9 percent, unemployed 13.8 percent and
housewives 13.8 percent.

5. The survey revealed that majority of the respondents (44.4) percent had
an annual income of less than ` 24,000. The group with annual income
between ` 24, 000 - 60,000 consisted of 40.1 percent. 11.4 percent of
the respondents had income between ` 60,000 – 1,20,000. Those whose
income was above ` 1, 20, 000 constituted 4.15 percent of the sample
size.

6. As far as the monthly expenditure of the respondents is concerned, 43.5

percent spent below ` 2,000, 45 percent spent between ` 2,000 to 5,000,
8.45 percent of the respondents’ expenditure was between ` 5, 000 to
10,000. Those whose expenditure was above ` 10,000 constituted 2.6
percent of the sample size.

7. The survey reveals that a major portion of the respondents (34.9

percent) depend upon the local haat or weekly markets, 34.8 percent
depend upon nearby town or kasba. Only 18.15 percent depend upon
village shops and 13 percent go to city for shopping.

85
8. As regards the inquiry into terms and condition of the goods/services
before transaction was concerned more than half (58%) did not make
any enquiry 23.1 percent of the respondents enquired about it
sometimes and only 19 percent made enquiry frequently.

9. Enquiry into various aspects before purchase was directly connected to

the level of education. Only 7.7 percent of the respondents who had not
attended schools inquired into the terms and conditions before purchase.
On the other hand 63.3 percent of the graduate respondents sought
information before purchasing goods or availing a service. Among the
sample respondents only 17.8 percent insisted on taking a cash memo
regularly, 31.5 percent asked for it only sometimes while purchasing
costly goods and the majority 50.8 percent never insisted for cash
memo.

10. While purchasing goods 32.8 percent of the respondents always

checked the available choice of the product, 25 percent checked it
sometimes and 42.2 percent did not do that. 50.8 percent of the rural
consumer did not bother to know about the contents and the expiry date
of the product. They are conscious only about the price of the product
and sought information about the price. 83.7 percent of the rural
consumer did not think it important to seek information about the
nutritional value of the product. Respondent consumers were price
conscious 87.4 percent of them inquired about the price of the product.

11. 73.9 percent of the rural consumer did not see the expiry date only 21.4
percent checked it sometimes. 40.7 percent of the survey rural
consumers knew about MRP. Only 24.4 percent knew that one could
bargain on the MRP and more than half (51.2 percent) did not know
about the fact. 40.3 percent of the rural consumers are aware about ISI
mark, 11.9 percent knew about AGMARK, 10.0 percent about
HALLMARK, 1.2 percent about FPO and 1.6 percent about BEE
markings.

12. Amongst the various ways of exploitations, 40.2 percent were

overcharged, 14 percent were victims of food adulteration, 12 percent
complained about poor quality of products, 7.5 percent about deficiency
in services and 7.4 percent complained about lesser weights. On being
cheated/exploited 28.50 percent respondents ignored the problem,
16.3% tried to get back the money or replace the goods and some
respondents (0.8%) tried to mobilize people to put pressure on seller to
address their grievances.

13. 92.4 percent of the respondents were not aware about the CP Act. 34.2
percent of the respondent knew about Jago Grahak Jago. Of the
respondents who were aware about the Act, 34.2 percent received the
information from the electronic media i.e. TV/ Radio 6.5 percent gathered
information from newspapers/ journals and 6.5 percent from NGOs. Of
the respondents aware about CP Act only 22.6 percent were aware
about the redressal mechanism under the Act whereas 77.4 percent

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 were unaware about it. Of the total respondents aware about the Act,
83.7 percent did not know as to who can file a complaint, 13.5 percent
knew that the complaint can be filed by consumer and 1.7 percent said
that any VCO can file a complaint.

14. Only 9.2 percent of the respondents agreed that the consumers were
aware about their rights and 90.84 percent answered in negative. 32.6
percent respondents said that the consumers were well protected by law
while 67.4 percent could not answer this question. Only 15 percent
agreed that consumer welfare schemes are well implemented by the
government and 85 percent respondents answered the question in
negative.

15. Awareness about Jago Grahak Jago was quite high. 34.2 percent of the
respondents knew about the slogan. However, majority of respondents
(65.8 percent) did not know what was being conveyed through the
advertisement. 83.2 percent of the respondents agreed that there is a
need to create awareness among the consumers. To the question as to
who should be given the responsibility of educations consumers 62.6
percent of the respondents were of the view that it should be
responsibility of the gram panchayats, 20.9 percent of the view that this
task should be carried by the government and 9 percent felt that the
educational institutions can play a role in this.

Recommendations

1. Rural Markets are flooded with substandard goods, adulterated food

items and unsafe products. The rural markets are dumped with look alike
and pass off products. The quality of service being provided is not only
poor, but lacks transparency resulting in consumer exploitation.
Therefore, there is a need to prioritise the protection of rural consumers
by strengthening the enforcement mechanism.

2. Lack of choice is a major problem in the rural areas as the consumers do

not have access to a variety of products. The dependence of the rural
consumers on the neighbourhood shops, who sell on credit, is adding to
the problem. Therefore standardisation of products and availability of
packed commodities will help the rural consumers to a large extent.

3. The consumers in the rural areas lack awareness about various

measures taken by the government. The multimedia campaign has not
been able to educate the consumers to a large extent. The government
should launch vigorous campaign to educate the consumers with the
involvement of local NGOs, schools and colleges. Awareness about the
consumer rights and obligations should be emphasised in such
programmes. The Panchayati Raj Institutions should also be involved in
the consumer movement and the Gram Sabha should play an active role
in generating consumer awareness. The Panchayats must be
encouraged to celebrate atleast the National Consumer Day.
Organisations like Nehru Yuva Kendras, NSS and NCC should be

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 involved in consumer education at the grass root level as they can play
an important role in enhancing awareness. The strategy should be to use
various organisations to take forward the consumer movement.

4. Rural consumers are not aware about various standardisation marks and
therefore, unable to read and understand the labels on the products.
Both print and electronic media must be used to propagate this message
among the rural consumers.

5. The survey reveals that inspite of 25 years of the CP Act, rural

consumers are largely unaware about the Act and its various provisions.
It would be appropriate that a chapter on consumer protection is
incorporated in the school curriculum so that the children become aware
about the Act and they could act as change agents.

6. The rural markets are mostly unorganised. Therefore, there is also a

need to regulate the rural markets in terms of quality, safety and weights
and measures. The balance used in the rural markets is not of standard
quality. Stones are still being used to weight the products and in most of
the cases the balance is never calibrated properly. The Department of
Legal Metrology (Weights and Measures) in the states has to play a
proactive role in this. Pamphlets and leaf lets should be distributed in the
rural markets periodically highlighting these points and what the
consumers can do to prevent being cheated.

7. The SIRDs (State Institute of Rural Development) have the mandate to

organise training programmes for the elected representatives and other
local functionaries of various departments implementing programmes
and schemes. The SIRDs should include a module on consumer welfare
in their training programmes to educate the participants on the need and
importance of consumer protection.

8. Its time that rural consumers are not viewed as a homogeneous group.
Rural women, children and farmers have specific problems and specific
policies should be in place to educate and protect them.

9. The District Forums should play a more active role and the members
should be involved in consumer literacy. The consumers must be made
awareness about the various decisions of the consumer forums so that
their confidence in the redressal mechanism can be enhanced. The
District Forums should have circuit benches at the block level so that the
rural consumers can have easier access to justice and the redressal
mechanism.

10. Preference should be given to rural areas while setting up consumer

advisory and mediation centres. The rural consumers should also have
the benefit of ADR as it will save both money and time. Such centres
should be funded by the state/central government and set up at each
block headquarters to start with. The local VCOs can be involved in

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 managing the advisory centres. This will help the rural consumers to a
large extent.

Sum Up

Rural Consumers: Need for Education and Empowerment

In the emerging scenario it is necessary to protect the rural consumers

by educating them about their rights and empowering them to make decisions
based on information about the goods and services. Awareness has to be
created among the rural consumers. So far the consumer movement has
largely been confined to the urban centers, and with the expanding rural
markets now the focus has to shift to protect the rural consumer.

Consumer organizations and similar civil society groups have an

important role to play in consumer education. They have the means to provide
consumers with information and help them to make informed choices.
Consumer information needs to be available at the right time and in the right
place before or when purchasing decisions are made. Several NGOs are very
active in the rural areas in advocating for consumer rights but due to their
limited ability to put enough pressure on policy makers, they lack consumer
support. This is the dilemma of NGOs in consumer protection. Regardless of
these limitations consumer empowerment programmes through regular training
and education are very crucial. It is also time to consider consumer education
as part of the school and college curriculum.

There is also a need for the effective implementation of various

provisions of the legislations enacted to protect the consumers from fake and
adulterated products from entering the markets so that the consumers interests
could be safeguarded. Various business houses, NGOs and the governmental
agencies have to come together to join hands to combat counterfeiting.

Strengthening Redressal Mechanism

Redress of complaints is a major concern for consumers. Having a right

to access the redressal mechanism is of prime importance. For the right to
redress to have a practical value, a mechanism must exist to ensure that it can
be exercised effectively. If consumer confidence is to be built up they need

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assurances that if things go wrong they can seek redress. The District
Consumer Disputes Redressal Forums which act as the first point of contact in
case of a complaint have to play a pro-active role in building consumer
confidence. The district forums should be strengthened and initiatives aimed at
promoting access to simple, swift, effective and inexpensive legal channels be
taken up. In many states the District forums are short of members and also
lack the required infrastructure. The state governments should address the
problems of district forums as well as the consumers to make the redressal
mechanism more effective and also responsive. Moreover, it becomes difficult
for a rural consumer to go to the district headquarters to file a complaint and
then pursue his complaint. It will be better if the concept of circuit benches for
the district forums is also introduced as in the case of National Commission and
the State Commissions so that access to justice is ensured for the rural
consumers. There is also a need to set up more than one district forum in a
district to clear up the pendency of complaints, which has increased
substantially. Any further delay in disposal of the complaints will only shatter the
faith of consumers in the redressal mechanism.

Role of Panchayati Raj Institutions

To reach the rural consumers, it is imperative to involve the panchayati

raj institutions in not only educating consumers but also ensuring that fake and
spurious products are not sold in the rural markets. These institutions can play
a meaningful role in consumer protection and consumer welfare and this has
been recogonised by the policy makers. The recommendations contained in the
20th Report of the Standing Committee on Food, Consumer Affairs and Public
Distribution (14th Lok Sabha) on the subject ‘Consumer Movement in the
Country’ needs to be effectively implemented. It recommended that the
Department of Consumer Affairs should take the desired initiatives to involve
panchayat raj institutions in various programmes related to consumer
awareness. The publication of the Department specifically ‘UPBHOKTA
JAGARAN’ should be brought out in regional languages and distributed to the
elected representatives of the PRIs.

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 The Committee further recommended that the best forum to educate the
rural masses about their rights as consumers as well as the techniques to
redress to their grievances is the meetings of the gram sabha. It felt that the
Department of Consumer Affairs in consultation with the Ministry of Panchayati
Raj should take desired initiatives to have mandatory meetings of the Gram
Sabha on 24th December (National Consumer Day) where the villagers could
properly be educated about their rights as consumers. No doubt some initiatives
have been taken in this direction and capacity building and awareness
programmes are being organized through the State Institutes of Rural
Development. But to reach such a large number of rural consumers, a vigorous
campaign with the involvement of the panchayats needs to be taken up.
Specific capacity building programmes for the elected members of the PRIs are
to be developed with adequate financial sanctions. All stakeholders need to
coordinate their activities and ensure that adequate literature is also made
available in the local languages. Street plays and folk songs can be meaningful
instruments to create awareness in the rural areas. Apart from these there is
also a need to formulate appropriate policies and strategies to protect the rural
consumers particularly the farmers, women and children.

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 Annexure

Table 17
Statement Indicating Number of Samples Tested of Drugs, Found
Substandard / Spurious During the Period of 1995-2003

Year Sample Not of Spurious Not of Spurious

Tested Standard Standard (%)
quality quality
(%)
1995-1996 32770 3490 100 10.65 0.31
1996-1997 38936 3189 94 8.19 0.24
1997-1998 32936 2979 157 9.04 0.48
1998-1999 38936 3189 94 8.19 0.24
1999-2000 35570 3666 115 10.31 0.32
2000-2001 36947 3088 112 8.36 0.30
2001-2002 38824 3458 96 8.91 0.25
2002-2003 36314 3395 125 9.35 0.34
Source: Health Administrator Vol : XIX Number 1: 65-73

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 Table 16
Financial Loss due to Counterfeit Products Market of Different Sector

Sector Estimated Annual Economic Loss Statistical Facts

Pharma Revenue loss of 5-7% per annum to total market due counterfeit • 15-25% of all medicines sold in India are counterfeit
drugs to (WHO, 2009) • Estimates put the counterfeit drug industry ranging
from 0.25 to 25 per cent of the overall pharma
industry
• Every 5th, if not 4th medicine being sold in over
600,000 retail chemist shops is fake.
• The spurious drug market is estimated at INR20-60
billion in 2008 in a market of ` 900 billion, including
exports.
• Estimated, the total fake market business is of `
6,500 crores every year!
• Estimated that about 38% of medicines supplied in
government hospitals in India are counterfeit, and
40% of all drugs sold in India are counterfeit.

FMCG The FMCG industry alone has been facing losses of over ` 5,000
crore per year, due to counterfeit products Of the ` 113,000-crore
FMCG market in India (February 2, 2010, India PRwire).
Counterfeit products result in an annual loss of approximately `
30,000 crore to the industry and ` 15,000 crore to the Government
exchequer.
• Pass-offs are look-alike products that resemble the
original products, mainly through misspelling of the
trademark. For example, Sunslik instead of Sunsilk,
Clemic Plus or Climic Plus or Cosmic Plus instead
of Clinic Plus, Collegiate for Colgate, Vips Rub or
Vives Rub as a pass-off for Vicks Vaporub.
• a global marketing research firm, 10-30 per cent of
cosmetics, toiletries and packaged food are
counterfeits (AC Nielsen)
• 10% of all major soft drinks sold are spurious, while
10-30% of cosmetics and packaged food are
counterfeits, as per a slew of media reports.
• Fake gold and precious metals are worth Rs60
billion in India.

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 Media & The ` 6,000 crore Indian film industries loses ` 2,500 crore annually • Around 60% of films produced and 40% of music
Entertainment to piracy. produced is copied and distributed illegally in India.
• The ratio of legitimate to pirated music in India is
50:50 and while the ` 7.5 billion turnover of the
Indian music industry is through legitimate sales,
another ` 7 billion is generated from the pirated
market.
• Over 800 million pirated DVDs discs are consumed
in India annually and 1 million DVD players are
added every month in India

Auto Mobile Annual losses of up to $1 billion (` 4,500 crore) to the auto industry
due to counterfeiting (SIAM study,2009)
• According to a 2007 study conducted by the, fake
spares constitute 35 per cent of the replacement
market that is ` 165 billion domestic market; it is
worth ` 53 billion. This is likely to become an ` 63
billion industry by 2010 and will cross ` 140 billion
in 2015. (Automotive Components Manufacturers’
Association, 2007).

Software In absolute terms, the loss amounts to ` 121.5 billion (sixth annual • India has managed a 1% drop in software piracy
Global Software Piracy Study, 2008) from 69% to 68% in 2008.

th
Source : Financial Express, 20 April, 2010
www.centad.org/focus_76.asp
www.mobilepaper.timesofindia.co

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