Vital role of consumer organisations in emerging markets

Mr Walter Vieira, Chairman of CERS, spoke at the World Marketing Summit (WMS) held in Tokyo on 24 September 2014 on how consumer organisations can help increase consumer orientation in emerging markets. He said that in such markets, level of consumer education was low. There is a large uneducated population that can be misinformed and misguided, a gullible semi educated section and even the educated fall prey to financial scams, he said.

While companies are expected to be consumer oriented and customer centric, they are not. This is where consumer organisations can, and do, play a role in bringing about a balance and fairness to the marketplace, Mr Vieira stressed. It would be ideal if corporates and the government look upon consumer organisations, not as adversaries but as partners in their mission to serve the consumer effectively and fairly giving him what he needs or wants, at the right price, place and with honest promotion.

However, there are many hurdles to be overcome and structural changes needed if consumers are to be protected in emerging markets, he said. There is need for an effective organisation structure to deal with consumer complaints and an institution like Federal Trade Commission (FTC) in the US which takes quick action and imposes deterrent penalties. Also, consumer organisations need more funds because consumers expect free service from them, financial support from government or Consumers International is limited and because they are reluctant to accept financial support from corporates owing to possible conflict of interest.

CERS demands 5% reduction in electricity duty

CERS has written to the Gujarat government demanding reduction in electricity duty by 5% for residential and commercial consumers of Gujarat. According to details CERS gathered under the Right to Information (RTI) Act, the state government collected Rs. 4,693 crore as electricity duty in 2013-14.

The state government provides subsidy of Rs. 1,100 crore per year to distribution companies (DISCOMs) to provide cheaper power (as low as 60 paise per unit) to farmers of Gujarat. Apart from this, it pays Rs. 2,580 crore to DISCOMs as Fuel Price & Power Purchase Adjustment (FPPPA) cost making the total subsidy amount Rs. 3,680 crore. Hence, it still has surplus of Rs. 1, 013 crore. That is why CERS has demanded reduction in electricity duty. It is to be noted that the electricity duty levied by the Gujarat government is the highest in the country, followed by Maharashtra.

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