NCERT Solutions for Class 12 Business Studies Business Finance and Marketing
Categories: NCERT Solutions Intermediate class
NCERT Solutions for Class 12 Business Studies Business Finance and Marketing
Q1: Explain the importance of consumer protection from the point of view of a business.
Answer: Consumer protection refers to consumer education regarding their rights and responsibilities and the redressal of their grievances and complaints. Consumer protection is important not just for consumers but also for business. The following points highlight the significance of consumer protection from the point of view of business.
(i) Long-Term Interest: With increasing competition and the drive to survive in the market, consumer satisfaction and interest is of prime importance for any business. While taking due care of the interest of the consumers, a business builds goodwill and reputation. A satisfied customer not only comes back and results in repeated sales for the firm, but also pulls new customers by spreading the good word. Thus, it is in longterm benefit of the business to protect consumers' interest.
(ii) Use of Resources: A business uses the resources of society for the production of various goods and services. Through the sale of these goods and services to the society, a business earns profits. Thus, it is their duty to supply such goods and services that adhere to the overall interest of the society.
(iii) Ethical Reasoning: Today moral values and ethics play an important role in business. It is the moral duty of every business to protect the interests of its customers. They must follow ethical and moral values and avoid any form of exploitation of the consumers such as unfair trade practices, adulteration, etc.
Q2: Explain the rights and responsibilities of a consumer.
Answer: The Consumer Protection Act enlists six rights for a consumer. The following are the rights of a consumer.
1. Right to Safety: Every consumer has the right to be safeguarded against those goods and services that are hazardous to life, health and property. For example, manufacturing defects in electrical appliances, cooking gas cylinders can be injurious. The consumer has the right to be protected against such products.
2. Right to be Informed: According to this, the consumer has the right to be informed of the quality, quantity, price, ingredients, weight, etc. of the goods and services. In India, it is legally mandatory for the manufactures to provide all such information on the package and the label of the goods. This enables the consumer to make a wise choice.
3. Right to Choose: A consumer has the right to choose from a variety of goods and services at competitive prices as per his wishes. That is, the consumer has the right to have access to a variety of products at fair and competitive price. Thus, the retailer or the supplier should offer a variety of products in terms of quality, brand, price, etc. They should not induce the consumers towards the purchase of a particular product or service.
4. Right to be Heard: In case of any grievance or dissatisfaction, a consumer has the right to file a complaint. A consumer can file a legal complaint and seek redressal against any form of exploitation in appropriate forums established by the government. Nowadays, many consumer organisations and associations also work in this direction.
Q3: Enumerate the various Acts passed by the Government of India which help in the protection of consumers' interests.
Answer: The following are some of the Acts passed by the Government of India for the protection of consumers' interests.
(i) The Consumer Protection Act, 1986: This Act provides for the protection of consumer interests against various forms of exploitation such as defective goods, deficiency in services, unfair trade practices, etc. Under the Act, a three-tier machinery comprising of District Forum, State Commissions and the National Commission, has been set up for the redressal of consumer grievances.
(ii) The Contract Act, 1982: This Act defines the conditions under which the promises in a contract are binding. In addition, the remedies available in case of breach of contract are also specified in the Act.
(iii) The Sale of Goods Act, 1930: The Act provides protection and relief to the consumers in case the goods purchased by them do not abide by the expressed or implied conditions and warranties.
(iv) The Agriculture Produce (Grading and Marking) Act, 1937: This Act defines grade standards for agricultural and livestock commodities. It provides the procedure for grading, packing and marking of agricultural products. The quality certification mark provided by the Act is called as AGMARK.
(v) The Prevention of Food Adulteration Act, 1954: This Act is formed to check the adulteration in food items and to maintain their purity.
(vi) The Standards of Weights and Measures Act, 1976: This Act safeguards the interest of the consumers against exploitative practices related to under-weight and under-measure of the goods.
(vii) The Essential Commodities Act, 1955: This Act provides for control in production, supply and distribution of essential goods. It also controls inflationary trends and ensures equality in distribution of these goods. It also checks anti-social activities such as hoarding and black marketing.
Q4: What are the various ways in which the objective of consumer protection can be achieved? Explain the role of consumer organisations and NGOs in this regard.
Answer: Consumer protection refers to the making the consumers aware and educated about their rights and responsibilities and help them in seeking redressal for their grievances and complaints. Consumer protection is of prime importance for both consumers and business. The following are some of the ways in which the objective of consumer protection can be achieved.
- Self-Administration by Business: The business firms should realise that it is in their long-term interest to protect the interest of their customers. They must increasingly work towards their satisfaction. They must realise that satisfied customers not only lead to repeated sales but also spread the good word about the company and thereby, pull new customers for the business. They must follow ethical values and avoid any form of exploitation of the consumers such as unfair trade practices, adulteration, etc. In this regard, nowadays many business firms have set up grievance cells and customer care centres to redress the complaints of their customers.
- Formation of Business Associations: In India, many business and commerce associations such as Federation of Indian Chambers of Commerce and industry (FICCI), Confederation of Indian Industries (CII) have been established that work towards consumer protection. They lay down guidelines for their members for the code of conduct for customer dealings.
- Consumer Education and Awareness: Consumer education and awareness is one of the important steps towards consumer protection. A consumer must be well aware and informed of his rights as defined under the Consumer Protection Act. He must also be aware of the reliefs available to him in case of any form of exploitation under the Act. In addition, he must also be educated about his responsibilities so as to safeguard himself against cheating and exploitation. A well-educated and informed consumer is able to make wise choices.
- Formation of Consumer Associations and Organisations: An increasing number of consumer organizations and associations such as the Consumer Unity and Trust Society, Consumer guidance Society of India, Consumer Protection Council, etc. must be formed. These organisations work actively towards educating the customers and making them aware of their rights and responsibilities. In addition, they encourage consumers to protests against any form of exploitation or cheating and also assists them in taking legal actions and seeking redressal.
Q5: What are the responsibilities of a consumer?
Answer: A consumer is also responsible for safeguarding his own interest and protecting himself from exploitation. The following are some of the responsibilities of a consumer.
(i) Awareness: A consumer should be well aware of the availability of various goods and services so that he can choose carefully and wisely.
(ii) Looking for Quality Marks: A consumer must always look for the quality certification marks before the purchase of goods such as ISI in case of electrical goods, AGMARK in case of agricultural goods, etc.
(iii) Asking for Cash Memo: A consumer should always ask for cash memo or bills for the goods and services purchased. The bill acts a proof of purchase and can be used for future references.
(iv) Reading Labels: Labels on goods provide information regarding price, weight, expiry date of the product. The labels must be read carefully.
(v) Honest Transactions: A consumer must always choose legal dealings and discourage illegal trade practices such as black marketing and hoarding.
Q6: Explain the redressal mechanism available to the consumers under the Consumer Protection Act.
Answer: Under the Consumer Protection Act, three-tier machinery has been set for the redressal of consumer grievances and complaints. The machinery works at the district level, State level and National level and are known as District Consumer Dispute Redressal Forum (or District Forum), State Consumer Dispute Redressal Commission (State Commission) and National Consumer Dispute Redressal Commission (National Commission) respectively. The following is a brief explanation of the machinery under the Consumer Protection Act.
- District Forum District Forum is set up in each district by the concerned State Government. It comprises of a president and two or more members, one of whom should be a woman. A consumer can to file a complaint in a District forum in case the value of goods in question, along with the compensation that is claimed is less than Rs 20 lakh. As the Forum receives the complaint, it refers it to the concerned party against whom the compliant is registered. After considering the tests and reports and on hearing both the concerned parties, the forum passes a judgement order. Moreover, in case the party filing the complaint is not satisfied with the order, an appeal can be filed in the State Commission within 30 days of passing the judgment.
- State Commission The State Government sets up State Commission for the redressal of consumer grievances. Alike District Forum, State Commission also comprises of a President and two or more members one of whom should be a woman. In State Commission, a complaint can to be filed by a consumer in case the value of goods /services in question along with the compensation claimed is more than Rs 20 lakh but is less than Rs 1crore. After receiving the complaint, the commission refers the complaint to the party against whom the compliant is registered. If necessary, the sample of the good are sent for testing in the laboratory. After considering the tests of the reports and on hearing the concerned parties, the commission passes an order. An appeal can be filed against the order of the Commission before the National commission within 30 days of judgement. 3. National Commission The National Commission is set up by the Central Government. It consists of a President and four or more members one of whom is a woman. A consumer can file a complaint in the National Commission in case the value of goods in question along with the compensation claimed is more than Rs 1 crore. After referring to the sample proofs and on hearing the concerned party, the commission passes an order. In case the aggrieved party is not satisfied with the order, an appeal can be filed before the Supreme Court.
Q7: Who can file a complaint in a consumer court?
Answer: For the redressal of the grievances of consumers, consumer courts and consumer forums have been established under the Consumer Protection Act. The following can file a complaint in a consumer court.
- Any consumer
- Any registered consumer association or organization
- The Central and State Government
- A consumer or a group of consumers on behalf of a number of consumers having same interest.
- A legal heir or a representative of the deceased consumer.
Q8: What kind of cases can be filed in a State Commission?
Answer: State Commissions have been established under the Consumer Protection Act for the redressal of various consumer grievances. It comprises a president and one or more members, one of whom is a woman. A consumer can file a complaint in the appropriate State Commission in case the value of the goods or the services in question is more than Rs 20 lakhs but is less than Rs 1crore. In addition, an aggrieved consumer not satisfied with the judgment at the lower forum (District Forum) can also appeal to the State Commission.