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Mechanism of consumer redressal in India

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Consumer protection in India has a rich history with its desirability being felt through ages. Consumer movements in India have evolved over many centuries and were finally institutionalised in 1986 with the enactment of the Consumer Protection Act, 1986. The first and foremost responsibility of the government is to ensure smooth and easy redressal of consumer grievance. If the government is futile in rectifying the atrocities of the consumers it results in consumers moving to courts and forums for their demands. To study the consumer movements in India it is important to look at the mechanism of consumer redressal present in the country which is briefly discussed in the first section of this article.

Consumers are the backbone of the economy of every country and it is the government’s job to keep the producers in check so that the consumers don’t suffer. The consumer protection laws in India are still a little vague and complex that makes them ineffective. To make the laws more effective the consumers should be made aware of their rights and obligations because the major hindrance in effectiveness of consumer protection is consumers’ obliviousness towards their rights.

Consumption has always been an integral part of any society. With the advent of hyper industrialization, there are bound to be some shortcomings that the producers have to address. To effectively make their damage good, people have to mobilize together and speak as a community.

The Consumer Protection Act, 1986 was enacted a benevolent legislation that states the rights of consumers and address the consumer redressal mechanism. It has enabled ordinary consumers to opt for speedy and less expensive redressal of their complaints.[1] Although there has been many legislations protecting consumers before independence like the Sale of Goods Act, 1930, Contract Act, 1872, this is the first time that specific attention has been given to general consumers.

The National Consumer Disputes Redressal Commission (NCDRC) was set up under Consumer Protection Act, 1986. It’s a quasi-judicial body with a President and eleven members. It has 3 types of jurisdiction i.e. Original, Appellate and revisional.[2] Under the Consumer Protection Act, NCDRC is entitled to entertain cases from Central and State governments because they qualify as “complainant” under section 2(b)(iii) of the Act. The complaints are processed under the supervision of Registrar by officers of NCDRC before placing them before the Hon’ble benches for hearing. The president is the head of the body and can distribute judges at each bench according to his discretion. Under section 23 of the Consumer Protection Act the complainant can file a review petition before the Hon’ble Supreme Court of India. The discharge of functions is governed under Consumer Protection Rules, 2017. Dept. Of Consumer Affairs allocates budget to NCDRC and the same is reflected in the Demand for Grants of Dept. Of Consumer Affairs. All the information regarding the cases, commission, statutes and workings of the Courts is available on NCDRC’s website in accordance with the Right to Information Act. All the information regarding National Commission is supplied within 30 days.

The NCDRC has the authority to entertain cases where the claimed compensation is above one crore and any appeal against state commission. It can also pass orders against the cases judged by any state commission where it feels that the proper procedure is not followed or where it feels that the court has exercised a power ultra vires.

Role Of NGOs Towards Consumer Protection

Consumer protection is of superlative importance in India as the population if India is ever increasing. They demand variety of goods and services every day, and there is an ever-increasing demand. Here we can see the number of cases filled by the consumers in the year 2017-18. This drastic improvement in the filing of the cases is because the awareness which is being spread through various forums, like advertisements, booklets, rallies, social media, and various other platforms. Here we take a brief look at what consumer protection entails in India.

NGOs have always been an integral part of the consumer movements in India and all over the world. They have paved the path for generating the awareness towards consumer rights violations as well as instilled the sense of justice in the people for claiming compensation for the same. The role of NGOs or consumer organizations is of paramount importance because, a general consumer is not always aware of his rights and even if they are, they don’t have enough means or understanding of the working of the various procedures laid by the law. The Consumer Protection Act 1986 has made it very opportune for the consumers to file cases and claim damages but this is mostly unknown to the actual consumer population, hence keeping them in the dark. NGOs come into play here. There are various NGO throughout India who work toward consumer protection. Some of the famous NGOs are VOICE, Common Cause, Consumer Awareness, Protection and Education Council of Karnataka, Consumer Guidance Society India.The need for NGO and self-regulatory authorities in the implementation of consumer rights is of supreme standing. They are needed because:

Awareness

One of the main reasons for the lack of awareness regarding consumer protection is the lack of education and vigilance. Education facilitates awareness. Due to the lack of education the consumers suffer silently without claiming for the implementation of their rights. The graph of the survey undertaken by CUTS International, depicts the lack of awareness among the consumer population.[3]

A survey was done by CUTS International to test the awareness of the Indian consumer, followings were the findings:[4]

  • Awareness regarding the various government schemes.
  • 20% were aware about the consumer protection act.
  • More than 50% were not even aware of the “Jago Grahak Jago” campaign.
  • 40% were aware about the food safety act.
  • TARI was recognized by 27% of the people, Electricity Regulatory Commission was recognized by 26%.

Urban dwellers are more aware about their rights, hence NGOs should work at the ground level with the villagers to spread awareness regarding their rights.

Research:

For representation of their grievances efficiently in the consumer court, consumers need to have the sufficient knowledge and skill for conducting the research. Many if the consumer grievances can be resolved with various surveys and studies. Now certain organization is researching the lead content in the children toys. These types of studies can only be conducted with proper research and skill. This is a skill which needs practice to be developed. Hence with the help of NGOs consumers can file and contest cases resourcefully. a consumer cannot always conduct various lab tests or advanced research which needs capital as well as the knowledge, here the NGOs can do this and help pace the implementation the consumer rights. In the graph below, it represents the awareness of the consumers regarding various laws in place. Given that the consumers are not well acquainted with any of them comprehensively, the need for NGOs to help them regarding research is imperative. 

Counselling:

The consumers are not always aware of the laws designed for them; with NGOs the legal aid becomes more accessible to the general public. NGOs can find and appoint people who are well conversant with the laws of the land and can represent and help them file cases. Additional to this, they observe the implementation of laws by the local authorities which were passed by the legislators. They can file public interest litigation cases and work towards representing the common sentiment of the people in the court.

Publication and media:

The consumer movement gained traction due to the various awareness drives organized by the NGOs. They pressurize the government on spreading awareness. We see advertisements like “Jago Grahak Jago” on television and we see numerous booklets, reports etcetera. Through these the consumers can communicate their grievances and raise their voice against the mal practices. In today’s digital and tech savvy world they operate blogs and online portals to keep in touch of the ground level reports and encourage the consumers to use this means to contact them for help. They also conduct various public meeting to advocate for consumerism and conduct open negotiations where the consumer community can meet and discuss their concerns. Some sources state that the consumers are more likely to be educated about their consumer rights through the televisions.[5]

Unanimous representation of the NGOs

There are many NGOs in across India. If all the NGOs will unanimously come under a same banner and take the consumer movement forward, then the movement will be more effective than it is today due to the region-specific approach of the NGOs. Along with addressing the problems of the people at the ground level, they should come together and file PILs which will gain traction and impose pressure on the government to take swift action.

PILs filled by the NGOs’:

The most efficient way to make the voice of the consumer heard is through the means of law. There are many cases filled daily, here we will discuss some of the landmark judgments of the PILs filled by the NGOs.

Afcons Infrastructure Ans Ors.v. Cherian Verkay Construction And Ors.– In this case, the court held that arbitration agreement is mandatory for dispute adjudication. At any point in the suit, the court cannot force the parties to go for necessary adjudication. The consent of both the parties is important for arbitration under section 89 of CPC.

Indian Medical Association vs V.P. Shantha & Ors.– In this case, it was held that doctors will come under the purview of Consumer Protection Act even though they are regulated by Indian Medical Association. So, medical negligence was made inexcusable.

Lucknow development authority v. MK Gupta – In this case, the Supreme Court held that all the functions rendered to consumers come under the definition of Consumer Protection Act. Even if the service is provided by statutory authorities the consumers are entitled to compensation.

Role of the government

The beginning of the consumer movement in India dates back to 1960s and the 1970s when there were rampant practices of unprincipled and unfair trade practices like food shortages, black marketing, hoarding, adulteration of food materials and edible oil. All of it led to a consumer movement being propagated, till then the limited consumer organizations were just involved in writing articles and booklets. There was no legal system in place to hold the seller accountable and the maxim “caveat venditor” has no legal standing. It was always the responsibility of the consumer to be aware of the product or service they are subscribing to. The consumer movement around the world took acceleration and India was behind. Due to the pressure and active pursuing of the NGOs and self-regulating authorities a monumental step was taken by the Indian government and it passed the Consumer Protection Act 1986 in the 1986 Session of the Parliament. This legislation became a milestone in the societal and commercial legislations in the country. In addition to this many laws were legislated to cater to the interests of implementing the consumer rights, some include Standards of Weights and Measures Act, MRTP Act, Essential Commodities Act and Prevention of Food Adulteration Act. But these laws were neither penal nor preemptive in approach and did not make availableprompt trials and disposalof the grievances of the pained consumers.

National consumer chair:

For the first time in history the Ministry of Consumer Affairs of India, Food and Public Distribution, Department of Consumer Affairs Government of India has set up a Consumer chair which is being headed by Prof. Ashok Patil.[6] He will be heading the chair for 3 years. This step, taken by the central government, will be monumental for the prolongation of the Consumer Movement in India. This chair has been set up to provide the consumer an efficient mode to access justice which they are entitled to.

Jago Grahak Jago:

This was an initiative started by the government of India in the year 1983.[7]This was an initiative to spread awareness among the consumers regarding various goods and services they use in their day to day life. Through this portal consumers can register complains. They also showcase numerous advertisements on the television to make the consumers aware of the unfair trade practices. The Jago Grahak Jago campaign was known to 51% of the population, due to its use of media to communicate the various remedies under the Consumer Protection Act.

National consumer helpline

13 years back, on March 2005, as a part of the “JagoGrahakJago” campaign the Department of Consumer Affairs started a consumer helpline to provide assistance to the consumers. This is to make the implementation of COPRA more efficient. The consumers can seek help regarding their grievances by just making a call to the National Consumer Helpline.

Even after much efforts by the self-regulatory authorities and the government intervention the responses received is just 21%. Hence, in India we need more efforts to spread vigilance regarding the consumer rights and their violation and the mode which need to be taken to address the concerns of the consumers. 

This is the breakdown of the areas of various consumer grievances.[8] Most complains registered by the NCH was for the E-commerce sector, 19%. Let’s look at it in detail.

Working Towards Reducing Delays And Improving Consumer Satisfaction:

Among the many items on the agenda of the government, it should also give substantial importance in reducing delays in the Consumer Court. Due to the delays the willingness of the consumers to file complains is deteriorating.

Working towards improving consumer satisfaction

The below graphs depicts the level of consumer satisfaction with the griveance redressal mechanisms, and reflects on their experience in the Consumer forum.[9] A huge proportionate of people are not completely satisfied with the mechanism at place, which gives the government sufficient reason to improve it.

E-commerce grievances

Now a days the grievances regarding the online consumer market is on a high. This is because the 21st century is pacing towards the digital age. The below graph specifies the increase in the consumer complains in the year 2015-16 and 2016-17.[10] The government can set up another helpline which will deal with these cases unambiguously.

We have a case which was filled by the Telecom Watchdog against the online giants Amazon and Flipkart. The approved that these e-commerce giants were violating the Foreign Direct Investment norms. They circumvented the FDI norms by steering popular goods at much discounted rates through proxy ‘controlled sellers’ and this cause the pushing out of the small businesses off the market. The New Delhi High Court has recently issued a notice to the two companies.

Cross National Comparison Of Consumer Attitudes

Different countries have different mechanisms in place to deal with consumer movements. While the more developed economies have an established institution regarding consumer protection, developing countries like India are still in the nascent stages to develop their consumer forums. In this section, we’ll study this same distinction and how it came into being.

The paramount step in ensuring that the rights of the consumers are protected is for the consumers to know what their rights are and how they can be enforced. In this regard, the dept. Of Education, Pennsylvania, U.S. had published a handbook titled ‘Consumer Education Organisation and Implementation’. In the context of the said Consumer Awareness, a very little literature is provided in India.[11] This difference is awareness is of prime importance in regards to improving the consumer culture in India.

Another aspect of difference between U.S. and India is the enforcement of the statutes regarding Consumer Protection. Where in the U.S. the Federal Trade Commission’s sub-unit, Bureau of Consumer Protection, is using latest technology to easily facilitate consumer protection India is still left behind in addressing the complaints. The West has developed a highly developed Artificial Intelligence systems like Robocalls and automated answering protocols that help the consumer file a complaint easily and effectively. This again ties back to the issue of the awareness of citizens about consumer rights.

Disposition of cases is another factor that plays an important role in consumer protection. Speedy disposal of cases is a must in cases of consumer protection so that the consumer doesn’t suffer. While in the United States a lot of stress is placed upon the speedy disposal of cases, in India unfortunately the process is delayed by numerous complexities such as lab tests, unavailability of dates, etc. While the specified period of disposal is three to five months in the statutes, the dates of two subsequent hearings is this much apart in India.

Consumer protection in US focuses on economics of information.  Under right information, competition would force sellers to produce high quality products which meet the safety standards in all the aspects. In India, because the right information about the safety standards is still vague and complex, most of the times there is a conflict between different laws.[12] An instance of dissemination of information is regarding an automobile’s mileage. The manufactures have to disclose the actual mileage that an automobile can give and not the mileage that the automobile would grant in the ideal condition.

Right to choice is another matter of concern for Indian consumer market. Right of choice means the availability of products at the competitive and fair price at all the places. The competitive culture of the west has developed over the centuries while in India it is still in its nascent stages. By 1969 comparative analysis of magazines had become the norm in the west. Consumer reports held a lot of stake in right to choice with led the way in the sales of magazines. In India this revolution is being brought by online platforms where the prices are constantly scrutinized and kept in check.

To maintain the pressure on the government it is important to have some consumer organisations. While there are more than 100000 registered consumer organisations in the US[13], there are about 8000 consumer organisations in India. This shows that India is far behind U.S. in terms of consumer redressal. Because of the gap between the consumer and the redressal system, most of the consumer protection doesn’t get filed. While the consumer organisations in US are making sure that all the aggrieved get justice, for the limited number of organisations in India it is difficult to get all the consumers under the spectrum of consumer protection.

Consumer forums have not been successful in tackling the increasing consumer disputes. More than 4.5 lakh cases are pending in courts that suggests the miserable condition of consumer redressal in India. To tackle this issue, the govt. have to take immediate steps such as keeping vigil on availability of judges, contribute to R&D so that lab tests doesn’t waste time of the courts, establishing more benches in each part of state throughout the country. There have been many landmark cases under the Consumer Protection Act some of which are:

  • Chief Administrator, H.U.D.A. & Anr. v. Shakuntla Devi : In this case the Supreme Court held that for entitlement to compensation it’s necessary to prove damage.
  • Charan Singh v. Healing Touch Hospital and Others: The supreme court held that damages depend on facts of each case. No rigid rule can be set for universal application.
  • Om Prakash v. Reliance General Insurance : The supreme court held that insurance company cannot reject liability on technical grounds.
  • Manjeet Singh v. National Insurance Company Ltd. & Anr.: It was held that insurance company is liable to accept liability for hijacked vehicle.
  • Shri Rajendra Agarwal v. Shoppers Stop Limited: The CCI held that individual consumer grievances cannot be treated as competition concern.
  • New India Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd.: It was held that the respondent party have to reply within 15 days.
  • Dr. M. Kochar vs Ispita Seal: NCDRC said that No cure is not medical negligence.
  • M/S Emaar MGF Land Limited & Anr. v. Aftab Singh: Supreme court held that arbitration clause does not restrict consumer from filing a complaint with consumer forum.
  • Karnataka Power Transmission Corporation v. Ashok Iron Works Private Limited: Supreme Court held that supply of electricity is not considered ‘sale’ under the Act.
  • State of U.P. and Ors. v. All U.P. Consumer Protection Bar Association: Supreme court directed all the states to draft rules and regulations for better implementation of the Consumer Protection Act.

Consumer Movements in different areas

Telecom

Usually, consumer protection in Telecom sector is imposed by licensing arrangements or telecom act. The main provisions of the act aim at improving choices for consumers, to reduce prices, achieve better quality and avoid exploitation. In JK Mittal v Union of India the Delhi high court held that the respondent is not a telegraph authority under the telegraph act, 1885. The Supreme Court had given a broad interpretation in which it said that the consumer protection act is in addition and not in derogation to any law for the time being in force. The high court of Delhi held the suit maintainable in consumer forums. Through this case it was established that the suits against private telecom companies are maintainable in consumer forums.[14]

Health Care

Health care is one of the most controversial sectors where consumer rights have to be protected. In the Consumer Protection Act, 2019 the government of India has removed the word ‘healthcare’ which was added in the draft bill. There was a huge consumer movement about the removal of word healthcare because medical negligence is an integral part of consumerism in India and by removing the word it was being interpreted that the liability of doctors is diminished, but as was expounded in the Indian Medical Association vs V.P. Shantha & Ors case, the word includes medical negligence in the new definition of services as well.[15]

Food Industry

Food industry is the 5th largest industry in India. The Food Safety and Standards Authority of India has started the Food Smart campaign to raise awareness among consumers about food safety. The landmark case of Nestle Noodles, Maggie, was a testament to right to knowledge and the right to healthy food. In the case it was reported that the noodles were not harmful to health and the lead content was well within limits.[16] This case serves as an instance where consumer movements are most effective and provide the society a perspective of the justice for consumers.

Conclusion

Through the course of this article we have seen how Consumer Movements have evolved from being just conceptualized to being institutionalized. Consumer Protection is a necessity in a consumer dominated country like India. Consumer Movements go a long way in tacking the problem of consumer protection. When the people of a country stand up against a lazy government only then can the voice of consumers be strengthened.

This article focused on the mechanism of consumer redressal in our country. Different agencies have different roles to play and the government has the duty to duly resolve all the disputes. Studying the consumer redressal mechanism in other countries we saw where we lag behind. Although our government has taken various measures to resolve Consumer Disputes, there is still a long way to go in case of consumer protection.

The role of NGOs in eradicating a social evil is of eminent importance and this is the case with consumer protection also. A lot of NGOs are striving towards providing justice to consumers. To make the work of NGOs more impactful the government has the duty to provide them with necessary funds to do so.

While the government is doing its bit, it is equally necessary for the consumers to be aware of their rights and act on them. The government can’t do anything if the consumers do not take active steps to control the problem of Consumer exploitation. Hence, it is the moral duty of both the government and the consumer to act towards Consumer Protection.


[1] National Consumer Disputes Redressal Commission, ‘History’ (NCDRC) <http://ncdrc.nic.in/history.html> accessed 29 November 2019.

[2] National Consumer Disputes Redressal Commission, ‘Details Under Right To Information Act-2005’ (NCDRC) <http://ncdrc.nic.in/rti.html> accessed 29 November 2019.

[3]CUTS International, ‘Report: State of Consumer Affairs India’(CUTS International, 2012) <http://lms.nls.ac.in/pluginfile.php/1146/mod_page/content/8/Report_State_of_the_Indian_Consumer-2012.pdf>accessed 28 November 2019.

[4]CUTS International, ‘Report: State of Consumer Affairs India’(CUTS International, 2012) <http://lms.nls.ac.in/pluginfile.php/1146/mod_page/content/8/Report_State_of_the_Indian_Consumer-2012.pdf>accessed 28 November 2019.

[5] CUTS International, ‘Report: State of Consumer Affairs India’(CUTS International, 2012) <http://lms.nls.ac.in/pluginfile.php/1146/mod_page/content/8/Report_State_of_the_Indian_Consumer-2012.pdf>accessed 28 November 2019.

[6]Apurva Singh,‘Prof. Ashok R Patil, Professor of Law, NLSIU nominated as a member of the Central Consumer Protection Council’ (SSC Online, 19 November 2018)

<https://www.scconline.com/blog/post/2018/11/19/prof-ashok-r-patil-professor-of-law-nlsiu-nominated-as-a-member-of-the-central-consumer-protection-council/>accessed 27 November 2019

[7]Government of India, ‘Jago Grahak Jago complains portal’

<http://www.jagograhakjago.com/register-complaint/>accessed 27 November 2019

[8]Government of India, ‘Consumer helpline’<https://consumerhelpline.gov.in/nch.php>accessed 29 November 2019

[9]CUTS International, ‘Report: State of Consumer Affairs India’(CUTS International, 2012) <http://lms.nls.ac.in/pluginfile.php/1146/mod_page/content/8/Report_State_of_the_Indian_Consumer-2012.pdf>accessed 28 November 2019.

[10]Government of India, ‘Consumer helpline’<https://consumerhelpline.gov.in/nch.php>accessed 29 November 2019

[11] Sanjay Kaptan, ‘Consumer Movement in India: Issues and Problems’ (Sarup & Sons, 1st edn, 2013) accessed 30 November 2019.

[12]Journal of Institutional and Theoretical Economics, ‘Regulation: Analysis and Experience in West Germany and the U.S.A.: A Symposium’ (October 1983), pp. 527-544 accessed 26 November 2019.

[13] Yakoob C., ‘A study on the impact of the consumer protection act 1986 on consumer movement, with special reference to northern districts of Kerala’ (Department of Commerce and Management Studies , University of Calicut, 1998) accessed 25 November 2019.

[14] Ashok R. Patil, ‘Consumer Protection Law’ (Annual Survey of Indian Law, The Indian Law Institute, 2016) pp. 319-346 accessed 24 November 2019.

[15]Dipak Dash, ‘Consumer bill draft removes healthcare from Services’ (Times of India, 2 June 2019) <https://timesofindia.indiatimes.com/india/consumer-bill-draft-removes-healthcare-from-services/articleshow/69935129.cms> accessed 29 November 2019.

[16] Samanwaya Rautray, ‘Maggi Controversy: SC revives govt’s case against Nestle India in NCDRC’ (Economic Times, 4 January 2019) <https://economictimes.indiatimes.com/industry/cons-products/food/supreme-court-revives-governments-case-in-ncdrc-against-nestle-india/articleshow/67363564.cms> accessed 24 November 2019.

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Iran has an integral role to play in Russian-South Asian connectivity

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Iran is geostrategically positioned to play an integral role in Russian-South Asian connectivity. President Putin told the Valdai Club during its annual meeting in October 2019 that “there is one more prospective route, the Arctic – Siberia – Asia.

The idea is to connect ports along the Northern Sea Route with ports of the Pacific and Indian oceans via roads in East Siberia and central Eurasia.” This vision, which forms a crucial part of his country’s “Greater Eurasian Partnership”, can be achieved through the official North-South Transport Corridor (NSTC) and tentative W-CPEC+ projects that transit through the Islamic Republic of Iran.

The first one refers to the creation of a new trade route from Russia to India through Azerbaijan and Iran, while the second concerns the likely expansion of the China-Pakistan Economic Corridor (CPEC, the flagship project of China’s Belt & Road Initiative [BRI]) westward through Iran and largely parallel to the NSTC. W-CPEC+ can also continue towards Turkey and onward to the EU, but that branch is beyond the scope of the present analysis. The NSTC’s terminal port is the Indian-backed Chabahar, but delays in fully developing its infrastructure might lead to Bandar Abbas being used as a backup in the interim.

CPEC’s Chinese-backed terminal port of Gwadar is in close proximity to Chabahar, thus presenting the opportunity of eventually pairing the two as sister cities, especially in the event that rumored negotiations between China and Iran result in upwards of several hundred billion dollars worth of investments like some have previously reported. The combination of Russian, Indian, and Chinese infrastructure investments in Iran would greatly improve the country’s regional economic competitiveness and enable it to fulfill its geostrategic destiny of facilitating connectivity between Russia and South Asia.

What’s most intriguing about this ambitious vision is that Iran is proving to the rest of the world that it isn’t “isolated” like the U.S. and its closest allies thought that it would be as a result of their policy of so-called “maximum pressure” against it in recent years. While it’s true that India has somewhat stepped away from its previously strategic cooperation with Iran out of fear that it’ll be punished by “secondary sanctions” if it continued its pragmatic partnership with the Islamic Republic, it’s worthwhile mentioning that Chabahar curiously secured a U.S. sanctions waiver.

While the American intent behind that decision is unclear, it might have been predicated on the belief that the Iranian-facilitated expansion of Indian influence into Central Asia via Chabahar might help to “balance” Chinese influence in the region. It could also have simply been a small but symbolic “concession” to India in order not to scare it away from supporting the U.S. anti-Chinese containment strategy. It’s difficult to tell what the real motive was since American-Indian relations are currently complicated by Washington’s latest sanctions threats against New Delhi in response to its decision to purchase Russia’s S-400 air defense systems.

Nevertheless, even in the worst-case scenario that Indian investment and infrastructural support for Iran can’t be taken for granted in the coming future, that still doesn’t offset the country’s geostrategic plans. Russia could still use the NSTC to connect with W-CPEC and ultimately the over 200+ million Pakistani marketplaces. In theory, Russian companies in Pakistan could also re-export their home country’s NSTC-imported goods to neighboring India, thereby representing a pragmatic workaround to New Delhi’s potential self-interested distancing from that project which could also provide additional much-needed tax revenue for Islamabad.

Iran must therefore do its utmost to ensure Russia’s continued interest in the NSTC regardless of India’s approach to the project. Reconceptualizing the NSTC from its original Russian-Indian connectivity purpose to the much broader one of Russian-South Asian connectivity could help guarantee Moscow’s support. In parallel with that, Tehran would do well to court Beijing’s investments along W-CPEC+’s two branch corridors to Azerbaijan/Russia and Turkey/EU. Any success on any of these fronts, let alone three of them, would advance Iran’s regional interests by solidifying its integral geo-economic role in 21st-century Eurasia.

From our partner Tehran Times

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The phenomenon of land grabbing by multinationals

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Since 2012 the United Nations has adopted voluntary guidelines for land and forest management to combat land grabbing. But only a few people know about the guidelines, which aim to protect small farmers particularly in Third World countries.

When multinational investors buy up fields for their huge plantations, the residents lose their livelihood and means of support and will soon only be sleeping in their villages. If they are lucky, they might find work with relatives in another village. Many also try their luck in the city, but poverty and unemployment are high. What remains are depopulated villages and the huge palm oil plantations that have devoured farmland. People can no longer go there to hunt and grow plants or get firewood. The land no longer belongs to them!

Land grabbingis the process whereby mostly foreign investors deprive local farmers or fishermen of their fields, lakes and rivers. Although it has been widely used throughout history, land grabbing – as used in the 21st century – mainly refers to large-scale land acquisitions following the global food price crisis of 2007-2008.

From 2000 until 2019 one hundred million hectares of land have been sold or leased to foreign investors and the list of the most affected countries can be found here below:

Such investment may also make sense for the development of a country, but it must not deprive people of their rights: local people are starving while food is being produced and turned into biofuels for export right before their eyes.

In 2012, after three years of discussion, the UN created an instrument to prevent such land grabbing: the VGGTs (Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security:

Detailed minimum standards for investment are established, e.g. the participation of affected people or how to safeguard the rights of indigenous peoples and prevent corruption. Formally, the document provides a significant contribution to all people fighting for their rights.

The document, however, is quite cryptic. The guidelines should be simplified and explained. Only in this way can activists, but also farmers and fishermen, become aware of their rights.

Others doubt that much can be achieved through these guidelines because they are voluntary. After all, the UN has little or no say in the matter and can do no more than that. If governments implemented them, they would apply them as they will.

In Bolivia, for example, there are already laws that are supposed to prevent land grabbing. In the Amazon, however, Brazilian and Argentinian companies are buying up forests to grow soya and sugar cane, often with the approval and agreement of corrupt government officials. Further guidelines would probably be of little use.

At most, activists already use the guidelines to lobby their governments. Together with other environmental and human rights activists, they set up networks: through local radio stations and village meetings, they inform people of the fact that they right to their land.

Nevertheless, in many countries in Africa and elsewhere, there is a lack of documentation proving land ownership. Originally, tribal leaders vocally distributed rights of use. But today’s leaders are manipulated to pressure villagers to sell their land.

The biggest investors are Indians and Europeans: they are buying up the land to grow sugar cane and palm oil plantations. This phenomenon has been going on since 2008: at that time – as noted above – the world food crisis drove up food prices and foreign investors, but also governments, started to invest in food and biofuels.

Investment inland, which has been regarded as safe since the well-known financial crisis, must also be taken into account. Recently Chinese companies have also been buying up thousands of hectares of land.

In some parts of Africa, only about 6% of land is cultivated for food purposes, while on the remaining areas there are palm oil plantations. Once the plantations grow two or three metres high, they have a devastating effect on monocultures that rely on biodiversity, because of the huge areas they occupy. There is also environmental pollution due to fertilisers: in a village, near a plantation run by a Luxembourg company, many people have suffered from diarrhoea and some elderly villagers even died.

Consequently, the implementation of the VGGTs must be made binding as soon as possible. But with an organisation like the United Nations, how could this happen?

It is not only the indigenous peoples or the local groups of small farmers that are being deprived of everything. The common land used is also being lost, as well as many ecosystems that are still intact: wetlands are being drained, forests cleared and savannas turned into agricultural deserts. New landowners fence off their areas and deny access to the original owners. In practice, this is the 21st century equivalent of the containment of monastery land in Europe that began in the Middle Ages.

The vast majority of contracts are concentrated in poorer countries with weak institutions and land rights, where many people are starving. There, investors compete with local farmers. The argument to which the advocates of land grabbing hold -i.e. that it is mainly uncultivated land that needs to be reclaimed – is refuted. On the contrary, investors prefer well-developed and cultivated areas that promise high returns. However, they do not improve the supply of local population.

Foreign agricultural enterprises prefer to develop the so-called flexible crops, i.e. plants such as the aforementioned oil palm, soya and sugar cane, which, depending on the market situation, can be sold as biofuel or food.

But there is more! If company X of State Y buys food/fuel producing areas, it is the company that sells to its State Y and not the host State Z that, instead, assigns its future profits derived from international State-to-State trade to the aforementioned multinational or state-owned company of State Y.

Furthermore, there is almost no evidence of land investment creating jobs, as most projects were export-oriented. The British aid organisation Oxfam confirms that many land acquisitions took place in areas where food was being grown for the local population. Since local smallholders are generally weak and poorly educated, they can hardly defend themselves against the grabbing of the land they use. Government officials sell or lease it, often without even paying compensation.

Land grabbing is also present in ‘passive’ Europe. Russia, Ukraine, Romania, Lithuania and Bulgaria are affected, but also the territories of Eastern Germany. Funds and agricultural enterprises from “active” and democratic Europe, i.e. the West, and the Arab Gulf States are the main investors.

We might think that the governments of the affected countries would have the duty to protect their own people from such expropriations. Quite the reverse. They often support land grabbing. Obviously, corruption is often involved. In many countries, however, the agricultural sector has been criminally neglected in the past and multinationals are taking advantage of this under the pretext of remedying this situation.

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Economy

No let-up in Indian farmers’ protest due to subconscious fear of “crony capitalism”

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The writer has analysed why the farmers `now or never’ protest has persisted despite heavy odds. He is of the view that the farmers have the subconscious fear that the “crony capitalism” would eliminate traditional markets, abolish market support price and grab their landholdings. Already the farmers have been committing suicides owing to debt burden, poor monthly income (Rs. 1666 a month) and so on.”Crony capitalism” implies nexus between government and businesses that thrives on sweetheart deals, licences and permits eked through tweaking rules and regulations.

Stalemate between the government and the farmers’ unions is unchanged despite 11 rounds of talks. The farmers view the new farm laws as a ploy to dispossess them of their land holdings and give a free hand to tycoons to grab farmers’ holdings, though small.

Protesters allege the new laws were framed in secret understanding with tycoons. The farmers have a reason to abhor the rich businesses. According to an  a  January 2020 Oxfam India’s richest one  per cent hold over four times the wealth of 953 million people who make up the poorest 70 per cent  of the country’s population. India’s top nine billionaires’ Inc one is equivalent to wealth of the bottom 50 per cent of the population. The opposition has accused the government of “crony capitalism’.

Government has tried every tactic in its tool- kit to becloud the movement (sponsored y separatist Sikhs, desecrated Republic Day by hoisting religious flags at the Red ford, and so on). The government even shrugged off the protest by calling it miniscule and unrepresentative of 16.6 million farmers and 131,000 traders registered until May 2020. The government claims that it has planned to build 22,000 additional mandis (markets) 2021-22 in addition to already-available over 1,000 mandis.

Unruffled by government’s arguments, the opposition continues to accuse the government of being “suit-boot ki sarkar” and an ardent supporter of “crony capitalism” (Ambani and Adani). Modi did many favours to the duo. For instance they were facilitated to join hands with foreign companies to set up defence-equipment projects in India. BJP-ruled state governments facilitated the operation of mines in collaboration with the Ambani group  just years after the Supreme Court had cancelled the allotment of 214 coal blocks for captive mining (MS Nileema, `Coalgate 2.0’, The Caravan March 1, 2018). Modi used Adani’s aircraft in March, April and May 2014 for election campaigning across the country.

“Crony capitalism” is well defined in the English oxford Living Dictionaries, Cambridge and Merriam –Webster. Merriam-Webster defines “crony capitalism” as “an economic system in which individuals and businesses with political connections and influence are favored (as through tax breaks, grants, and other forms of government assistance) in ways seen as suppressing open competition in a free market

If there’s one”.

Cambridge dictionary defines the term as “ an economic system in which family members and friends of government officials and business leaders are given unfair advantages in the form of jobs, loans, etc.:government-owned firms engaged in crony capitalism”.

A common point in all the definitions is undue favours (sweetheart contracts, licences, etc) to select businesses. It is worse than nepotism as the nepotism has a limited scope and life cycle. But, “crony capitalism” becomes institutionalized.

Modi earned the title “suit-boot ki sarkar” when a non-resident Indian, Rameshkumar Bhikabhai virani gifted him a Rs. 10 lac suit. To save his face, Modi later auctioned the suit on February 20, 2015. The suit fetched price of Rs, 4, 31, 31311 or nearly four hundred times the original price. Modi donated the proceeds of auction to a fund meant for cleaning the River Ganges. `It was subsequently alleged that the Surat-based trader Laljibhai Patel who bought the suit had been favoured by being allotted government land for building  a private sports club (BJP returns ‘favour’, Modi suit buyer to get back land, Tribune June21, 2015).

Miffed by opposition’s vitriolic opposition, Ambani’s $174 billion conglomerate Reliance Industries Ltd. Categorically denied collusion with Modi’s government earlier this month. Reliance clarified that it had never done any contract farming or acquired farm land, and harboured no plans to do so in future. It also vowed to ensure its suppliers will pay government-mandated minimum prices to farmers. The Adani Group also had clarified last month that it did not buy food grains from farmers or influence their prices.

Modi-Ambani-Adani nexus

Like Modi, both Adani and Ambani hail from the western Indian state of Gujarat, just, who served as the state’s chief for over a decade. Both the tycoons are reputed to be Modi’s henchmen. Their industry quickly aligns its business strategies to Modi’s nation-building initiatives. For instance, Adani created a rival regional industry lobby and helped kick off a biannual global investment summit in Gujarat in 2003 that boosted Modi’s pro-business credentials. During 2020, Ambani raised record US$27 billion in equity investments for his technology and retail businesses from investors including Google and Face book Inc. He wants to convert these units into a powerful local e-commerce rival to Amazon.com Inc. and Wal-Mart Inc. The Adani group, which humbly started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector port operator and power generator.

Parallel with the USA

Ambani and Adani are like America’s Rockefellers and Vanderbilt’s in the USA’s Gilded Age in the second half of the 19th century (James Crabtree, The Billionaire Raj: a Journey through India’s New Gilded Age).

Modi government’s tutelage of Ambanis and Adanis is an open secret. Kerala challenged Adani’s bid for an airport lease is. A state minister said last year that Adani winning the bid was “an act of brazen cronyism.”

Threat of elimination of traditional markets

Farmers who could earlier sell grains and other products only at neighbouring government-regulated wholesale markets can now sell them across the country, including the big food processing companies and retailers such as WalMart.

The farmers fear the government will eventually abolish the wholesale markets, where growers were assured of a minimum support price for staples like wheat and rice, leaving small farmers at the mercy of corporate agri-businesses.

Is farmers’ fear genuine?

The farmers have a logical point. Agriculture yield less profit than industry. As such, even the USA heavily subsidies its agriculture. US farmers got more than $22 billion in government payments in 2019, the highest level of farm subsidies in the last 14 years, and the corporate sector paid for it. The Indian government is reluctant to give a permanent legal guarantee for the MSP. In contrast, the US and Western Europe buy directly from the farmers and build their butter and cheese mountains. Even the prices of farm products at the retail and wholesale levels are controlled by the capitalist government. In short, not the principles of capitalization but well-worked-out welfare measures are adopted to sustain the farm sector in the advanced West.

Threat of monopsonic exploitation

The farmers would suffer double exploitation under a monopsony (more sellers less buyers) at the hands of corporate sharks.  They would pay less than the minimum support price to the producers. Likewise, consumers will have to pay more because the public distribution system is likely to be undermined as mandi (regulated wholesale market) procurement is would eventually cease to exist.

Plight of the Indian farmer

The heavily indebted Indian farmer has average income of only about Rs. 20000 a year (about Rs. 1666 a month). Thousands of farmers commit suicide by eating pesticides to get rid of their financial difficulties.

A study by India’s National Bank for Agriculture and Rural Development found that more than half of farmers in India are in debt. More than 20,000 people involved in the farming sector died by suicide from 2018-2019, with several studies suggesting that being in debt was a key factor.

More than 86 per cent of India’s cultivated farmland is owned by small farmers who own less than two hectares of land each (about two sports fields). These farmers lack acumen to bargain with bigger companies. Farmers fear the Market Support Price will disappear as corporations start buying their produce.

Concluding remarks

Modi sarkar is unwilling to yield to the farmers’ demand for fear of losing his strongman image and Domino Effect’. If he yields on say, the matter of the farm laws, he may have to give in on the Citizenship Amendment Act also. Fund collection in some foreign countries has started to sustain the movement. As such, the movement may not end anytime soon. Unless Modi yields early, he would suffer voter backlash in coming elections. The farm sector contributes only about 15 per cent of India’s $2.9 trillion economy. But, it employs around half its 1.3 billion people. 

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