CLASS-10th—B K REDDY SIR

UNDERSTANDING ECONOMIC DEVELOPMENT

CHAPTER 1
DEVELOPMENT

DEVELOPMENT

Development means continuous progress or increase in real per-capita income.

In other words, it's an improvement in the economic welfare of the people and
their standard of living.

Characteristics of development
(i) Developmental goals are different for different people.
(ii) What may be development for one may not be development for the others.
(iii) For development, people look at a mix of goals.
(iv) Different persons could have different as well as conflicting notions of a
country's development.

Development goals may be common, different or conflicting

(i) Common Goals: needs which are common to all like income, freedom,
equality, security, respect, friendship, etc.
(ii) Different Goals: Development or progress does not mean the same thing for
every person. Each individual has his own idea of development.
For example, development for a farmer might mean irrigation facilities; while for
an unemployed youth, it may mean employment opportunities, etc.
(iii) Conflicting Goals: What may be development for some, may become
destruction for some others.
For example, Industrialists may want dams for electricity, but such dams would
displace the natives of a region by submerging their land.
Economic development: applies to the all round development of a country
where the people earn higher income and can satisfy all their needs.
→ It refers to the adoption of new technologies, transition from agriculture-
based to industry-based economy and improvement in lifestyle.

Human development: means the development of an individual in such a way that

he could lead a happy life according to his cherished wish and fulfill all the
materialistic desires.

→ The measures of looking at development other than income are quality of life
and environmental sustainability.

Quality of life depends upon:

(i) Money and material things.
(ii) Presence of family members, friends and relatives.
(iii) Good working atmosphere at the office.
(iv) An opportunity to learn.
(v) A position of self-respect in the family.
(vi) A safe and secure environment.

NATIONAL DEVELOPMENT
Different people have different ideologies regarding countries’ development. These
ideologies could be at times conflicting.

Features of a Developed Country

(i) High per capita income.
(ii) High HDI.
(iii) Greater focus on economic growth rather than development.
(iv) High standard of living.
(v) Most of the population has access to basic healthcare and education.
(vi) High quality of life parameters—including freedom, equal opportunities etc.

The prefixing of Human before Development gives a whole new meaning to the
development. It means that humans have to develop for development. It is not just
income but also the life expectancy, education, health indicators, social
infrastructure that the country provides to its citizens that contribute towards the
development.

HUMAN DEVELOPMENT INDEX (HDI)

→ It is the quality of life-index prepared by UNDP.
→ It indicates to a country how far it has reached and how far it has yet to reach
to achieve high ranks in matters such as per capita income of the people.
→ It has mainly three indicators:
(i) Life Expectancy at Birth: the average expected length of life of a person at the
time of birth.
(ii) Gross Enrolment Ratio: enrolment ratio in primary schools, secondary
schools and in higher education.
(iii) Per Capita Income: calculated in dollars for all countries for comparison.
India’s rank (2020): 131

COMPARING DIFFERENT COUNTRIES OR STATES’ DEVELOPMENT

(Use of average)

(i) Different countries have different populations, so total income will not
indicate what an average person is likely to earn.
(ii) For comparison between countries, Average income (per capita income) is
used for better understanding.
(iv) According to the World Bank criterion, countries with per capita income of
USD 12,535/year in 2020, are called high income countries and those with per
capita income of USD 1,036 or less are called low-income countries.
India’s position: LOW MIDDLE INCOME COUNTRY

PUBLIC FACILITIES
→ Public facilities are the facilities that are provided to the people by the
government.
→ The provision of public services and facilities in the urban environment has a
significant impact on the quality of life that residents and others enjoy.
→ They play an essential role in providing support services to create viable,
sustainable, healthy and cohesive communities, overcoming social barriers and
increasing achievements.
→ Government has to provide certain essential facilities like healthcare,
sanitation, electricity, public transport and educational institutions.

SUSTAINABILITY OF DEVELOPMENT
→ Sustainable development aims at fulfilling the needs of today without
compromising the needs of the future generation.
→ Sustainability is the capability to use the resources judiciously and maintain
ecological balance.
→ It lays emphasis on environmental protection and checks environmental
degradation.
→ It helps in stopping overexploitation and overuse of resources.

Measures to promote Sustainable Development

(i) Increased use of renewable resources: Sustainable development is the
management of renewable resources for the good of the entire human and natural
community. For sustainable development, we must support the usage of
renewable resources such as solar, wind, geothermal, and biomass energy sources.
(ii) Less use of fossil fuels: Fossil fuels take a lot of time to be formed. These
fossil fuels contribute tremendously to environmental pollution.
(iii) Introduction of organic farming: Organic Farming contributes largely in
creating a better quality of soil and combating erosion.
(iv) Adopting measures to reduce global warming: In our everyday life, we
should contribute towards building a better environment.
 CHAPTER 2
SECTORS
Of Indian Economy

PRIMARY, SECONDARY AND TERTIARY SECTORS

(a) Primary Sector

→ Includes activities undertaken by using natural resources.
→ It forms the base for all other products that are made.
→ It is also called Agriculture and related sector.
E.g., forestry, agriculture, fishing, etc.

(b) Secondary Sector

→ It includes various manufacturing activities and it adds utility to the primary
sector.
→ In this sector, the product is not produced by nature but rather has to be made
and hence the process of manufacturing is essential.
→ It is also known as Industrial sector
E.g., Cotton cloths, iron ore, steel, etc.

(c) Tertiary Sector

→ It includes all such activities which support the primary and secondary sector
by providing services.
→ These activities do not produce goods, but rather are an aid for the
production process
→ It is also known as the Service sector
→ It employs many different kinds of people- highly skilled and educated
workers on one side, and a very large number of workers engaged in services such
as small shopkeepers, repair persons, transport persons, etc., on the other side.
E.g., banking, communication, transportation, etc.
Tertiary sector is becoming very important in India due to several reasons:
(1) In any country, basic services like transport, bank, insurance, educational
institutions, etc., are required and the government has to take responsibility for
providing these services.
(2) The development of agriculture and industry led to the development of
services, such as transport, trade, storage, etc.
(3) As income levels rise in big cities, certain sections of people started
demanding more services like eating out, tourism, shopping, private hospitals,
etc.
(4) Over the past decade or so, certain new services such as those based on
information and communication technology have become important and essential.
(5) Greater the development of the primary and secondary sectors, more would be
the demand for such services.

All the three sectors of the economy are highly interdependent on each other.
Example: Transportation.

(i) Primary sector produces natural goods and forms the base for all other products.
It became a finished product with the help of transportation.
(ii) Secondary sector is the manufacturing unit associated with industrial activity.
With the help of transportation, they sell these products in the market.
(iii) Goods that are produced in these two sectors need to be transported by trucks
or trains and then sold in wholesale and retail shops.

Historical changes in the sectors of the economy

(i) In the initial stages of development, the primary sector was the most
important sector of economic activity. As the methods of farming changed and the
agriculture sector began to prosper, people began to take up other activities.
(ii) New methods of manufacturing were introduced, factories came up and
started expanding.
(iii) The secondary sector gradually became the most important sector in total
production and employment.
(iv) With the development of sectors like transport and administration, the service
sector kept on growing.
→ In the past 100 years, there has been a shift from the secondary to the tertiary
sector in developed countries.
→ The service sector has become the most important in terms of total production
and employment. This is the general pattern observed in developed countries.

EMPLOYMENT SITUATION IN THESE SECTORS

Primary sector continues to be the largest employer:

(i) Enough jobs have not been created in the secondary and tertiary sector.
(ii) In the tertiary sector, though production has risen almost 11 times, employment
has grown only 3 times.
(iii) Even though industrial output went up by eight times, employment in the
industry sector went up by only 2.5 times.

Ways to generate employment:

(i) The government can spend some money or banks can provide loans to
construct wells, etc., which will reduce the dependency of farmers on rains, and
they will be able to grow two crops a year.
(ii) Construction of dams and canals can lead to a lot of generation of
employment in the agricultural sector itself.
(iii) If government invests money on transportation and storage of crops or
makes better rural roads, it can provide productive employment not just to farmers
but also to others who are in services like transport or trade.
(iv) If local banks give credits at reasonable rates to the small and marginal-
farmers, they will be able to buy necessary inputs for their crops in time.
(v) Another way to solve this problem is to identify, promote and locate
industries and services in the semi-rural areas where a large number of people
may be employed.
(vi) To improve health standards, we need health centres, hospitals and for that,
doctors, nurses and workers.
(vii) Similarly to provide education to all children, we would need a lot of schools
which can also generate employment.
(viii) Tourism: Every state or region has the potential for increasing the income
and employment for people in that area. This can also be done by promoting
tourism or the regional craft industry.
(ix) Education sector has the capability of generating at least 20 lakh jobs (NITI
Ayog study)
(x) To raise the standard of living of the people and to implement the right to work,
Government of India brough Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) 2005.
Under this act, all the people who are able to and in need of work in rural areas are
guaranteed 100 days of employment in a year. If the government fails to provide
employment, it will give unemployment allowances.

Problem of Disguised Unemployment

→ It is a situation where the number of workers engaged in a job is much more
than required.

For example, where the need is for 4 laborers and 7 laborers are working, it means
3 laborers are suffering from disguised unemployment or under-employment. In
such a case, the production will not be affected even if the three extra laborers do
not work.

→ In rural India, the agricultural field is suffering from disguised unemployment.

All family members work on the agricultural field but all the work can be done
only by one or two persons alone. Rest are just engaged.
→ More than half of the workers in the country are working in primary sector
mainly in agricultural activities producing only a quarter of GDP

→ In urban areas, workers like painters, plumbers, repair persons, and cart drivers
do not find work every day or for the whole day.

Measures that can be adopted to remove disguised unemployment in the

agriculture sector:
(i) Loans should be provided to the small farmers by the government or banks to
buy seeds or develop irrigation facilities, etc. to enable them to grow multiple
crops in a year.
(ii) Transportation and storage facilities should be improved to provide
employment opportunities.
(iii) New dams and canals should be constructed to generate employment.
(iv) By establishing processing units of agriculture production, more
employment opportunities can be created.
(v) Technical and vocational training can reduce the unemployment of farmers.

ORGANISED-UNORGANISED SECTOR

Employment is divided into the organised and unorganised sector based on the
nature of employment.
According to India’s Economic Survey, nearly 93% of the total workforce is
employed in the unorganised sector.

Difference between Organised and Unorganised sector

→ The organised sector comprises employees who work under fixed terms and
timings.
Ex: working for a factory or employed in a government job
→ The unorganised sector comprises employees working in minor business
concerns and units, often without any assurance of regularity.
Ex: domestic help, a salesman at a grocery shop etc.

1. Compliances –

→ Employers in the organised sectors follow the government rules and Acts
applicable to them. They have assured jobs with job security.
→ The Factory Act, PF Act, and Minimum Wages Act provisions would apply to
them.
→ They have to report to the authorities confirming their adherence to the
applicable laws of the land.
→ Employers in the unorganised sector do not fall under the radar of government
laws and statutes.

2. Benefits –
→ Employers in the organised sector have set procedures that are followed to
relieve employees of their duties.
→ Employees are eligible for benefits like overtime, provident fund, medical
benefits and other perquisites provided by their employer.

→ Employers in the unorganised sector can lay off their employees easily.
→ They are not bound to pay any benefits that are available to the organised
sector. The benefits of minimum wages, provident fund and over time, are not
available to them.

3. Increments –

→ Employers define the salary hike criteria in the organised sector, like duration,
performance appraisal, seniority, etc.
→ These are generally defined in the employment documents like offer letter
and appointment letter.

→ There is no defined structure around the increase in pay in the unorganised

sector. It is dependent on the discretion of the employer.

4. Payments

→ In the organised sector, employees are eligible for salary as agreed in the
employment document. It is a fixed income, generally at the end of each month.

→ Employees in the unorganised sector receive wages based on the work done. It
is generally paid on a “earn as you work” basis instead of a fixed sum.

PUBLIC-PRIVATE SECTOR

On the basis of ownership, economic activities can be classified into two sectors-
Public and Private

→ Public Sector encompasses the companies, enterprises, or businesses wherein

the Government is the owner of the business by way of a majority shareholding
in the business.
→ These businesses are controlled, managed, and operated by the Government.
Ex: Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited, State
Bank of India, etc.

→ Private Sector includes those companies, enterprises, or businesses that are

owned by Private Individuals or Private Companies.
→ The companies in the Private Sector are controlled, managed and operated by
Private Individuals/Private Entities.
Ex: Reliance Industries Limited, HDFC Limited, etc.

Comparison between public and private sector

(i) Public sector companies serve the purpose of providing basic public services
to larger people whereas private sector companies are entirely profit-driven.
(ii) The government prefers retaining ownership of companies involved in utility
services such as water, electricity, roads, agriculture, and also for industries
sensitive to national security. Private sector companies have a large gamut of
industries to operate with a growing trend of privatization.
(iii) Both public vs private sector companies can be listed on stock exchanges and
their shares can be publically traded.
(iv) Public Sector companies are prone to more Government interferences for
multiple reasons including political reasons than their public sector counterparts
(v) The government has a control on pricing of the products in public sector
entities which is not the case with private companies
(vi) Public sector companies are relatively better placed than private-sector
counterparts in mobilizing funds from the market because of Government
backing.
 CHAPTER 3
MONEY
&
CREDIT

Different phases of medium of exchange:

(i) Ancient phase: time before the introduction of coins, people used grains and
cattle as money
(ii) Medieval phase: People used metallic coins like gold, silver and copper coins.
(iii) Modern phase: currency like– paper notes and coins are used as a medium of
exchange.

The modern forms of money include Paper currency, Coins, Demand deposits and
Cheques.

MONEY- A medium of exchange

Money acts as an intermediate in the exchange process and eliminates the need for
double coincidence of wants.
→ As money acts as intermediate, it is also called medium of exchange.
→ A person holding money can easily exchange it for any commodity or service
that he or she wants.
→ It acts as a medium of deferred payment.

● DOUBLE COINCIDENCE OF WANTS: occurs when two people have

goods they are both happy to swap in exchange. i.e. a perfect barter
exchange.

Modern currency or rupee is accepted as a medium of exchange because:

(i) It is authorised by the government of a country.
(ii) In India, the Reserve Bank of India issues all currency notes on behalf of the
central government.
(iii) No other individual or organisation is allowed to issue currency.
(iv) The law legalises the use of rupee as a medium of payment that cannot be
refused in settling transactions in India.
(v) No individual in India can legally refuse a payment made in rupees.

DEPOSITS WITH BANK

→ Banks accept the deposits from the people who have surplus money and pay
interest on the deposits.
→ Keep only a small portion of their deposits as cash with themselves, as a
provision to pay the depositors
→ Major portion of the deposits is used to extend loans to those who need
money.

In this way, banks mediate between those who have surplus money and those
who need money.

→ The deposits in the bank accounts can be withdrawn on demand, so these

deposits are called demand deposits.
→ Money could be transferred from one bank account to another bank account,
through a cheque.

LOAN ACTIVITIES OF BANK

→ Major portion of the remaining deposits is used by banks to give loans to
people.
→ Borrowers take loans to repay it to the bank along with interest.
→ The interest charged on loans is more than the interest paid by the banks on
deposits.

The difference between the interest charged on loans and the interest paid on
deposits is the bank’s income or profit.

CREDIT SITUATIONS IN INDIA

 ● CREDIT: giving money on loan, in the form of money, goods or services to
needy persons, in return for the promise of future payment

→ Credit can play an important & positive role:

● helps people in setting up their business, increase their income and support
their families.
● helps in constructing their houses and get relief from monthly rent.
● helps in raising their standards of living.

→ Credit could also push a borrower in the situation of debt trap, from which
recovery is very painful.

TERMS OF CREDIT
(1) Specified rate of interest.
(2) Security against the loan to recover the money if the borrower fails to repay it
(Collateral)
→ The assets accepted as collateral- land, property, vehicles, livestock, standing
crops and bank deposits.
(3) Borrower needs to submit certain documents like proof of identity, residence,
employment and income to avail a loan.
→ The lender reserves the right to sell the collateral in case of non-repayment to
recover the loan amount.
(4) Mode of payment

TYPES OF CREDITS
(a) Formal Credit: generally available with the banks and cooperatives.
→ They charge lesser rates of interest than informal institutions.
→ The Reserve Bank of India (RBI) supervises the functioning of the formal
sources of loan.
→ The two major sources of formal sources of credit:
(i) Banks
(ii) Cooperatives.
(b) Informal Credit: Informal lenders include moneylenders, traders,
employers, relatives and friends, etc.
→ They charge much higher interest on loans.
→ There is no one to stop them from using unfair means to get their money back.

FORMAL SECTOR CREDIT INFORMAL SECTOR CREDIT

Includes banks & co-operatives Includes moneylenders, traders.
relatives, friends etc
Require collateral and proper No collateral or heavy documentation
documentation is required
Reasonable rate of interest is charged Very high, unreasonable rate of
interests
Apart from profit making, they have Aim is to extract as much profit as
objective of social welfare too possible
Terms of credit are fair and rational Impose very tough, sometimes
unreasonable terms on credit
RBI supervises its functioning No supervision by any organisation

Most of the poor households are still dependent on informal sources of credit:
(i) Banks are not present everywhere in rural India, whereas informal sources are
easily available in all villages.
(ii) Getting a loan from a bank is much more difficult for poor people, because
bank loans require proper documents and collateral.
(iii) Formal sources provide loans only for productive purposes, whereas the
informal sources provide credit for productive and non-productive purposes.

There is a need to expand formal sources of credit:

(i) To save the poor farmers and workers from the exploitation by the informal
sector credit.
(ii) Informal sector charges a higher interest on loans which means that a large
part of the earnings is used to repay the loan.
(iii)Formal credit can fulfil various needs of the people by providing cheap and
affordable credit.

Importance of cheap and affordable credit for the country’s development:

(i) Cheap and affordable credit would lead to higher income.
(ii) Many people could borrow for a variety of needs
(iii) It encourages people to invest in agriculture, do business and set up small
scale industries etc.
(iv) It enables more investment which will lead to the acceleration of economic
activities.
(v) Affordable credit would also end the cycle of the debt trap.

ROLE OF COOPERATIVES
→ Apart from banks, cooperative societies or cooperatives also provide cheap
credit in rural areas.
→ Members pool their resources with cooperation in certain areas.
→ To eradicate capitalist exploitation, to eliminate middlemen, and to bring the
consumer and producer together.

SELF HELP GROUPS (SHGs)

→ In rural areas, women organise themselves in small groups and pool their
savings.
→ Includes 15-20 people from neighbouring areas
→ Provides loans for a variety of purposes and at a reasonable interest rate.
→ It helps women become financially independent
→ It can be used as a platform to discuss and act on a variety of social issues
such as health, nutrition, domestic violence, etc.
 CHAPTER 4
GLOBALISATION

PRODUCTION ACROSS COUNTRIES

Multinational Corporations (MNCs)

→ the companies that own or control the production of their goods in more than
one country.

Main features of MNCs:

(i) They set up their factories and offices in more than one country.
(ii) They set up their units where the cost of production is low and higher profits
can be earned.
(iii) They set up their units where they can get cheap labour and other resources.

Multinational Corporations are spreading their production in different ways:

(i) By setting up a partnership with local companies.
(ii) By placing orders with local companies.
(iii) By closely competing with the local companies.
(iv) By buying local companies.
(v) By providing money for additional investment.
(vi) By bringing the latest technology for production.

Ways in which Multinational Corporations set up or control production in

other countries:
(i) MNCs set up their production units close to the market.
(ii) MNCs set up production units jointly with local companies.
(iii) They set up units where there is skilled and unskilled labour available at low
cost.
(iv) Large MNCs in developed countries place orders for productions with small
producers.
(v) They have tremendous power to determine price, quality, delivery and labour
conditions for distant producers.
(vi) By purchasing local companies and then expanding its production with the
help of modern technology.

Role of MNCs in the economic development:

(i) MNCs place orders for production with small producers: Due to this small
producers are able to get a global exposure as well as a huge customer base.
(ii) MNCs set up partnerships with local companies: The local companies are
able to expand themselves at a global level.
(iii) They are interlinking the markets all over the world: it has led to the
exchange of foreign currency and thereby providing a boon to the economy.

Advantages of MNCs:
(i) reduce the host country's dependence on imports, while exports see a rise.
(ii) promotes maximum utilisation of the country’s resources, which leads to
economic development.
(iii) bring the latest technology for production, and generate employment
opportunities.

Disadvantages of MNCs:
(i) small manufacturers become victims of competition.
(ii) closing down of small units, which rendered many workers jobless.
(iii) employers prefer to employ workers ‘flexibly’, and workers' jobs are no
longer secure.

Foreign Trade and Integration of Markets

Foreign trade: process of buying and selling goods and services between two or
more than two countries.

Foreign investment: involves capital flows from one country to another, granting
extensive ownership stakes in domestic companies and assets.

Positives of foreign trade:

(i) creates an opportunity for the producers to reach beyond the domestic markets.
(ii) producers can sell their products not only in markets within the country but can
also compete in markets in other countries.
(iii) Expanded choice of goods beyond domestically produced goods.

→ Foreign trade results in connecting the markets or integration of markets in

different countries.

Special Economic Zones(SEZs): industrial areas with world class facilities.

→ Companies who set up units in SEZs are exempted from tax for 5 years.
→ They are set up to attract foreign investment.

World Trade Organisation

→ It has established rules for developed countries regarding international trade,
allowing free trade for all.
→ Aimed at liberalising international trade.
→ 164 countries of the world are currently members of the WTO.

GLOBALISATION
Globalisation is the integration or interconnection of the economy of a country
with the economies of other countries under conditions of free flow of trade,
services, technology, capital and movement of people across international
borders.

Factors that have Enabled Globalisation

(i) Technology
→ Rapid improvement in technology (IT)
→ faster delivery of goods across long distances at lower costs.
→ development in ICT has made information instantly accessible.
(ii) Liberalisation of Foreign Trade and Foreign Investment Policy
Liberalisation: Removing barriers or restrictions set by the government on
trade.
→ Government can use trade barriers to increase or decrease (regulate) foreign
trade
→ They are used to protect indigenous producers from foreign competition.

Several Indian companies have been able to benefit from Globalisation:

(i) have invested in newer technology and production methods and raised their
production standards.
(ii) have gained from successful collaborations with foreign companies.
(iii) some large Indian companies have emerged as multinational themselves.
(iv) it has created new opportunities for companies providing services particularly
those involving IT.
(v) Besides, a host of services such as data entry, accounting, administrative tasks
and engineering are now being done cheaply in India and are exported to the
developed countries.

The benefits of Globalisation can be shared better(Government’s role):

(i) The government policy must protect the interest, not only of the rich and the
powerful, but of all the people in the country.
(ii) The government can ensure that labour laws are properly implemented and
workers get their rights.
(iii) It can support small producers to improve their performance till they become
strong enough to compete.
(iv) It can use trade and investment barriers.
(v) It can negotiate at the WTO for ‘fairer rules’.
Globalisation and competition among producers has been advantageous:
(i) There is greater choice before consumers who now enjoy improved quality
and lower prices for several products.
(ii) People enjoy higher standards of living.
(iii) Services of the top Indian companies have been able to benefit from the
increased competition.
→ They have invested in newer technology and production methods and raised
their production standards.

Problems created by the globalisation for small producers and workers:

(i) It has led to a widening of income inequalities among various countries.
(ii) Workers' jobs are no longer secure.
(iii) Expansion of the unorganized sector.
(iv) Small manufacturers have been hit hard due to severe competition.
(v) Lives of workers are on the whims of employers.
(vi) Workers are deprived of their fair share of benefits.
 CHAPTER 5
C O N S U M E R- R I G H T S

CONSUMER IN MARKETPLACE

We participate in the market both as producers and consumers.

→ Producers: produce goods and services, from any sectors such as agriculture,
industry or services.
→ Consumers: purchase final goods and services.

Conditions in which markets do not work in a fair manner:

(i) When producers are few and powerful.
(ii) When consumers purchase in small amounts, and are scattered.
(iii) When large companies have a monopoly in the production of goods and can
manipulate the market in various ways.
(iv) By passing on false information through media and other sources to attract
consumers.

CONSUMER MOVEMENT

Factors which gave birth to the consumer movement in India:

(i) consumer movement as a social force originated with the necessity of
protecting and promoting the interest of consumers against unethical and unfair
trade practices.
(ii) Rampant food shortages, hoarding, black marketing, adulteration, the
malpractices of food and edible oil gave birth to the consumer movement in an
organized form in the 1960s.

Limitations of the Consumer Movement:

(i) It is cumbersome, expensive and time-consuming.
(ii) Evidence is not easy to gather.
(iii) Existing laws are not clear.
(iv) Lack of consumer awareness.

COPRA
→ Consumer Protection Act, was passed by the government of India in 1986 on
24th December for the protection of consumer’s rights, which is now celebrated as
“Consumers’ Day” in India.
(i) It applies to all goods and services.
(ii) It covers all sectors, i.e., private, public and cooperative.
(iii) It gives rights to consumers.

→ Under COPRA, three-tier quasi-judicial machinery at district, state and

national levels was set up for redressal of consumer disputes.
→ The Act has enabled the consumers to have the right to represent themselves
in the consumer courts.
→ The enactment of COPRA has led to the setting up of separate departments of
consumer affairs in central and state governments.

The rationale behind the enactment of COPRA, 1986:

(i) make consumers aware of their rights.
(ii) punish those who indulge in malpractices and exploit the consumers.
(iii) see that traders don’t indulge in anti-social activities such as hoarding and
black-marketing.

CONSUMER RIGHTS

Consumers are exploited in the market place in the following ways :

(i) Good weighs less than what they should.
(ii) Traders add charges that were not mentioned before.
(iii) Traders sell adulterated or defective goods.
(iv) False information is passed through the media and other sources to attract
consumers.
Ways to avoid consumer exploitation:
(i) The formation of various organizations such as consumers forum or consumer
protection council.
(ii) To guide consumers on how to file cases in the consumer courts.
(iii) Consumer’s education to be promoted through advertisement/mass
campaign/publicity/ against malpractices of traders
(iv) By writing articles/ holding exhibitions/rallies.
(v) Strict laws to be enforced in market places.

The consumer has the following rights:

(i) Right to be informed: A consumer has the right to know the important
information about the goods and services he purchases.

→ Information about goods, available under RTI:

● Ingredients used in the product.

● Date of manufacture.
● Expiry date
● Address of the manufacturer.
● Directions for proper use.

(ii) Right to choose: A consumer has the right to buy goods and services of his
choice.

(iii) Right to seek redressal: A consumer has the right to seek redressal against
unfair trade practices and exploitation.
→ If any damage is done to a consumer, he has the right to get compensation
depending on the degree of damage.

WAY FORWARD/ HOW TO PROTECT THE CONSUMERS

(i) Awareness of consumers is necessary to realize their role and importance.

(ii) Cash memo should be obtained and preserved by the purchaser.
(iii) The existing laws should be very clear on the issue of compensation to
consumers.
(iv) Enforcement of laws that protect workers especially in the organized sectors
should be strong.
(v) Rules and regulations for working of markets should be followed strictly.
(vi) It requires a voluntary effort and struggle involving the participation of one
and all.