Problems and solutions in consumer protectionThe government and the private sector should prepare the market monitoring modalities jointly.
Shankar Man Singh
Prices of daily necessities have gone up unnaturally in the market since the Covid-19 pandemic disrupted normal life. The government has said that the transportation and distribution of essential commodities are going on regularly, but prices have gone up due to insufficient supply in the market. The Department of Commerce, Supply and Consumer Protection Management implements the Consumer Protection Act, the Food Act is overseen by the Department of Food Technology and Quality Control, the Drugs Act is overseen by the Department of Drug Management and the Drug Management Authority, and the Measurement Department is overseen by the Department of Quality Control and Weights & Measures.
As the relationship and monitoring may not be effective, it is necessary to pay attention to the need for a separate umbrella act. There is an unfair relationship between producers and consumers. The rights of producers should not be infringed in the interest of consumers. The current efforts in the field of protection of consumer rights are not enough. The disruption in the supply chain has increased the cost of the economy, and we are facing a situation where consumers are suffering a lot. There should be an environment where consumers can get the desired goods easily and at a reasonable price.
It seems that a Unified National Supply Action Committee and a Unified Valley Supply Action Committee should be formed at the national level to improve the overall distribution system of the country by making the supply system of essential commodities easier and more accessible.
Traders are cheating consumers by selling them low-quality products at high prices or giving them short measure. Dishonest traders face fines ranging from Rs200,000 to Rs3,000,000. There is also a provision for the department to file a court case against traders for selling products that are not properly labelled or have expired. However, under the new law, if a trader wants to review the department's proceedings, he can complain to the department by depositing half of the penalty amount. The department can double the amount of the fine for repeat offences.
Consumer rights activists and retailers have questioned the government's ability to implement the new market monitoring process recently unveiled by the Ministry of Industry, Commerce, and Supplies for public response. The Market Monitoring Procedure 2020, which has just been implemented, is designed to protect consumers and requires businesses to adhere to certain quality standards. Inspection teams can shut down a firm for violating the law. Traders can be fined on the spot. The inspection chief is authorised to detain the accused if they attempt to flee, destroy evidence or obstruct the investigation process.
Some think that provincial and local governments and district administrations can be given the right to inspect the market. New procedures and rules will make the monitoring system more systematic and limited, but consumer rights activists are sceptical. The market should be stable, supply-friendly and clean. However, the current market monitoring does not appear to be fully legal, practical and business-friendly. The government, traders, consumers, producers and suppliers can all benefit if a joint task force consisting of the government and the private sector prepares the market monitoring modalities and moves forward. This way, a transparent, lawful and consumer-friendly market can be created.
In the current context, to make market monitoring transparent, lawful and practical, it is necessary to address the following points seriously. There is no clear policy in the country regarding addressing, managing and destroying expired and damaged items. Retailers usually return expired and damaged items to wholesalers. The wholesaler in turn returns the goods to the producer or importer and reimburses them. It is natural for a business unit to have expired and broken items. The main thing is that such goods should not be sold to consumers and, in this regard, certain criteria and procedures should be issued.
Market prices around the world are generally determined by factors such as demand, supply, weather, foreign exchange rates, consumer interest, international prices and quantity of products. This is a very common phenomenon in a liberal, flexible and open economy. But the current market monitoring team has not assimilated this general rule of the economy. Therefore, with the participation of the private sector, a three-point procedure should be followed to first prepare a list of essential commodities, identify the causes of the price rise in the second phase, and control the prices of essential commodities in the third phase.
Even now, there is a lot of confusion in Nepal's economic world about maximum retail prices. Except for a few countries in the Indian subcontinent, the trend of liberal economic policy seems to have removed the practice of maximum retail prices in most countries of the world. There is still a lot of confusion among us regarding the maximum retail price. For example, how can the price of an item imported from the Sunauli border point be the same in Butwal, Kathmandu, Baglung and Namche? The freight to Namche Bazaar is 30 percent higher on average. Therefore, the goods sold at airports, cinema halls, resorts and hotels cannot be made available according to the listed price.
When retailers sell imported goods, they are also affected by transportation costs, insurance fees, government taxes, local taxes, business promotion fees, donations and fluctuations in foreign exchange rates. Therefore, goods imported from India can easily be bought in some markets of Nepal after multiplying the stated price by 1.60, while in some markets, the consumer price is two to three times higher due to these different types of costs.
To make market monitoring reliable, systematic and economically friendly by addressing the above-mentioned challenges and possibilities, it is necessary to set limits on the storage of goods by entrepreneurs; create a permanent market monitoring mechanism with the participation of the private sector; remove cartels, syndication and hoarding; amend the Black Market Act, which was enacted 40 years ago, in line with today's liberal economic policy; prepare objective criteria for implementing a digital weighing system in the market and measuring the quality of agricultural produce practically.