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MGP, is a replicable model of consumer activism.

In 25 years, Mumbai Grahak Panchayat has become a powerful advocate of consumer issues.

Every month, 20,000 families in and around greater Mumbai receive their household essentials at their doorsteps. It's a clockwork operation. In each family carton is the newsletter "Grahak" educating them about consumer, health, legal and environmental issues. Member families save money, are relieved of shopping chores and can be certain that what is sent to them is of the best quality. And increasingly they know that though they may be of modest economic means, they are empowered beings. They are members of Mumbai Grahak Panchayat ['Mumbai Consumer Forum'], a respected --and often, feared!-- activist group.

An arson and a fast:

Much of the widespread impatience and cynicism that we see among Indians is because of short memories. Until twenty years ago India was a land of shortages brought on by a closed door policy. In the early seventies you needed 'contacts' and influence to get your monthly rations. Senior executives travelling from Bombay to other parts of India on work would look for grocery scoops and fly home with proud bags of rice or sugar. Just before festivals all commodities would disappear. Traders made huge profits from their hoards. When the ignoble 'Emergency' was thrust on India in 1975, harried families welcomed it as a means to fix traders. Surely consumer discontent is a fascist's opportunity?

In Pune of 1974 a young man, Bindu Madhav Joshi was witness to a mob setting fire to hoarders' warehouses. His reaction was different and antithetical to fascism. His response was positive, democratic. He teamed with noted musician Sudhir Phadke to found what has become a robust consumer organisation. Nearby, in Mumbai another young man, Madhu Mantri was on the same wavelength. One memorable day, he organised consumers to sit-in and observe a fast. Someone brought news of a huge hoard of edible oils. Mantri led the protesters to the warehouse and with police help, began to sell the stock to the public at a fair price, the long faced hoarders given the proceeds. The sale went on all night.

It was obvious that consumers lacked a forum. Joshi and Phadke began to organise buying groups in Pune in order to marshall their collective power. Soon the trio --Joshi, Phadke and Mantri-- met up in Mumbai and began planning buying groups there. In April 1975 they had a structure that went by the rather long name -- Janata Madhyavarti Grahak Sahakari Sangh Maryadit, Mumbai[JMGSS] [roughly, Middle Income Consumer Assistance Association]. The significance of this move was instantly inferred and applauded by Justice M.C.Chagla and Jayaprakash Narayan, who was then agitating for a total systemic change in India.

Overheads free:

JMGSS is the distribution wing that handles procurement and supply of household needs. It is the executive arm of Mumbai Grahak Panchayat [MGP] formed in 1981. The basic idea of course is 'economy of scale'. As consumers pay in advance no capital is invested and no stock is maintained. As purchases are made from the producer end of the supply chain most middlemen are eliminated. Governed by volunteers supervising a minimal staff, overheads are low, quality awareness high and sweep of initiatives broad.

The JMGSS distribution system has evolved over the years and it is today a well oiled machine. Each buying group has a minimum of 11 families as members. One or more of them volunteers to interact with MGP. Indents are filled and sent out to MGP which consolidates all indents and gets the best prices. The buying group leaders are then billed and by the time their payments come in, so have the ordered goods from suppliers. They are paid promptly. JMGSS staffers process some of the commodities and then repack individual family's requirements. On a pre-arranged date convenient to group leaders, family packs arrive in a van. Families collect them from the leaders' houses. By the time a month's delivery cycle has ended, at least 3500 volunteers at various levels would have participated in delivering an average of 50 to 60 items to nearly 100,000 people in 20,000 families spread all over greater Mumbai - and even further up to Srivardhan and Dopoli, over 100kM away on the Konkan coast.

Consumers save between 15 and 20% as the JMGSS works within a ceiling of 6% over wholesale prices. Member families pay Rs.72 per year as member-ship fees. Among these families, over 1200 have very low incomes. Membership is growing most rapidly among this category. The volume of annual business is Rs.140 million.

Several times during the year, Grahak Panchayat Pethas --which are bargain sale meets-- are organised. Before festivals, before school-reopening, during vacations, well chosen products are sold at these plazas at low prices. Merchants of course are carefully vetted before they can set shop.

Sensitive consumerism:

There is a central Purchase Committee with 13 women volunteers who co-ordinate with a professional Purchase Manager. In search of quality products at low prices, these members often travel long distances to meet producers or wholesalers, evaluate their produce and finalise prices. Rice is procured from Punjab, wheat from Gondal in Madhya Pradesh,turmeric from Sangli, chili from Sakleswar and household linen from Solapur and Aurangabad. Minor reprocessing like grinding and mixing is often done to prevent adulteration.

Only produce of Indian companies are purchased. Often they groom cottage industries to supply them regularly with quality products. For example "Shudh" is a detergent supplied by a small scale producer. Goods are bought from Anandavan, a leper resettlement programme run by Baba Amte. "Tungi" is the brand for pickles and jams made by Adivasis near Karjat.

Members are coerced actively to change their consuming habits. For instance it was found that the golden yellow jaggery was processed with harmful chemicals. It took a lot of education to make families switch to the black coloured natural jaggery. Individual consumers have no choice: they must select from a list of about 60 pre-determined items that have survived MGP's critical stare. The logic behind 'no-choice' is that even if a consumer is presented with a wide choice he may not always make the right decision. The monthly newsletter is full of sound advise and change advocacy. Therfore a member voluntarily suspends his individual 'right to choose'. Call it consumer response to business cartels.

The overall direction is by MGP whose President today is Dr.Gangadhar Gadgil an economist and a respected public name of Maharashtra. Chairperson is Mrs. Lalitha Kulkarni, a retired professor of Economics and the Vice Chairman is Dr.Manohar Panajkar a retired scientist who served with Bhaba Atomic Research Commission [BARC]. MGP constantly raises consumer awareness. It has a series of publications. One of them is a detailed guide to how consumers with complaints should go about seeking redressal. Another is on the impact of food advertisements on children. It is an eternal campaigner. Paper and cloth bags are extensively used for deliveries. Estimates are, they avoid using over half a million plastic bags per year. It campaigns in favour of breast feeding, against arbitrary price rises and so on.

Quick to battle :

And when needed MGP wages war. The most celebrated of course is the one [see accompanying box] where they humbled a two-wheeler maker. Then there was the case against the Aarey Milk Dairy in Worli which was found to be using Irish butter contaminated by radio activity. MGP exploded with posters, articles and door to door campaign. The government dairy backed off. It has intervened in a case of negligent medical assistance, death of a housewife by cooking gas leakage, loss of an academic year to a girl because of delayed announcement of results, selling of rejected drugs by Glaxo into the black market... the list goes on.

MGP is today a member of the International Consumer Union, but it is entirely a home-grown institution not depending on anything overseas. While most Indians sit and mourn their helplessness MGP has proved you can thrive without government help; in fact, you can take on the government and still thrive. Its own impressive building in north Mumbai came up by volunteer contributions and interest free deposits. MGP is a model that is waiting to be replicated in an increasingly urbanising India.

There are three reasons for MGP's success. First Maharashtra is a leader among Indian states in producing volunteer activists in all layers of its society. It rare to find the cast of thousands that come together to make MGP a success. The second reason is that high-rise dwellings of Mumbai foster the creation of buyer groups. Organising families and distribution of goods would be easy in such a city. Also, in Mumbai wholesale markets are far away and people are far too busy. Finally, a consumer activist group built on a goods distribution service sustains continuity.Its large, stable membership makes MGP a voice that cannot be ignored. Normally, groups come together for a cause and then disband. For a free-for-all society like India, where issues constantly need to be addressed, stable, growing groups are essential. The Mumbai Grahak Panchayat may have created a template that can travel. Its success is of great importance to the future of a democratic India. A time will come when MGP clones will spring up everywhere.

__________


Mumbai Grahak Panchayat

Grahak Bhavan

Sant Dhyaneshwar Marg

Vile Parle [West]

Mumbai 400 056

Phone: [022] 6288624

eMail: mgp@bom5.vsnl.net.in - mgpanchayat@hotmail.com

__________


November,2002

 

 

mgp

Moving the Parliament.

The story begins in the early eighties, the era of shortages. A huge consumer population waited for two wheelers. So when the government at last began to license new manufacturers, a ready market waited for them.

Many new scooter makers began to advertise their forthcoming models. Of these Lohia Machines Limited [LML] made the most seductive pitch. Put down Rs.500 and book your Vespa --of Piaggio, Italy design-- went the 1983 offer. The deposit will earn 9% interest and the amount will be adjusted against the delivery price. If you cancelled your booking after 6 months, the money will be returned --with 7% interest-- within 60 days.

LML whose capital was Rs.120 million, collected a whopping Rs.1600 million from depositors scattered all over the country. With its licensed capacity of 100,000 scooters per year, it would have taken it 23 years to complete deliveries.

In the eighties, Rs.500 was a lot of money for middle income people. LML blithely ignored cancellations or made lazy, part refunds. It was confident the depositors would be unable to organise themselves and put up a joint fight.

LML had reckoned without MGP. Shirish Deshpande, a researcher with MGP wanted March 15,1990 [World Consumer Rights Day] to be the occasion to go beyond groceries. He proposed that MGP organise scattered LML depositors and take the company on. MGP snapped on the wide angle lens. Following newspaper advertisements 750 depositors turned up for the contact meeting. Over 1500 formal complaints eventually followed.

A class action was filed against LML in the National Consumer Disputes Redressal Commission headed by Justice V.B.Eradi. Deshpande piloted the struggle with generous counsel from many legal luminaries. There were many hurdles to cross. The most notable one was Deshpande's attempt to get general relief for all aggrieved depositors, not just those that had preferred complaints. He estimated 400,000 to have been denied refunds and argued that even if a fourth of them came forward individually, the Commission would be swamped for years. But the Justice held that the Act referred to the specific "consumer" not the general "consumers". Deshpande won the point by saying that the Act did not expressly prohibit general relief. He argued that a law had to be interpreted in a way that would further the objective of the law.All right said the Commission, produce the list of all aggrieved. Stumped for a while, Deshpande turned the table on LML and suggested that Commission direct the company to bring in the records it had!

A cornered LML finally brought the list packed in 23 cartons stacked in a van! The Commission directed the Company to file a time-table for refunds. 'Active' complainants would be paid 18% interest and the 'passive' ones 12.5%

The victory was not limited. Case law had been established that any consumer group could now sue before consumer courts on behalf of a class of consumers. Finally, to crown it all, the Parliament on June 17,1993 ratified an amendment to the Consumer Protection Act to extend the definition of "complainant" to include "one or more consumers where there are numerous consumers having the same interest."

Shirish Deshpande today devotes all of his time to consumer issues.