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Mandatory Printing of Cost of Production along with Maximum Retail Price in all packaged commodities

The compulsory printing of Maximum Retail Price (MRP) on all packaged commodities was introduced in 1990 by the Ministry of Civil Supplies, by making an amendment to the Standards of Weights and Measures Act (Packaged Commodities Rules) (1976) to prevent tax evasion and protect consumers from profiteering by retailers.

As this Act did not achieve the expected results, a Bill (Bill No: 57 of 2006) named 'the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Bill, 2006' was put up before the parliament. The 'objects and reasons' for proposing such an Act were stated in the Bill itself and reproduced below.

"It is generally seen that the prices of consumer goods sold in the markets are determined arbitrarily by the manufacturers. In this process, the manufacturers gain huge profit as the actual manufacturing cost is very low. The consumers' interests are compromised, and they are compelled to buy goods at much higher prices in comparison to actual manufacturing cost of goods. Thus, consumers are subjected to economic exploitation.

For example, potato chips, drinking water, soft drinks, automobiles, medicines, etc. are being sold at a price much higher than their cost price. The manufacturers arbitrarily fix the price and the consumers are compelled to purchase goods at higher costs. If it is made mandatory for the manufacturers to print the actual cost of production of goods along with their maximum retail price it will help to curb the greed of the manufacturers.

Such a measure will also help the consumers in making a decision regarding buying the product. It is the duty of the Government to bring a legislation for protecting the interests of consumers. In the wake of economic liberalization, it has become essential that the consumers are given the right to know the actual manufacturing cost of the goods they are going to purchase.

It is also in the public interest to make commodities and goods available at fair prices to consumers. The interests of consumers can be protected against the vice of profiteering by making the goods and commodities available to them at a reasonable price."

The salient features of the Bill are as follows:
  1. The Bill, when enacted, would become 'the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2006' and shall apply to all persons involved in marketing or manufacturing of goods based on either indigenous or imported materials with the intention of offering it for sale in the market.
  2. 'Consumer goods' mean all goods and items brought in the market for sale and are meant for the use and consumption of the consumers
  3. 'Cost of production' means cost incurred directly or indirectly by the manufacturer in the production of goods
  4. 'Maximum retail price' means such price at which the product shall be sold in retail and such price shall include all taxes levied on the product
  5. No person shall sell or cause to be sold any consumer goods without the Cost of Production and Maximum Retail Price of the product printed on such product
  6. Any person may file a complaint with the appropriate Government in case a consumer goods is sold at more than the Maximum Retail Price printed on the product or is sold without the Cost of Production of the product printed on it
  7. The appropriate Government, on receipt of the complaint from any individual or on its own, shall cause an enquiry made and if it is found that the provisions of the Act have been violated, the license of the organization responsible for manufacturing the consumer goods as also of the organization selling the consumer goods shall be cancelled forthwith and the person-in-charge of the organization shall be punished with simple imprisonment for a term which shall not be less than one year and with a fine which shall not be less than rupees one lakh.
  8. It was also provided in the Bill that the Act should be given wide publicity.

The Bill only seeks to print the Cost of Production in addition to the MRP on every product and there is absolutely no bar or restriction to display any price as MRP of a product irrespective of its Cost of Production. The only intention is to make the consumer aware of the difference between the two values, namely Cost of Production and MRP (or the price he has to pay after discount, if any) and make a conscious decision to buy the same or not.

It is common knowledge that any amount, without any rhyme or reason, is now printed on a product as the MRP. At times, the MRP is several times higher than the intended selling price. Some traders offer huge discount on MRP, thus making the consumers falsely believe that they are getting the same at a lower price. Yet many traders sell the product at MRP itself, making a huge profit for themselves.

This practice is sheer exploitation or cheating the poor customers, and the Government has a bounden duty to prevent such malpractices and protect its innocent people who look at the Government as their well-wishers and guardians. It is with this good intention 'the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Bill, 2006' was put up before the parliament.

But nothing had happened for 8 long years since placing the Bill before the Parliament in 2006 and the same Bill was again put up before the Parliament in 2014 as Bill No: 45 of 2014. Another 8 years had again elapsed. But for some reasons, the Bill is yet to become an Act. It is not known what prevents our successive governments to enact this very important Bill which would serve as a tool to check the unethical practice of fixing any arbitrary price as MRP as per the whims and fancies of an unprincipled seller?

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