Government Policies and Business Regulatory Environment

Consumer Protection

The Department of Consumer Affairs of the Ministry of Consumer Affairs, Food and Public Distribution is responsible for the implementation of the Consumer Protection Act, 2019, Bureau of Indian Standards Act, 2016, and Standards of Weights and Measures - The Legal Metrology Act, 2009; Essential Commodities Act, 1955 (Supply, Prices, and Distribution of Essential Commodities not dealt with specifically by any other Department); Prevention of Black Marketing and Maintenance of Supply of Essential Commodities Act, 1980; internal trade; regulation of packaged commodities; consumer cooperatives; and monitoring prices and availability of essential commodities, etc.40

The Consumer Protection Act, 2019, received Presidential assent and came into effect on 9 August 2019. This 2019 Act repeals the previous consumer protection Act 1986, which had been in effect earlier. This prior legislation had been amended from time-to time to bring it in accordance with changes brought about by the economic liberalization, globalization of markets, and digitalization of products and services. However, its practical implementation was far from fulfilling its desired objective of being a socio-economic legislation that sought 'to provide for better protection of the interests of consumers.' While using the same phrase in its preamble, the 2019 Act, has substantially enhanced the scope of protection afforded to consumers by bringing within its purview advertising claims, endorsements, and product liability, all of which play a fundamental role in altering the consumer behavior and retail trends in the 21st century.

The 2019 Act continues to have Consumer Dispute Redressal Commissions at the district, state, and national levels (Consumer Commissions). However, the pecuniary jurisdiction, i.e., the monetary value of complaints that can be entertained, of each of these commissions have been substantially increased to reduce the burden on the State and National Commissions by encouraging consumers to approach the District Commission for complaints valued up to INR 10 million.41

The National Building Code of India, 2005 (NBC), is a comprehensive building code providing guidelines for regulating building construction activities across the country. It serves as a model code for adoption by all agencies involved in building construction, such as the Public Works Departments, government construction departments, local bodies or private construction agencies. The NBC mainly contains administrative regulations, development control rules, and general building requirements, fire safety requirements, stipulations regarding building materials, structural design and construction (including safety), and building and plumbing services42. Local bylaws are also formulated and adopted by state governments, urban local bodies, and development authorities to regulate construction activities in the area that they are framed for.

The Real Estate (Regulation and Development Act, 2016, aims to protect the interests of a large number of aspiring house buyers while enhancing the credibility of the construction industry by promoting transparency, accountability, and efficiency in the execution of projects. It was enacted to establish an effective regulatory mechanism for the orderly growth of the sector, which is the second-largest employer after agriculture.

The Act's main objectives include:

  • To establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure the sale of plots, apartments or buildings, or the sale of real estate projects, in an efficient and transparent manner
  • To protect the interest of consumers in the real estate sector
  • To establish an adjudicating mechanism for speedy dispute redressal
  • To establish the Appellate Tribunal to hear appeals from the decisions, directions, or orders of the Real Estate Regulatory Authority and the adjudicating officer

With effect from 1 May 2017, all 92 Sections of the Act have come into force wherein all developers shall get all the ongoing projects that have not received a Completion Certificate and the new projects registered with the Regulatory Authorities within three months, i.e., by the end of July 2017. This enables the buyers to enforce their rights and seek redressal of grievances after such registration.

  • 40.Notification dated 13 August 2019, Notifications for Combinations, ompetition Commission of India, http://www.cci.gov.in/sites/default/files/notification/210553.pdf, accessed 25 September 2020
  • 41..The Consumer Protection Rules and Regulations Under The Consumer Protection Act, 2019, Department of Consumer Affairs, https://consumeraffairs.nic.in/acts-and-rules/consumer-protection, accessed 25 September 2020
  • 42..National Building Code of India, 2016, https://bis.gov.in/index.php/standards/technical-department/national-building-code/, accessed 25 September 2020
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Rajiv Rajendran
Executive Director
Corporate Services

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