The state as protector: quality standards, weights and measures, regulators

Detail

Why the state steps in

• Consumer protection means the government protects consumers from unfair practices, overcharging and exploitation.
• In a market, the seller usually knows much more than the buyer about quality, weight and price. The buyer cannot test every medicine or weigh every packet, so the state sets the rules.
• Class 7 (Understanding Markets) gives the government four jobs in markets: 1. Setting quality and safety standards 2. Checking the external effects of markets 3. Regulating weights and measures 4. Controlling unfair practices such as hoarding, overpricing and monopoly abuse (Class 9)

1. Setting quality and safety standards

• Quality standards are the rules a manufacturer must follow when making goods or providing services.
• Medicines:
• The government approves a medicine before it can be sold.
• After that, it sample-tests batches to check that they still meet quality standards.

• The agency is CDSCO (Central Drugs Standard Control Organisation). The law is the Drugs and Cosmetics Act 1940.

• Compulsory BIS certification:

• A Quality Control Order (QCO) is an order that makes a BIS standard compulsory for a product. Without BIS certification, the product cannot be made, imported or sold.
• The Bureau of Indian Standards (BIS) had notified 187 QCOs covering 769 products under compulsory certification (2025) [11].

• Products are chosen for compulsory certification for these reasons: public interest, protection of human, animal or plant health, safety of the environment, prevention of unfair trade practices, and national security [12].

• Gold hallmarking:

• Hallmarking is an official certification of the purity of gold.
• HUID-based hallmarking became mandatory from 1 April 2023. HUID (Hallmark Unique Identification) is a unique code that lets anyone trace a piece of jewellery [13].
• More than 40 crore gold jewellery items had been hallmarked by November 2024. The fourth phase of mandatory hallmarking began on 5 November 2024 [14].

2. Checking external effects of markets

• An external effect (externality) is a cost that a producer puts on people outside the deal, such as pollution or harm to health. The price of the product does not include this cost.
• The market does not correct this on its own, so the government makes strict rules.
• NCERT example: the ban on single-use plastics.

3. Weights and measures (legal metrology)

• Legal metrology is the regulation of the weights, measures and weighing instruments used in trade, and of what must be printed on packaged goods.
• Laws:
• The Legal Metrology Act 2009 replaced the Standards of Weights and Measures Act 1976.

• The Legal Metrology (Packaged Commodities) Rules 2011 list what a pre-packed item must declare.

• Mandatory declarations on a pre-packed item:

• name and address of the manufacturer, packer or importer
• country of origin (for imported goods)
• common or generic name of the product
• net quantity
• month and year of manufacture
• MRP inclusive of all taxes
• unit sale price
• "best before" or "use by" date, if the product becomes unfit to eat after some time

• consumer-care contact details [2]

• Unit sale price is the price per kg or per litre (or per unit). NCERT links it to a 2022 amendment. Its purpose is to let buyers compare prices easily while shopping [2].

• Worked example: Pack A is 500 g for ₹60, which is ₹120 per kg. Pack B is 1 kg for ₹110, which is ₹110 per kg. The unit sale price shows at once that Pack B is cheaper per kg, even though its label price is higher.

• Changes made to reduce compliance burden:

• Packets now declare only the month and year of manufacture. This removed confusion about which date to print [2].

• Quantity can be stated as a number, unit, piece, pair or set, not only as weight or volume [2].

• Latest amendment: The Legal Metrology (Packaged Commodities) Amendment Rules 2025 add special provisions for packages of medical devices. They bring the 2011 Rules in line with the Medical Devices Rules 2017 [3].

• Pan masala: The government has made it mandatory to print the Retail Sale Price (RSP) on all pan masala packs [4].
• Jan Vishwas (Amendment of Provisions) Act 2023:
• It decriminalised several minor Legal Metrology offences.
• This means fines replaced jail terms for these offences.
• The aim is ease of doing business, so that honest traders do not face criminal cases for small technical mistakes.

4. An old idea: the Arthashastra's manasrava

• Kautilya's Arthashastra told ghee traders to give buyers 1/50 part extra. This extra was called manasrava.
• Reason: some ghee sticks to the measuring can, so the buyer would otherwise get less than they paid for.

• Worked example: 1/50 = 2%. A buyer who pays for 1 kg (1,000 g) of ghee gets 1,000 ÷ 50 = 20 g extra, so 1,020 g in total.

• Lesson: protecting consumers is not a modern idea. Fair measurement was a state duty in ancient India too.

The caveat: limits of state intervention

• Class 7 warns: "Too many rules can make it difficult for markets to function properly."
• Class 9 gives three limits:
• Price distortion: if the state fixes prices too low, producers earn less and supply less.
• Compliance burden: too many permits hurt ease of doing business. For example, a small restaurant needs food-safety, fire, pollution and local permits.

• Weaker incentive to innovate: strict rules can make firms less willing to try new products or methods.

• The Jan Vishwas Act 2023 and the removal of extra labelling rules (see above) respond to the compliance-burden problem.

Regulating unfair practices (Class 9, The Price Puzzle)

• Price ceiling on essential medicines:
• A price ceiling is the highest legal price a seller may charge.

• The NPPA (National Pharmaceutical Pricing Authority) fixes ceiling prices under the Drug Price Control Order (DPCO).

• Sanitiser case (COVID-19, 2020):

• Demand surged → shops ran out of stock → some sellers hoarded (held back stock to sell later at a higher price) and sold on the black market.
• The government acted:
  • It declared sanitisers essential commodities under the Essential Commodities Act 1955.
  • It capped the MRP at ₹100 per 200 ml, which works out to ₹0.50 per ml. A 500 ml bottle could therefore cost at most ₹250.
• Result: new producers entered the market and supply recovered.

• The mechanics of price ceilings are covered in market-equilibrium-price-controls.

• Monopoly abuse:

• A monopoly has one seller. An oligopoly has a few sellers.
• Such sellers can charge more, supply less and lower quality, because buyers have few other options.
• Today the Competition Commission of India (CCI) mainly keeps this in check.

Sectoral regulators

• A sectoral regulator is a statutory body (a body created by an Act of Parliament) that watches one sector for fair practices and transparency. Each regulator has its own grievance channel.

Regulator	Sector	Consumer grievance channel
RBI	Banking, payments	RBI Integrated Ombudsman Scheme 2021 (now RB-IOS 2026) [9][10]
SEBI	Securities market	SCORES portal
TRAI	Telecom	Consumer complaint rules; DND registry against spam calls
IRDAI	Insurance	Bima Bharosa portal; Insurance Ombudsman
FSSAI	Food	Food Safety Connect app

• RBI Integrated Ombudsman Scheme 2021 ("One Nation, One Ombudsman"):
• An ombudsman is an official who handles public complaints against an institution free of cost.
• The scheme merged three earlier schemes [9]:
  • Banking Ombudsman Scheme 2006
  • Ombudsman Scheme for NBFCs 2018
  • Ombudsman Scheme for Digital Transactions 2019
• It gives cost-free redress for complaints about deficiency in service by RBI-regulated entities, when the entity itself has not resolved the complaint [9].
• Compensation under the 2021 scheme:
  • up to ₹20 lakh for the loss, apart from the disputed amount itself;
  • up to ₹1 lakh more for loss of time, expenses, harassment and mental anguish [9].
• Update: the RB-IOS 2026 replaces the 2021 scheme (NCERT: RBI Integrated Ombudsman Scheme 2021) [10].

CCPA: the horizontal regulator

• CCPA is the Central Consumer Protection Authority, set up under the Consumer Protection Act 2019.
• It is a horizontal regulator. That means it covers consumer rights and unfair trade practices across all sectors, while a sectoral regulator covers only one.

• The NCERT scaffold places the CCPA under Section 7. The CPA 2019 text itself creates the CCPA under Section 10. Check the bare Act on indiacode.nic.in before quoting a section number in the exam.

• Class 9 names the CCPA alongside RBI, TRAI and SEBI.

• Guidelines it has issued:
• Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022, notified on 9 June 2022 [6].
  • They set conditions for a non-misleading advertisement.
  • They regulate bait ads (ads for a cheap offer the seller does not really intend to supply) and "free" claims.
  • They set duties for manufacturers, advertisers and advertising agencies [6].
• Guidelines for Prevention and Regulation of Dark Patterns, 2023, issued on 30 November 2023. They list 13 dark patterns [5].
  • A dark pattern is a website or app design that tricks or pressures users into choices that are not in their interest.
  • The 13 are: false urgency, basket sneaking, confirm shaming, forced action, subscription trap, interface interference, bait and switch, drip pricing, disguised advertisements, nagging, trick wording, SaaS billing and rogue malware [5].

• Guidelines for the Prevention of Misleading Advertisements in the Coaching Sector, 2024 [15].

• Enforcement:

• The CCPA had issued 325 notices for violations of consumer rights, misleading advertisements and unfair trade practices, with total penalties of ₹1.19 crore [7].
• It fined PhysicsWallah ₹5 lakh and McAfee ₹1 lakh for using dark patterns [8].

• It issued 20 notices to IAS coaching institutes for misleading ads and penalised 8 of them (2023) [16].

• Grievance channel for any sector:

• The National Consumer Helpline (NCH) has a toll-free number, 1915, and works in 17 languages.
• Complaints can also be filed by WhatsApp, SMS, email, the NCH app, the web portal or the UMANG app [17].

Prelims Hooks

• Legal Metrology Act 2009 replaced the Standards of Weights and Measures Act 1976. Labelling rules are in the Packaged Commodities Rules 2011.
• Pre-packed goods must show the month and year of manufacture, the MRP inclusive of all taxes and the unit sale price [2]. Trap: the exact date of manufacture is not required.
• Manasrava = 1/50 part extra (2%) given to ghee buyers, from Kautilya's Arthashastra.
• CDSCO regulates medicine quality under the Drugs and Cosmetics Act 1940. NPPA fixes medicine price ceilings under the DPCO. Do not mix the two.
• During COVID-19 (2020), sanitisers were declared essential commodities under the Essential Commodities Act 1955, and the MRP was capped at ₹100 per 200 ml.
• RBI Integrated Ombudsman Scheme 2021 merged three schemes (Banking 2006, NBFC 2018, Digital Transactions 2019) [9]. It has been replaced by RB-IOS 2026 [10].
• The CCPA's Dark Patterns Guidelines 2023 list 13 dark patterns, including drip pricing, basket sneaking and confirm shaming [5].
• Grievance portals: SEBI → SCORES. IRDAI → Bima Bharosa. FSSAI → Food Safety Connect. National Consumer Helpline → 1915 [17].
• HUID-based hallmarking of gold has been mandatory since 1 April 2023 [13].
• Jan Vishwas Act 2023 decriminalised minor Legal Metrology offences, replacing jail terms with fines.

Mains Points

• Regulation vs ease of doing business:
• Standards, QCOs and labelling rules protect consumers.
• But too many permits and criminal penalties raise costs, especially for MSMEs.

• India is trying to balance the two in several ways:

  • Jan Vishwas 2023 replaced jail terms with fines.
  • Labelling rules were simplified, for example month-and-year dating [2].
  • At the same time, compulsory certification was expanded (187 QCOs covering 769 products) [11].

• Sectoral vs horizontal regulation:

• RBI, SEBI, TRAI, IRDAI and FSSAI know their own sectors deeply.
• The CCPA covers the gaps between them, such as misleading ads, dark patterns in e-commerce and coaching-sector ads [5][6].

• Risk: two regulators may act on the same matter. There is a need for clear coordination rules.

• Price controls: a useful but limited tool:

• The sanitiser cap (2020) and NPPA ceilings keep essentials affordable during shortages.
• But a ceiling set below the market price weakens producers' incentive to supply.

• In the sanitiser case, supply recovered because new producers entered the market. Caps work best when they are temporary and when entry is easy.

• Digital consumer protection:

• Dark patterns and drip pricing are harms of the online market.
• The CCPA's guidelines and penalties [5][8] show consumer protection moving from checking physical weight and quality to regulating how websites and apps are designed.