The Bill has strong provisions to check adulteration and misleading ads and also provides for fine up to Rs 5 million and jail up to 5 years for manufacturers and service providers for false and misleading ads. Against adulteration, the Bill has provisions for fine up to Rs 1 million and life term imprisonment.
The objective of the Bill is to "provide for protection of interest of consumers and for the said purpose to establish authorities for timely and effective administration and settlement of consumer disputes..."
The Bill aims to set up an executive agency 'Central Consumer Protection Authority' (CCPA) to make intervention when necessary to prevent consumer detriment arising from unfair trade practice and to initiate class action including enforcing recall, refund and return of products.
"This fills an institutional void in the regulatory regime extant. Currently, the task of prevention of or acting against unfair trade practices is not vested in any authority," the bill said.
The role envisaged for the CCPA compliments that of the sectoral regulator and any duplication of potential conflict is avoided, it added.
Besides setting up an authority, the Bill has provisions for product liability action on account of harm caused to consumers due to a defective product and deficiency in services. It also has provisions for 'mediation' as an alternative dispute redressal mechanism.
Citing reasons for bringing a new law, the government said that consumer markets for goods and services have undergone a drastic transformation since the enactment of Consumer Protection Act, 1986.
The emergence of global supply chain, rise in global trade and rapid development of e-commerce have led to a new delivery system for goods and services and also provided new options and opportunities for consumers.
"Equally, this has rendered the consumer vulnerable to new forms of unfair trade and unethical business practices. Misleading ads, tele-marketing, multi-level marketing, direct selling and e-commerce pose new challenges to consumer protection and will require appropriate and swift executive intervention to prevent consumer detriment," the Bill said.
Therefore, there is a need to bring new law to address constantly emerging vulnerabilities of consumers, it added.
The Bill has several provisions aimed at simplifying the consumer dispute adjudication process of the consumer dispute redressal agencies, besides enabling consumers to file complaints electronically.
In August 2015, the Centre had introduced the Consumer Protection Bill in the Lok Sabha to repeal the 30-year-old Consumer Protection Act, 1986.
A Parliamentary Standing Committee had also submitted its recommendations in April 2016.
The government has brought this bill as there were many amendments to the bill introduced in 2015.