Centre weighs MRP rejig for price clarity

Proposal to set MRP in consultation with industry stakeholders

- Dhirendra Kumar

The Centre is looking to make pricing of retail goods more transparent and consumer-friendly through a potential overhaul of the maximum retail price (MRP) system, five people aware of the matter said.

The Union consumer affairs department has sounded out industry associations, consumer bodies and tax officials about the plan on 16 May, the people cited above said on the condition of anonymity. While the intention is to prevent manufacturers marking up retail prices steeply, some believe the proposal may erode pricing freedom.

Retail outlets are currently free to charge any amount up to the maximum printed on the label, and manufacturers do not need to justify how the MRP is arrived at. According to one of the five people mentioned above, the consumer affairs department is looking into whether there should be guidelines on linking MRP to the cost of making and marketing items including essential commodities, packaged goods, and daily use consumer products.

To be sure, the proposal is still in its early stage, and the date for the follow-up meeting is yet to be decided.

Under the Legal Metrology Act, 2009, the department of consumer affairs has the mandate to regulate weights, measures, and labels on packaged goods to ensure accuracy, transparency, and consumer protection. However, the Act does not empower the department to prescribe a pricing formula.

Responding to a question about setting MRP under the new regime, a second person said, "The standard cost will be decided in consultation with all stakeholders. Industry and consumer groups have been asked to give their suggestions to fix the MRP in a way that is not deceptive. The proposal is meant for most of the consumer goods." A ministry communication titled "Hybrid meeting to discuss the declaration of exaggerated MRP on packaged commodities" said consumer affairs secretary Nidhi Khare would chair the meeting on 16 May.