Consumer Welfare Fund

The Consumer Welfare Fund (CWF) is a dedicated fund established by the Government of India to promote and protect the welfare of consumers. It is primarily intended to finance activities that strengthen consumer awareness, support consumer education, and protect consumer rights under various laws. The fund serves as an institutional mechanism to utilise unclaimed or unutilised amounts from indirect tax collections for the benefit of consumers.

Background and Establishment

The Consumer Welfare Fund was established in 1992 under Rule 97 of the Central Excise Rules, 1944, in accordance with the provisions of the Central Excise and Salt Act, 1944. It was created following the recommendations of the High-Level Committee on Indirect Taxes (1978), which observed that certain excise and customs duty refunds remained unclaimed or were not payable to specific individuals.
To ensure that such unclaimed amounts were used for public good, the government decided to create a fund for consumer welfare activities. Later, with the implementation of the Goods and Services Tax (GST) regime in 2017, the CWF continued under Section 57 of the Central Goods and Services Tax (CGST) Act, 2017.

Objectives of the Consumer Welfare Fund

The primary objective of the CWF is to ensure that unclaimed funds from indirect taxes are used in a manner that benefits consumers directly or indirectly. The main objectives include:

• Financing consumer awareness programmes on rights, responsibilities, and grievance redressal mechanisms.
• Promoting consumer education and research in consumer protection, fair trade practices, and quality standards.
• Providing financial assistance to voluntary consumer organisations and institutions engaged in consumer welfare.
• Strengthening consumer dispute redressal agencies, including Consumer Commissions at district, state, and national levels.
• Supporting initiatives to protect consumers from unfair trade practices, adulteration, and substandard products.
• Encouraging innovative projects aimed at improving market transparency, product safety, and information dissemination.

Legal and Administrative Framework

The Consumer Welfare Fund operates under the administrative control of the Department of Consumer Affairs, which functions within the Ministry of Consumer Affairs, Food and Public Distribution.
Key Legal Provisions:

• Under the Central Excise Act, 1944, and later under the CGST Act, 2017, all unclaimed refunds, duties, and taxes are credited to the Consumer Welfare Fund.
• Rule 97 of the CGST Rules, 2017, details the management and utilisation of the fund.

Composition of the Governing Body: The Standing Committee of the Consumer Welfare Fund oversees its operation and utilisation. It consists of:

• The Secretary, Department of Consumer Affairs (Chairperson).
• Representatives from the Ministry of Finance (Department of Revenue).
• Representatives from State Governments.
• Experts and members from consumer organisations and academic institutions.

The Committee examines proposals, evaluates project effectiveness, and recommends financial assistance to eligible organisations.

Sources of the Consumer Welfare Fund

The CWF is financed primarily through the following sources:

1. Unclaimed duty refunds under the Central Excise and Customs Acts.
2. Unutilised amounts of indirect taxes not refundable to specific individuals.
3. Receipts under the Goods and Services Tax (GST) – as per Section 57 of the CGST Act, 2017, all unclaimed tax refunds are credited to the fund.
4. Accrued interest on investments made from the fund.
5. Voluntary contributions and grants from individuals, corporations, or other agencies.

Utilisation of the Fund

The Consumer Welfare Fund is utilised to finance programmes and projects that directly or indirectly benefit consumers. Key areas of utilisation include:

1. Consumer Awareness Programmes:
   • Funding the “Jago Grahak Jago” (Be an Aware Consumer) campaign to educate citizens about consumer rights and responsibilities.
   • Disseminating information through advertisements, workshops, and media campaigns.
2. Assistance to Consumer Organisations:
   • Providing financial grants to registered Consumer Welfare Organisations (CWOs) engaged in research, advocacy, and complaint redressal.
3. Strengthening Consumer Redressal Mechanisms:
   • Supporting the establishment and modernisation of Consumer Commissions under the Consumer Protection Act, 2019.
   • Funding digital initiatives such as the E-Daakhil portal and Online Consumer Complaint System.
4. Consumer Research and Testing:
   • Establishing and funding Consumer Testing Laboratories to evaluate the quality and safety of products and services.
   • Supporting academic research in consumer law, market behaviour, and policy formulation.
5. Capacity Building and Training:
   • Training consumer activists, legal professionals, and officials in consumer dispute resolution and protection laws.
6. Support for Vulnerable Consumers:
   • Implementing projects to protect the interests of rural, illiterate, and marginalised consumers.

State Consumer Welfare Funds

In addition to the central fund, State Governments have established their own State Consumer Welfare Funds (SCWFs) under the same framework. A portion of the central allocation is transferred to the states to fund region-specific consumer welfare projects.
Each State Fund is managed by a State-level Standing Committee, headed by the Secretary of the State Department of Consumer Affairs, and follows similar objectives as the central fund.

Notable Initiatives Supported by the Fund

• National Consumer Helpline (NCH): A toll-free helpline (1800-11-4000) providing advice and support to consumers for grievance redressal.
• Consumer App “UMANG” and Online Complaint Portal: Digital platforms enabling online registration and monitoring of complaints.
• Consumer Clubs in Educational Institutions: Financially assisted by the CWF to inculcate awareness of consumer rights among students.
• Quality Control and Standardisation Campaigns: Promoting use of ISI, Agmark, and Hallmark certified products among consumers.
• Assistance to Consumer Courts: Financial aid for infrastructural development, digitisation, and case management systems in consumer courts.

Financial Management and Monitoring

The fund is managed through a dedicated account maintained by the Pay and Accounts Office (Department of Consumer Affairs). Utilisation of funds is subject to strict financial rules and annual audits by the Comptroller and Auditor General (CAG).
Periodic evaluation of funded projects ensures accountability, while the Standing Committee reviews ongoing activities and recommends corrective measures if necessary.

Achievements

• Enhanced consumer awareness and education through national campaigns.
• Strengthened institutional mechanisms for grievance redressal at central and state levels.
• Encouraged collaborative efforts between government and civil society in consumer protection.
• Supported innovation and digitisation of consumer services, improving accessibility.

Challenges

Despite its achievements, certain issues persist in effective implementation:

• Under-utilisation of funds due to delays in project approvals or lack of proposals.
• Limited outreach in rural and remote areas.
• Need for better monitoring and impact assessment of funded projects.
• Coordination gaps between central and state-level agencies.

Addressing these challenges requires continuous capacity building, stronger monitoring mechanisms, and community-level engagement.

Significance

The Consumer Welfare Fund represents the Indian government’s commitment to consumer-centric governance. It transforms unclaimed fiscal resources into social capital by funding initiatives that educate, empower, and protect consumers.
By financing awareness programmes, legal aid, and technological innovations, the CWF has strengthened India’s consumer protection framework, complementing the Consumer Protection Act, 2019, and supporting the vision of “Empowered Consumers in an Inclusive Market.”