The Misleading Retail Price (MRP)!

We're all familiar with the MRP (Maximum Retail Price) printed on packaged goods in supermarkets and other stores. 

MRP (Maximum Retail Price)

Well, I've often felt it should really stand for Misleading Retail Price (MRP)! While shopping, it's a huge point of irritation for many of us, as this seemingly deliberate overpricing by manufacturers feels like nothing short of a "legal scam", one that many suspect has the quiet approval of the Finance Ministry. 

The lack of clear guidelines for setting MRP allows many manufacturers to intentionally inflate it. This practice enables retailers to offer discounts, typically ranging from 10-30% normally and a hefty 70-90% during "flash sales." Despite these seemingly large reductions from the MRP, I am sure that shopkeepers still manage to turn a profit. 

E-Commerce MRP and Discount

The level of discounting also varies by product category. For instance, electronics, fashion apparel, sanitary-plumbing-hardware, pharmaceuticals, automotive, and FMCG items often see heavier discounts than certain specialized or niche products. 

In spite of their high-volume, low-margin business model, e-commerce giants like Amazon and Flipkart sometimes engage in practices that appear to deceive consumers. This includes displaying MRPs higher than the printed price on the product, thereby fabricating inflated 'discounts' and effectively cheating customers.

While the concept of MRP is intended to protect consumers, its real-world application often feels like a "mockery" due to the diverse pricing strategies employed by retailers. The irony lies in how a mechanism designed for consumer protection is frequently manipulated, with a perceived lack of effective government or regulatory oversight to prevent such "cheating" practices. 

MRP in Other Countries

Maximum retail price (MRP) is a manufacturer-calculated price that is the highest price that can be charged for a product sold in India. Bangladesh and Nepal follow a similar MRP system for consumer goods. In Pakistan, Sri Lanka, and Indonesia certain categories of goods follow MRP.

In most advanced countries like USA, UK, Euro countries, Australia, Canada, Japan, China, etc. there is no MRP system. In these regions, prices are generally determined by demand, supply, and competition, though governments may regulate prices for essential items or monopolies. Consequently, the retailers are free to set their own prices for products. 

Overhaul of MRP System 

While the Modi administration has brought about significant improvements in various sectors over the past decade, the MRP system, originally introduced in the Consumer Goods Act of 2006, remains largely unchanged by the current BJP government. However, it's worth commending the BJP government for their success in the pharmaceutical sector, specifically for making quality generic medicines accessible and affordable to the common person through the Jan Aushadhi stores. 

This is to request the Finance Minister Mrs. Sitharaman to undertake a comprehensive overhaul of the MRP system. This revamp is crucial to genuinely protect consumers, especially given the evolution of modern retail, including hypermarkets (e.g., D-Mart, Lulu), e-commerce platforms, computerized supply chains, and the influx of imported Chinese goods.