Celebrities endorsing misleading advertisements can be jailed for up to five years and face a fine of Rs 50 lakh under a new draft law, which will be taken up by a group of ministers on Tuesday.
The Centre in August last year had introduced the Consumer Protection Bill 2015, in Lok Sabha, to repeal the 30-year-old Consumer Protection Act. A Parliamentary Standing Committee submitted its recommendations in April.
After studying the panel's report, the consumer affairs ministry has accepted some key recommendations such as provisions for fixing liability on celebrities and stringent punishment for adulteration, among others.
According to sources, the department of consumer affairs has received comments from other ministries on the draft law.
Almost all the ministries are in agreement on the proposed provision to impose hefty penalty and imprisonment to celebrities endorsing misleading advertisements as well as those involved in adulteration, they added.
A group of ministers, headed by Finance Minister Arun Jaitley, is scheduled to meet on Tuesday to discuss the changes proposed by the consumer affairs ministry in the draft law before placing it for the cabinet approval.
Consumer Affairs Minister Ram Vilas Paswan, Law Minister Ravi Shankar Prasad, Heath Minister J.P. Nadda, Power Minister Piyush Goyal, Transport Minister Nitin Gakari and Commerce Minister Nirmala Sitharaman are also part of the informal GoM.
According to sources, the ministry has proposed stringent provisions to tackle misleading advertisements as well as to fix liability on endorsers/celebrities.
"For the first time offence, a fine of Rs 10 lakh and jail term of up to two years, while for second and subsequent offenses, a fine of Rs 50 lakh and imprisonment of five years has been proposed for brand ambassadors," a source said.
The ministry has proposed similar penalty and jail term for adulteration, besides license suspension and cancellation.
The ministry has also accepted the panel's recommendation to include 'deficiency in services' in product liability.
It has agreed to provide an enabling provision to make rules to regulate e-commerce and direct selling.
It also seeks to remove overlap of powers of Central Consumer Protection Authority (CCPA) and the Consumer Fora. An investigating wing will be set up at CCPA, while limiting the role of a district collector to support CCPA in investigation.
It has also removed a provision for penalty on consumers for frivolous complaints.