NCERT Solutions for class 12 Business Studies Chapter 10 Consumer Protection

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NCERT Solutions for class 12 Business Studies Chapter 10 Consumer Protection

Very Short Answer Type

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A business firm sets up a consumer grievance cell under the “Right to Redress” in consumer rights.

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The quality certification mark used for agricultural products in India is “Agmark.”

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The jurisdiction of cases that can be filed in a State Commission covers disputes involving amounts between ₹1,00,00,001 and ₹10,00,00,000.

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Two reliefs available to consumers under the Consumer Protection Act (CPA) are:

  1. Replacement of goods.
  2. Refund of purchase price.

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The component of the product mix that helps the consumer exercise the right to information is “Labeling.”

Short Answer Type

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Various Acts passed by the Government of India to protect consumers’ interests include:

  1. The Consumer Protection Act, 2019: This act provides a framework for the protection of consumer rights and the establishment of consumer councils and other authorities.
  2. The Essential Commodities Act, 1955: This act aims to control the production, supply, and distribution of essential commodities to make them available to consumers at fair prices.
  3. The Prevention of Food Adulteration Act, 1954: This act aims to prevent the adulteration of food and ensure the purity and quality of food products.
  4. The Drugs and Cosmetics Act, 1940: This act regulates the import, manufacture, distribution, and sale of drugs and cosmetics to ensure their safety, efficacy, and quality.
  5. The Bureau of Indian Standards Act, 2016: This act establishes standards for goods, services, and systems, and promotes their compliance to protect consumers’ health and safety.

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The responsibilities of a consumer include:

  1. Be Informed: Understand product information, usage, and potential risks before making a purchase.
  2. Follow Instructions: Use products according to the manufacturer’s guidelines to ensure safety and effectiveness.
  3. Report Problems: Report any defects or issues with products or services to the seller or relevant authorities.
  4. Maintain Records: Keep receipts, warranties, and other documents for future reference and proof of purchase.
  5. Act Ethically: Avoid engaging in fraudulent or unethical practices such as returning used goods for a refund.
  6. Seek Redress: Actively pursue redress in case of unfair treatment or defective products.

These responsibilities help consumers make informed decisions and contribute to fair and ethical market practices.

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A complaint in a consumer court can be filed by:

  1. Any consumer: Any person who has purchased goods or services for consideration.
  2. A registered consumer association: An organization registered under the Companies Act or any other law for the time being in force.
  3. Central or State Government: The government can file a complaint on behalf of consumers.
  4. Legal heir or representative: Legal heirs or representatives of a deceased consumer.

These entities have the right to seek redressal for grievances against defective goods or deficient services.

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The proposal by FSSAI reinforces the Right to Information.

Right to Information: This right ensures that consumers have access to essential information about the products and services they use. By requiring hotels and food outlets to declare the type of oil or fat used in cooking, consumers can make informed choices about their food, taking into consideration their health, dietary restrictions, and preferences. This transparency helps consumers avoid potential allergens and make healthier eating decisions.

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As per the Consumer Protection Act (CPA), a consumer is:

  1. Any person who buys goods or services for consideration: This includes anyone who purchases goods or services for personal use, not for resale or commercial purposes.
  2. A person who uses the goods or services with the consent of the buyer: Even if the person did not directly purchase the goods or services, they are considered a consumer if they use them with the buyer’s consent.

These definitions ensure that both purchasers and users of goods and services are protected under the Act.

Long Answer Type Question

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Table of Contents

The Importance of Consumer Protection from the Point of View of a Business

Consumer protection is crucial for businesses for several reasons. It’s not just a legal obligation but a strategic approach that can enhance a company’s reputation, ensure customer satisfaction, and drive long-term success. For class 12 CBSE board exams, it’s essential to understand and articulate these points comprehensively to secure full marks.

1. Building Trust and Reputation

A business’s reputation is one of its most valuable assets. Consumer protection helps in building trust among customers. When consumers know that a business adheres to consumer protection laws and ethical practices, they are more likely to trust that brand. This trust leads to customer loyalty, word-of-mouth marketing, and a strong reputation, all of which are crucial for long-term success.

2. Legal Compliance and Avoidance of Penalties

Compliance with consumer protection laws is mandatory for businesses. Failing to comply can result in severe penalties, including fines, legal actions, and even the closure of the business. Adhering to consumer protection regulations helps businesses avoid these legal troubles and ensures smooth operations.

3. Enhancing Customer Satisfaction

Consumer protection practices such as transparent pricing, clear communication, fair return policies, and quality assurance directly impact customer satisfaction. Satisfied customers are more likely to return, make repeat purchases, and recommend the business to others. High customer satisfaction is a key driver of business growth and profitability.

4. Competitive Advantage

Businesses that prioritize consumer protection can gain a competitive edge in the market. Consumers are becoming increasingly aware of their rights and are more inclined to support businesses that respect and protect these rights. By emphasizing consumer protection, a business can differentiate itself from competitors and attract more customers.

5. Reducing Business Risks

Engaging in unfair practices or neglecting consumer protection can lead to customer complaints, negative publicity, and loss of business. By focusing on consumer protection, businesses can mitigate these risks. Proactively addressing consumer concerns and maintaining ethical standards can prevent potential issues and safeguard the business’s interests.

6. Fostering a Positive Business Environment

Consumer protection promotes fair competition and creates a level playing field for all businesses. When businesses adhere to consumer protection norms, it leads to a positive business environment where ethical practices are valued, and unscrupulous activities are minimized. This environment benefits all market players and encourages healthy competition.

7. Strengthening Brand Loyalty

Consumer protection fosters brand loyalty by ensuring that customers feel valued and respected. When consumers know that a business stands by its products and services and addresses their concerns effectively, they develop a strong emotional connection with the brand. This loyalty translates into sustained business and long-term customer relationships.

8. Supporting Corporate Social Responsibility (CSR)

Consumer protection is an integral part of a business’s corporate social responsibility (CSR) initiatives. By prioritizing consumer rights and well-being, businesses demonstrate their commitment to ethical practices and social responsibility. This, in turn, enhances their corporate image and can attract socially conscious consumers and investors.

Conclusion

In conclusion, consumer protection is not just about complying with laws but about fostering trust, satisfaction, and loyalty among customers. It reduces business risks, ensures legal compliance, and enhances a company’s reputation and competitive edge. For businesses, investing in consumer protection is a strategic decision that yields significant long-term benefits.

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Rights and Responsibilities of Consumers

Consumer rights and responsibilities are fundamental concepts that ensure a fair and just marketplace. As a class 12 CBSE board student, understanding these concepts thoroughly is crucial for securing full marks in your exams.

Rights of Consumers

  1. Right to Safety
    Consumers have the right to be protected against goods and services that are hazardous to life and health. This includes the safety of products ranging from food and pharmaceuticals to electrical appliances and vehicles. The right to safety ensures that consumers are not at risk due to defective or unsafe products.
  2. Right to Be Informed
    Consumers have the right to be informed about the quality, quantity, potency, purity, standard, and price of goods and services. This enables them to make informed decisions and protects them from misleading advertisements and false claims.
  3. Right to Choose
    Consumers have the right to access a variety of goods and services at competitive prices. This ensures that consumers can select the products and services that best meet their needs and preferences without being coerced or influenced by monopolistic practices.
  4. Right to Be Heard
    Consumers have the right to express their opinions and concerns about a product or service. This right ensures that consumer interests are considered in the formulation and execution of policies. It also allows consumers to voice their complaints and grievances.
  5. Right to Seek Redressal
    Consumers have the right to seek redressal against unfair trade practices and exploitation. This includes the right to a fair settlement of genuine grievances. Consumers can seek compensation for any loss or harm suffered due to the purchase of defective goods or unsatisfactory services.
  6. Right to Consumer Education
    Consumers have the right to acquire knowledge and skills to make informed decisions. This includes being aware of their rights and responsibilities and understanding how to seek redressal. Consumer education empowers individuals to make knowledgeable choices and protect their interests.

Responsibilities of Consumers

  1. Responsibility to Be Aware
    Consumers should be aware of their rights and must exercise them responsibly. They should stay informed about the products and services they purchase and the terms and conditions associated with them. Being aware helps consumers protect themselves from fraud and exploitation.
  2. Responsibility to Verify Information
    Consumers should verify the quality, quantity, and authenticity of the products and services they intend to purchase. This includes checking for necessary certifications, warranties, and expiry dates. Verifying information ensures that consumers make informed decisions and avoid potential risks.
  3. Responsibility to Choose Carefully
    Consumers should choose products and services based on their needs and budget. They should avoid being influenced by deceptive advertisements and ensure that their choices align with their values and requirements. Making careful choices helps consumers achieve maximum satisfaction.
  4. Responsibility to Speak Up
    Consumers should voice their concerns and complaints if they are dissatisfied with a product or service. This helps businesses improve their offerings and prevents other consumers from facing similar issues. Speaking up also encourages a culture of accountability and transparency.
  5. Responsibility to Seek Redressal
    Consumers should actively seek redressal if they encounter unfair trade practices or defective products. They should approach consumer forums, regulatory authorities, or the legal system to address their grievances. Seeking redressal ensures that consumer rights are upheld and promotes a fair marketplace.
  6. Responsibility to Use Products Safely
    Consumers should use products and services as intended and follow the manufacturer’s instructions. This includes reading warning labels, adhering to safety guidelines, and taking necessary precautions. Using products safely minimizes the risk of harm and ensures consumer well-being.
  7. Responsibility to Be Ethical
    Consumers should act ethically and responsibly in their interactions with businesses. This includes being honest about their needs, paying for the products and services they use, and avoiding fraudulent activities. Ethical behavior fosters trust and integrity in the marketplace.

Conclusion

Understanding consumer rights and responsibilities is essential for creating a balanced and fair marketplace. Consumers have the right to safety, information, choice, being heard, redressal, and education. However, with these rights come responsibilities such as being aware, verifying information, choosing carefully, speaking up, seeking redressal, using products safely, and acting ethically. By fulfilling these responsibilities, consumers can protect their interests, contribute to the betterment of the market, and ensure a positive and equitable shopping experience.

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Achieving the Objective of Consumer Protection

Consumer protection aims to safeguard the rights and interests of consumers and ensure a fair and transparent marketplace. There are several ways in which this objective can be achieved. For class 12 CBSE board exams, understanding these methods comprehensively is essential to secure full marks.

1. Legislative Measures

Governments enact various laws and regulations to protect consumer rights. Some key legislative measures include:

  • Consumer Protection Act, 2019: This act provides a legal framework to protect consumers from unfair trade practices, defective products, and substandard services. It establishes consumer councils and authorities for the settlement of consumer disputes.
  • Food Safety and Standards Act, 2006: This act ensures the safety and quality of food products. It regulates the manufacture, storage, distribution, sale, and import of food items.
  • Drugs and Cosmetics Act, 1940: This act regulates the import, manufacture, distribution, and sale of drugs and cosmetics to ensure their safety, efficacy, and quality.
  • Bureau of Indian Standards Act, 2016: This act provides for the establishment of standardization, marking, and quality certification of goods.

2. Consumer Education and Awareness

Educating consumers about their rights and responsibilities is crucial for effective consumer protection. Various initiatives can be undertaken to achieve this:

  • Consumer Awareness Campaigns: Governments and non-governmental organizations (NGOs) can conduct awareness campaigns through mass media, social media, and public workshops to inform consumers about their rights and how to exercise them.
  • Consumer Education in Schools: Including consumer education in school curricula can help inculcate awareness from a young age. Teaching students about their rights, responsibilities, and the importance of ethical consumption can empower them as informed consumers.
  • Information Dissemination: Providing consumers with easy access to information about products and services, such as labeling, certifications, and quality standards, helps them make informed choices.

3. Establishment of Consumer Forums and Redressal Mechanisms

Effective redressal mechanisms are essential for addressing consumer grievances and ensuring justice. This can be achieved through:

  • Consumer Dispute Redressal Commissions: Setting up consumer forums at the district, state, and national levels to handle consumer complaints and disputes. These forums provide a platform for consumers to seek redressal against unfair trade practices and defective products.
  • Online Grievance Portals: Developing online platforms where consumers can file complaints and track their status. This increases accessibility and convenience for consumers seeking redressal.
  • Ombudsman Schemes: Appointing ombudsmen in various sectors, such as banking and insurance, to handle consumer complaints and mediate disputes.

4. Regulation and Monitoring of Trade Practices

Regulating and monitoring trade practices ensure that businesses adhere to ethical standards and do not exploit consumers. This can be achieved through:

  • Inspections and Audits: Conducting regular inspections and audits of businesses to ensure compliance with consumer protection laws and regulations. This helps identify and address any violations.
  • Penalties and Punishments: Imposing strict penalties and punishments on businesses that engage in unfair trade practices, mislead consumers, or sell defective products. This acts as a deterrent and ensures accountability.
  • Quality Certifications and Standards: Establishing and enforcing quality certifications and standards for products and services. This ensures that consumers receive safe and reliable goods.

5. Promoting Ethical Business Practices

Encouraging businesses to adopt ethical practices contributes to consumer protection. This can be achieved through:

  • Corporate Social Responsibility (CSR): Encouraging businesses to engage in CSR activities that benefit consumers and society. This includes initiatives such as fair pricing, sustainable practices, and community development.
  • Codes of Conduct: Developing and promoting codes of conduct for businesses that outline ethical practices and consumer rights. Adherence to these codes ensures responsible business behavior.
  • Industry Associations: Forming industry associations that promote self-regulation and address consumer concerns. These associations can establish guidelines and standards for member businesses.

Conclusion

Achieving the objective of consumer protection requires a multi-faceted approach involving legislative measures, consumer education, redressal mechanisms, regulation, and ethical business practices. By implementing these methods, we can create a fair and transparent marketplace where consumers’ rights are protected, and their interests are upheld.

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Redressal Mechanism Available to Consumers Under the Consumer Protection Act, 2019

The Consumer Protection Act, 2019, aims to provide an effective and efficient redressal mechanism for consumers who encounter unfair trade practices, defective products, or deficient services. It establishes a three-tier redressal system consisting of District Commissions, State Commissions, and the National Commission. Here’s a detailed explanation of this redressal mechanism suitable for a long answer type question to help you secure full marks in your class 12 CBSE board exams.

1. District Consumer Disputes Redressal Commission (District Commission)

Jurisdiction:

  • The District Commission entertains complaints where the value of goods or services paid as consideration does not exceed one crore rupees.

Composition:

  • The District Commission comprises a President and not less than two members, with at least one member being a woman.

Procedure:

  • A consumer can file a complaint in writing or electronically.
  • The District Commission issues a notice to the opposite party, directing them to respond within a specified time.
  • The Commission may refer the matter for mediation if both parties consent.
  • If mediation fails, the Commission conducts an inquiry, examines evidence, and passes an order.

Reliefs:

  • The District Commission can order the opposite party to remove the defect, replace the product, return the consideration paid, pay compensation, or discontinue the unfair trade practice, among other remedies.

2. State Consumer Disputes Redressal Commission (State Commission)

Jurisdiction:

  • The State Commission entertains complaints where the value of goods or services paid as consideration exceeds one crore rupees but does not exceed ten crore rupees.
  • It also hears appeals against the orders of District Commissions.

Composition:

  • The State Commission comprises a President and not less than four members, with at least one member being a woman.

Procedure:

  • A complaint can be filed in writing or electronically.
  • The State Commission follows a similar procedure as the District Commission, including issuing notices, referring matters for mediation, and conducting inquiries.
  • Appeals against the orders of District Commissions must be filed within 45 days of the order.

Reliefs:

  • The State Commission has the same powers as the District Commission to provide relief to consumers.
  • It can also modify or set aside orders passed by District Commissions.

3. National Consumer Disputes Redressal Commission (National Commission)

Jurisdiction:

  • The National Commission entertains complaints where the value of goods or services paid as consideration exceeds ten crore rupees.
  • It also hears appeals against the orders of State Commissions.

Composition:

  • The National Commission comprises a President and not less than four members, with at least one member being a woman.

Procedure:

  • A complaint can be filed in writing or electronically.
  • The National Commission follows a similar procedure as the District and State Commissions, including issuing notices, referring matters for mediation, and conducting inquiries.
  • Appeals against the orders of State Commissions must be filed within 30 days of the order.

Reliefs:

  • The National Commission has the same powers as the District and State Commissions to provide relief to consumers.
  • It can also modify or set aside orders passed by State Commissions.

4. Mediation

Establishment of Mediation Cells:

  • Mediation cells are established at District, State, and National levels to facilitate the resolution of consumer disputes through mediation.

Mediation Process:

  • A consumer dispute can be referred for mediation if both parties consent.
  • The mediation process is conducted by trained mediators who facilitate discussions between the parties to reach a mutually acceptable solution.
  • If mediation is successful, the mediator prepares a settlement agreement, which is binding on both parties.
  • If mediation fails, the matter is referred back to the respective Commission for adjudication.

Conclusion

The Consumer Protection Act, 2019, provides a robust and efficient redressal mechanism through District, State, and National Commissions. It also introduces mediation as an alternative dispute resolution method to ensure quicker and amicable settlements. This comprehensive redressal mechanism empowers consumers to seek justice and ensures that their rights are protected.

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The Role of Consumer Organisations and NGOs in Protecting and Promoting Consumer Interests

Consumer organisations and non-governmental organisations (NGOs) play a pivotal role in safeguarding and promoting consumer interests. Their efforts ensure a fair, transparent, and ethical marketplace.

1. Advocacy and Representation

Consumer Voice:

  • Consumer organisations and NGOs act as the voice of consumers by advocating for their rights and interests. They represent consumers in various forums, including government bodies, regulatory authorities, and international organisations. Their advocacy efforts influence policy-making and ensure that consumer concerns are addressed in legislation and regulations.

Public Interest Litigation (PIL):

  • NGOs often file public interest litigations in courts to seek justice for consumers. These legal actions address issues such as unfair trade practices, defective products, and environmental hazards. By bringing such cases to court, NGOs protect consumers and promote accountability among businesses.

2. Consumer Education and Awareness

Awareness Campaigns:

  • Consumer organisations and NGOs conduct awareness campaigns to educate consumers about their rights and responsibilities. These campaigns use various media platforms, including television, radio, newspapers, social media, and public workshops, to reach a wide audience. Educating consumers empowers them to make informed choices and protect themselves from exploitation.

Educational Programs:

  • NGOs and consumer organisations collaborate with schools, colleges, and community centres to conduct educational programs on consumer rights. These programs include workshops, seminars, and training sessions that equip consumers with knowledge and skills to navigate the marketplace effectively.

3. Research and Publications

Surveys and Studies:

  • Consumer organisations conduct surveys and research studies to gather data on consumer experiences, market practices, and product quality. This research helps identify issues that affect consumers and provides evidence-based insights for advocacy and policy-making.

Publications and Reports:

  • NGOs publish reports, newsletters, and guides on various consumer-related topics. These publications provide valuable information on product safety, pricing, quality standards, and consumer rights. They also highlight case studies and success stories that inspire and inform consumers.

4. Redressal and Support Services

Consumer Help Desks:

  • Many consumer organisations operate help desks or call centres to assist consumers with their grievances. These help desks provide guidance on filing complaints, seeking redressal, and understanding legal rights. They also mediate between consumers and businesses to resolve disputes amicably.

Legal Aid and Counseling:

  • NGOs offer legal aid and counseling services to consumers who face challenges in seeking justice. They provide legal advice, assist in preparing documentation, and represent consumers in courts or consumer forums. This support ensures that consumers, especially those from disadvantaged backgrounds, can access justice.

5. Monitoring and Regulation

Market Surveillance:

  • Consumer organisations monitor market practices and conduct regular checks to ensure compliance with consumer protection laws. They identify and report violations such as misleading advertisements, substandard products, and unfair trade practices. This surveillance helps maintain ethical standards in the marketplace.

Product Testing:

  • NGOs and consumer organisations conduct independent testing of products to assess their quality, safety, and performance. The results of these tests are published to inform consumers and guide their purchasing decisions. Product testing also encourages manufacturers to adhere to quality standards.

6. Policy Influence and Lobbying

Policy Recommendations:

  • Consumer organisations and NGOs provide policy recommendations to governments and regulatory authorities. They participate in consultations, submit memorandums, and engage with policymakers to advocate for consumer-friendly policies. Their inputs help shape regulations that protect consumer interests.

Lobbying Efforts:

  • NGOs lobby for the enactment and enforcement of consumer protection laws. They build coalitions, mobilize public opinion, and engage with legislators to push for reforms. These lobbying efforts result in stronger legal frameworks that safeguard consumer rights.

Conclusion

Consumer organisations and NGOs play a crucial role in protecting and promoting consumer interests through advocacy, education, research, redressal, monitoring, and policy influence. Their efforts ensure that consumers are informed, empowered, and protected in the marketplace.

Upon Consumer court’s intervention, Shine Dry Cleaners agreed to
compensate Rs. 2,500 to Mrs. Mathur for the discoloured jacket.

(a) Which right was exercised by Mrs. Mathur at the first instance.

(b) Name and explain the right which helped Mrs. Mathur to avail the
compensation.

(c) State which consumer responsibility has been fulfilled by
Mrs. Mathur in the above case.

(d) State any other two responsibilities to be assumed by the consumers.

Ans.

Case Study on Consumer Rights and Responsibilities

Let’s analyze the case of Mrs. Mathur’s experience with the dry cleaner and the role of consumer rights and responsibilities.

(a) Right Exercised at the First Instance

Right to be Informed:

  • At the first instance, Mrs. Mathur exercised her right to be informed. She noticed the white discoloration marks on her jacket and informed the dry cleaner about the issue. This right ensures that consumers have access to essential information about products and services, enabling them to make informed decisions and seek redressal when needed.

(b) Right to Seek Redressal

Right to Seek Redressal:

  • The right that helped Mrs. Mathur avail compensation is the right to seek redressal. This right allows consumers to seek remedy for grievances arising from unfair trade practices, defective goods, or substandard services. When Mrs. Mathur did not receive a satisfactory response from the dry cleaner, she approached the consumer court for intervention. The court’s involvement ensured that she received compensation for the damage caused to her jacket.

(c) Consumer Responsibility Fulfilled by Mrs. Mathur

Responsibility to Speak Up:

  • In the given case, Mrs. Mathur fulfilled her responsibility to speak up. She voiced her concerns and complaints about the discoloration of her jacket to the dry cleaner multiple times. By doing so, she ensured that her grievance was acknowledged and addressed.

(d) Additional Consumer Responsibilities

  1. Responsibility to Be Aware:
  • Consumers should be aware of their rights and exercise them responsibly. They should stay informed about the products and services they purchase and understand the terms and conditions associated with them. Being aware helps consumers protect themselves from fraud and exploitation.
  1. Responsibility to Verify Information:
  • Consumers should verify the quality, quantity, and authenticity of the products and services they intend to purchase. This includes checking for necessary certifications, warranties, and expiry dates. Verifying information ensures that consumers make informed decisions and avoid potential risks.

Conclusion

Understanding consumer rights and responsibilities is essential for creating a balanced and fair marketplace. Mrs. Mathur’s case illustrates the importance of exercising the right to be informed and the right to seek redressal. It also highlights the responsibility of speaking up when faced with an issue. Additionally, consumers should be aware of their rights and verify information to protect their interests and contribute to a positive and equitable shopping experience.

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Anurag Pathak
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his Youtube channel for free lectures

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