Importance of Legal Metrology in the Economic System of Country
Legal Metrology has a wider scope and it plays an important role in almost every sector and even helps the government to take the various decisions. In this article we are going to discuss the importance of Legal Metrology and its contribution to the Indian Economic system, along with the relation between Indian Legal Metrology and Indian Economy.
Relation between economics and legal metrology
- Legal Metrology has built the confidence of the general public to use and to indicate the extent to which the technical requirements for consistency have been met first releases to the normative relationship between the dealer, manufacturer, Packer, import, business entities, and vendors with the customer or consumer. Whereas economics has written extensively about the importance of trust in an economic transaction and the two following quantum from the publication highlights aspects of this concept.
- Every commercial transaction has an element of trust which is certainly any transaction conducted over a period of time however it can be possibly argued that much of the economics backwardness in the world can be explained by the lack of mutual confidence now the trust is the important factor while dealing in the market which has been taken care by the legal metrology department.
- It is extremely efficient. It saves a lot of trouble to have a fair degree of reliance on other people’s words which means trusting the details given on the packages of the commodity and the product of the manufacturer or importer.
- If a consumer ever buys any product and has some doubt about the same, that ultimately means that he doesn’t have trust in the product or in the manufacturer which is ultimately going to harm the economic system of the country.
- Being a user of metrology, the state was also required to provide the necessary trust and confidence in measurement by mandatory standards and requirements. This ensured the integrity of commerce and was really required in state decreeing and enforcing measurement standards and equipment and controlling fraud in the market which has the direct connection with the economics as it is dealing with the economy and the power of the market in the country.
- In the history of Legal Metrology, it has been observed that the development was driven by the need of the state for information whereas the state was strong the need, particularly by the bureaucracy, was greatest and there was a strong commitment to the metrology system however the state declined metrology declined with it and over the centuries that national metrology system has been flowed with the power of the state.
Benefits of Legal Metrology to the Economic System
Legal metrology and the economic system of a country are parallel to each other as they support each other and protect the rights of the consumer and also keep the growth of the country in their mind. Legal metrology provides various benefits to the economic system of the country. Here we are going to tell you the relation between legal metrology and the economic system of the country as well as the benefits of legal metrology to the same. (Read also: Benefits of Legal Metrology Act)
Prediction of the consumer by legal metrology
Legal metrology specifically takes care of the measurement and the weights, and the goods packed by measure but generally replace number and simple measures as the basis of the transaction for a wide range of consumer commodities and products. The increase in the consistency of these measurements when adequately controlled has significantly reduced disputation and fraud on the other hand it increases the efficiency of the marketplace which has ultimately given the huge support to the economic system of the country while at the same time keeping the interest of the consumer at the safe side.
Reduced Disputation and Transaction Cost
Initially, the measurement was recognized as a provider of objective information and later on, when used in trade transactions where the measurement process lacked transparency there was an asymmetry of information between the trader providing the measurement and the trader accepting these measurements.
There was considerable scope of uncertainty, disputation, transaction cost, and market efficiency. These transaction costs can result from concern about the accuracy of measurement for example short measures and the inconsistency of measurement and paying more than the quantity the consumer is getting.
A typical example of trade measurement transaction that may lack transparency and are difficult to check are given below:
- Sale of alcohol where stamped glasses are not used.
- Utility measurements status electricity, water, and gas.
- Sale of firewood.
- petroleum sales to service stations and motorists.
- Billing of telephone calls.
- Sale of grain and rice by farmers based on moisture measurements.
Effective Stock Control
The aggregate of trade measurement by individual business provides accurate and effective stock control to facilitate the ordering of new stock.
This is a spillover benefit of the trade measurement system and the economic system of the country by the legal metrology.
Legal Metrology for Commerce
The metrological system ensures Fair Trading by eliminating the use of short measures to obtain commercial advantage over competitors in the marketplace.
Legal metrology through the pattern approval and certification eliminates the manufacture and sale of many trade measuring instruments that are not fit for purpose and would not meet intentionally recognized standards.
Legal metrology to protect the interests of the consumer
Legal metrology aims to protect the interests of the consumer and the measurement and goods banned by measures has generally been replaced by numbers and simple measures. The basic transaction for a wide range of consumer commodities and products the increased consistency of measurement and adequately controlled has significantly reduced disputation fraud and increased the efficiency in the marketplace.
Legal Metrology Helps in Control the Fraud
Legal metrology plays a great role in controlling fraud which provides a huge advantage to the economic system of the country. It also controlled fraud in the marketplace by estate inspection, and stock control by measurements can also provide effective fraud control for individual businesses.
It has the pattern approval and certification which ensures that the design of the measuring instrument does not facilitate fraud and can stop the dealer from committing any kind of offence under the act.
Legal Metrology for the Commodity Export
- Import and export play a great role in the economy of the country and export income from the sale by the measure of bulk and pre-packaged commodities is a significant component of both export and national income for many nations.
- Developing countries have even greater concern in the trade contracts to meet the short measure requirements of trade contracts, commodity export countries give away value to the extent of the uncertainty of the measurements.
- The Asia Pacific legal metrology forum has also expressed concern about the use of draft surveys for commodity export rather than the more accurate weighing and measuring system fully.
- Importance for commodity dependent countries to develop an adequate measurement system for accurate valuation of goods.
- Often for reasons of jurisdiction or lack of technical capabilities these measures are not methodologically controlled by the state with a consequent risk of loss of income. Here the OIML international recommendation plays an important role to tell the various countries how to deal with the legal metrology problem, indeed different countries.
State Meteorological System
- The state metrological compliance system was developed to provide legislative requirements, confidence, and trust in the measurements and to minimise the disputation and transaction cost as well.
- The central role of the estate in setting rules was emphasised by the World Bank in its 1997 world development report on the estate in a changing world.
- Elements of this system include the pattern approval of measuring instruments to ensure they were fit for purpose and third-party auditing and inspection of an instrument to ensure accuracy and to detect the fraud.
- However, it can be seen in the recent years that a number of governments in the developed countries have reduced their commitments to their legal metrology system and also, they have placed greater reliance on the market to resolve measurement disputes.