The need for the creation of the Consumer Protection Act, 1986 arose due to the following reasons:

1. Business is a means of human welfare : Business is a part of society. That's why it is its religion to serve a large section of the society i.e. the consumers. In fact, the welfare of the business lies in the service of the consumer. Neglecting the interests of the consumers is the death of business.

2. Development with Social Justice : Our constitution declares that India is a socialist, secular, democratic state. The cornerstone of our economic philosophy is development with social justice. Hence exploitation of consumers is against our Directive Principles and Policies.

3. Single Vs. Multi Purpose Business : The responsibility is towards different people. Consumers are the main among them. Business is both a social and an economic institution. So profit making is not the sole objective of business. Business, being a part of the society, cannot ignore the important part of the society, the consumers.

4. Ignorance of the consumers : Generally the consumers are innocent and ignorant. They do not have knowledge of the type of object, its elements and characteristics. These things can be bad, substandard and fatal to health. Therefore it is the responsibility of the administration to protect the interests of the consumers.

5. The principle of 'buyer beware' is out of date : earlier it was thought that the seller is unscrupulous and evil. Therefore, it is the responsibility of the buyer to be smart and alert himself and not give an opportunity to the seller to cheat him. After the industrial revolution, there has been a change in the environment. Division of labour, specialization and mass production have taken place. Consumer prudence has been replaced by consumer dominance. Theoretically the consumer's empire has been accepted, but practically the consumer is the victim of exploitation of the production.