FDSA favours central law

New Delhi:The FDSA welcome the decision of central government that Government has set up an InterMinisterial Committee for considering the requirement of separate legislation in respect of Direct Selling / Multi Level Marketing.

Mr. A P Reddy, President, FDSA(Federation of direct selling industry) said that Mr. Ram Vilas Paswan, Minister of Consumer Affairs, Food and Public Distribution, during the course of the programme ‘DIRECT 2014’ organised by industry body FICCI and consulting firm KPMG here at New Delhi on December 4,informally revealed to him that the government would soon come up with specific guidelines to the industry, ahead of the amendments to the PCMCB Act and the Consumer Protection Act of 1986.

He said they would be doing so in the best interest of the consumer and to protect him from the fraudulent companies that work under the garb of direct selling. The guidelines to the industry can be expected by February or March 2015, Mr. A P Reddy said.

Meanwhile, speaking at ‘DIRECT 2014’ the Minister said, “Protection of consumer rights is very important to us. From ‘Peon to the President’ is a consumer at one point of time or the other in their lives”.
Mr. Paswan said, “We have taken note of what the
industry has been asking for long, and the internal
committee, which is working on this, will have its first meeting on December 8. We’ll look into this and take call, after consultation and inputs from all stake holders of the industry.

We have already received some valuable suggestions. We feel it is important to distinguish between the
genuine and fraudulent players, and any regulation that is proposed should keep in mind the interest of consumers as the first priority. I think the demand for a regulator for direct selling sector is quite relevant and legitimate. We are considering it”.

According to the KPMG-FICCI estimates, the direct selling industry in India with the right policy stimulus,this industry might well reach its potential of Rs. 64,500 crore from about Rs. 7,200 crore at present, a nine fold increase by 2025. The industry has the potential to provide self-employment to 18 million while about 60 per cent of this would be women, it added. Globally, the direct selling industry is estimated at over 100 countries with a market size of $167 billion.

The report underlined and highlighted the importance and activities of FDSA and stated that FDSA is formed with an aim to provide stability and organised the direct selling industry in India. The necessity for such an action was felt as the ponzi schemes/money
circulation schemes that were on the rise and started eroding the distinguishing line between direct
selling and money circulation schemes.

The report further stated that FDSA has been formed not only with an intention to bring about awareness
on what direct selling is about but also to protect it from various quarters of the economy. The primary objective of FDSA is to work towards bringing direct selling into acceptance by the media, the authorities and as well as the general public.It also said that FDSA is vested with various powers involving:

* Coordinate with membership companies for business discipline,collecting data on monthly basis
regarding the new products,distributors enrolled, turnover of sales and tax contribution to the Government to estimate the industry volume and potentiality.

*Act as a watch dog for all irregular business practices (nonmembers & membership
companies of FDSA).

*Coordination with various government departments to seek privileges & preferences for industry
growth, positive identity.

*Act as the Grievance Redressal Mechanism for the distributors/members of the FDSA membership
companies.

•*FDSA has regional representation bodies to lead and
handle the companies in that particular jurisdiction.

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