IDSA favours central law to regulate direct selling

Hyderabad:The Indian Direct Selling Association representing 19 entities such as Amway, Tupperware and Oriflame is hopeful of a Central law to regulate the industry to materialise shortly with the Union Ministry of Consumer Affairs setting the process in motion.

A uniform regulatory mechanism, IDSA secretary general Chavi Hemanth says, becomes necessary for the industry as also thousands of people, including women, who earn a livelihood as direct sellers to smoothly conduct business. It would also help weed out “fraudulent operators”, she said, adding that the Ministry was working on such a legislation. “First step would be a law, followed by a regulator [agency],” she said. An inter-ministerial group has also been constituted, she said, even while underscoring the need for the proposed legislation to make the direct sellers accountable for their actions too as “they are finally benefiting from the business opportunity.”

Financial pyramid scheme operating under the garb of direct selling was the biggest challenge, she said, pointing how the members felt that uncertainty in the policy was leading to their harassment. Exclusion from the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, under which (criminal) cases had been lodged against some of the entities in many States, is another demand of the industry.

Ms.Hemanth was addressing presspersons along with PHD Chamber of Commerce & Industry chief economist S.P.Sharma about the 2013-14 annual survey of the Indian direct selling industry. Prepared by the Chamber, the survey cited regulatory bottlenecks as reasons behind decline in the growth levels. Last fiscal, total sales were Rs.7,472 crore up from Rs.7,164 crore in 2012-13. In 2011-12, the industry clocked Rs.6,385 crore revenues.

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