Direct selling industry asks govt to frame separate regulation

In a bid to welcome the formation of inter ministerial committee to look into the direct selling issues, the industry has asked the government to frame a separate regulation after consulting all stakeholders in a time-bound manner for the sector, says a PTI report.

Besides, the India Direct Selling Association (IDSA), which falls under the Prize Chits & Money Circulation Schemes (PCMCS) (Banning) Act, has demanded for a separate legislation for the industry.

Commenting on the matter, IDSA Secretary General Chavi Hemanth said: "We welcome the much awaited action taken by the government. We hope the government will draft an inclusive legislation in consultation with the industry stakeholders. We expect the government to give out time-bound legislation."

Offlate, Raosaheb Patil Danve, MoS Consumer Affairs, Food and Public Distribution has informed Parliament that the government has set up an inter ministerial committee to consider separate legislation for direct selling/ multi-level marketing companies.

"At present, in the absence of any separate regulatory framework business models like direct selling/ multi-level marketing come under the purview of the PCMCS Act administered by Department of Financial Services," he added.

He further added, 'It has been suggested that instead of incorporating theses models into the PCMCS Act, the need for a separate legislation may be examined by Department of Consumer Affairs in consultation with all stakeholders concerned including global practices in operation.'

Besides, the committee will monitor the nature and growth of direct selling firms and their features that distinguish the above models of business strategy from Pyramid, Money Circulation Schemes.

As per the report, the association is contending that direct sellers are harassed by the authorities under PCMCS Act as the present act does not distinguish between the genuine and sham firms.