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Indian Direct Selling Association (IDSA) has stressed the need for a regulatory framework that can ensure transparency in operations and help harness the potential of the sector.
The demand was aired at the first ‘knowledge forum,' first in the State, held here with a view to enabling the public make a distinction between a legitimate direct selling company and financial pyramid schemes.
DEEP CONCERN
IDSA is ‘deeply concerned' about the mushrooming of dubious and fraudulent money circulation schemes operating under the garb of direct selling/multi-level marketing opportunities, the like of which have been reported from within the State in recent times.
Mr Yoginder Singh, Chairman, and Ms Chavi Hemanth, Secretary-General, IDSA, addressed the knowledge forum held here.
According to Ms Hemanth, the academic report on ‘Socio-economic impact of the direct selling sector' by Delhi-based think-tank ICRIER (Indian Council for Research and International Economic Relations), has brought to light the fact that there is no clear and holistic definition of direct selling in India. As a result, the classification of direct selling is also unclear. Mr Singh said that the report indicated that there were several barriers which restrict the growth of this sector.
GOVT INTERVENTION
Some of them are best addressed by the direct selling companies themselves; the others warrant immediate Government intervention.
The ICRIER report had also cited the fact that in spite of the large number of regulations, the direct selling sector in India is not bound by a comprehensive legislation as is the case in Singapore or Malaysia.
In the UK, it is covered under some specific laws of the country while in the US, certain States have laws governing direct selling.
The Prize Chits and Money Circulation Scheme (Banning) Act, 1978, which is sometimes cited for regulating this sector, is not applicable to direct selling and is outdated, the report said. Direct selling in India has maintained a strong trajectory of growth, touching sales volume of Rs 4,120 crore in 2010, registering a robust 24 per cent growth year-on-year.
The industry supports approximately 30 lakh independent sales consultants of which around 70 per cent is women, Ms Hemanth said, and added that this demonstrated its contribution to female empowerment.
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