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Clamouring for Law to Regulate Direct Selling


The high pitch demand by the Direct Selling Companies for a separate law to regulate Direct Selling Business in the country has found favour across quarters, including experts and industry bodies. Confederation of All India Traders (CAIT), during the inter-ministerial meeting convened by Ministry of Consumer Affairs, called for a legislation to regulate the Direct Selling Business in the country. CAIT, in a statement released in November 2015, said that the Direct Selling Business in India is a source of self-employment and it should be regarded as a vertical of retail trade like e-commerce. The traders’ body also demanded that the Direct Sellers be given required facilitation to establish manufacturing plants across India as the Industry is growing at a phenomenal rate and has a huge growth potential. They said Direct Selling Business is a great promoter of women empowerment, with over 50 percent distributors engaged in Direct Selling Business being women. Indian Institute of Corporate Affairs (IICA), in a whitepaper on regulation of Direct Selling in India released in September 2015, too, advocated a separate regulation for the Direct Selling Industry in India. The whitepaper called for a mandatory registration process of the Direct Selling Firms by the proposed regulatory body, on the lines of mandatory SEBI registration for all schemes soliciting investments. It also sought a "clear definition of Direct Selling".

Telangana Civil Supplies Commissioner Dr. Rajat Kumar felt that the Direct Selling Businesses couldn’t get the required growth due to lack of clarity in law. While attending an event in Hyderabad on December 10, 2015 to release the Annual Survey Report 2014-15 on Indian Direct Selling Industry, he stated that the confusion of definition etc have actually killed the golden goose. He said that the Telangana Government will come up with a progressive policy soon.

Amitabh Kant, former Secretary of Department of Industrial Policy and Promotion (DIPP), Government of India, and CEO, Niti Ayog, too has come in support of the Sector stating that Direct Selling should not be equated with fraudulent Financial schemes and should gain government recognition and proper legislation. Speaking at a Direct Selling event organised by Federation of Indian Chambers of Commerce and Industry (FICCI) on December 8, 2015, Kant said that Direct Selling is a public business and called for increased government supervision and assistance in the Industry. "The government needs to be made literate about issues regarding Direct Selling," he said, adding that DIPP has already sent the draft guidelines on Direct Selling to the Department of Consumer Affairs.

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