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Centre urges States to adhere to the direct selling guidelines

The Ministry of Consumer Affairs, Food and Public Distribution has come out with the direct selling guidelines at the centre and some of the states have already adopted the same and many more states are going to follow them soon

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Avinash K. Srivastava, Secretary, Ministry of Consumer Affairs, Food and Public Distribution (MoCA) said that direct selling would have to be given greater thrust as it empowers women, MSMEs (Micro, Small and Medium Enterprises) and promotes manufacturing in India. Srivastava was addressing at FICCI DIRECT 2017, the annual flagship event for direct selling industry, in New Delhi today.

The senior bureaucrat highlighted the key initiatives undertaken by the ministry pertaining to the direct selling sector of the country. He said that direct selling companies need to keep a cap on the amount of commission being released to the direct sellers as this will ultimately benefit the consumers by providing them products at lower prices and will make the products more acceptable. Srivastava also highlighted that the ministry has come out with the direct selling guidelines at the centre and some of the states namely Sikkim and Chhattisgarh have already adopted the same and many more states are going to follow them soon. He added that an effective and time bound implementation of the guidelines would act as a growth stimulator for the budding Direct Selling industry.
 
He also highlighted the endeavours undertaken by the ministry towards the launch of the GST (Goods and Service Tax), wherein the ministry helped the sector to clear the piled up stocks by allowing the extension in the timelines to implement the stickering process for the pre-packaged commodities. Also, he urged the companies to register for the National Consumer Helpline (NCH) as this would facilitate to resolve the consumer grievances at a faster pace and make the sector more consumer centric.

Srivastava pointed out that the ministry is going to work towards the rules to govern the proceedings of the direct selling sector soon, and urged the inputs of industry towards the rules. He congratulated the direct selling industry for the efforts that they are putting in towards building the national economy and said that the sector is a major contributor towards the Indian growth story and promised to support the industry in addressing the hindrances and bottlenecks in due course of time. Also, he added that there is a huge opportunity that the industry raise in terms of pushing India towards the digital age.
 
During his address Praveen Khandelwal, General Secretary, Confederation of All India Traders (CAIT) said, “There is a growing need for the Indian Government to formulate a national policy on manufacturing and trade in the FMCG, Retail and e-Commerce sectors. The FMCG sector is currently plagued with business-related challenges including inadequate infrastructure, inefficiencies in the supply chain, a complex regulatory environment, shortage of skilled workers, inferior quality packaging and below standard connectivity. Therefore, in order to sustain growth in this sector, there is a dire need for a Central policy to regulate the activities of all the stakeholders—with a special emphasis on small traders.”
 
Khandelwal added that the passing of Consumer Protection Bill in the parliament would add more flavours to the development of the sector by reducing the mischief and Ponzi operators. He said that it is a delight to see the contribution of the sector towards women empowerment and the figures of more than 60% women workforce associated with the sector has been astounding. Khandelwal said that there is a need to convert the guidelines proposed for the direct selling sector into laws. He promised the support of CAIT towards the undertakings of the FICCI Direct Selling Taskforce in whatsoever ways possible.
 
Further Hem Pande, former Secretary, Ministry of Consumer Affairs said that the industry needs to work to make itself self-regulated which is a core concept of business functionality nowadays. He also added that the industry has huge challenges in terms of the competition it is facing from other sectors and urged for the need to garner the growth of the sector on core philosophy of building relationships and trust whether with the consumers or internally. He added that direct selling is in India’s DNA. The industry has a potential of growing from the current Rs 8,308 crore to Rs 64,500 by 2025, should the right regulatory environment be established.
 
Speaking on the occasion, Samir Modi, Founder & MD, Modicare presented the industry perspective and said the sector has immense potential in terms of the workforce that it trains and the job opportunities it generates. Modi congratulated MoCA for coming out with the much awaited guidelines for the sector and said that the guidelines would help in adding further value to the growth path of the industry. He said, “By 2025 the industry is expected to grow to Rs 72,000 crore from Rs 7200 crore in 2016 providing 1.8 million self-employment opportunity.”

On the occasion, Sergei Kanashin, Senior Vice President & Head of South Asia and Managing Director, Oriflame India pointed out the need to have minimum government interference in the sector which would add up more entrepreneurship. He also added that e-commerce is a growing competition that the sector needs to work towards by bringing in more efficiency in the operational modules.
 
Ambika Sharma, Director General, FICCI said “The Indian Direct Selling Industry is an important component of the Indian economy and acknowledging this, we at FICCI through our focused task force on direct selling is working dedicatedly towards the growth of this industry and seeking regulatory clarity for this new industry. FICCI is working closely with the Central and State Governments on the same and today’s conference is a step in that direction. I would like to congratulate MoCA for implementing the much awaited guidelines to govern the sector. I am certain that the effective enactment of the same would facilitate the further growth of the sector and act as a growth catalyst.
 
According to the FICCI-PLR Chambers Report released on the occasion “Ease of doing business in India – The way forward for the direct selling industry’’, the government of India has progressively liberalised and simplified policies and procedures to regulate and govern businesses in India. Despite these reforms, a typical direct selling company in India, depending on the nature of products and services, requires compliances to around 10- 12 policies and regulations, including state and local laws. Direct selling companies in general have opined that business regulations have improved on several fronts. However, the prolonged regulatory uncertainty, arising from the blanket application of the Prize Chits and Money Circulation Schemes (Banning) Act 1978 to the industry, poses serious challenges to the growth and investments in the industry.

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