Direct selling has made significant contribution to growth: consumer deptt

Says will engage with dept of financial services to clear all doubts about this sector

As the government grapples to distinguish between genuine and fake direct selling companies, the Department of Consumer Affairs today put its weight behind direct selling and multi-level marketing industry, saying that the government is concerned about the well-being of direct sellers and admire their contribution to economic growth.

“The department has once again started the process of defining what exactly constitutes genuine direct selling companies from the fake ones and the tenure of the Committee looking into that has been extended. Once the committee gives its report by the end of this month, we would either present it to the minister or frame a cabinet note for the same.” Pankaj Agarwala, secretary department of consumer affairs said. 

He was speaking at seminar on direct selling organised by Ficci and Indian Direct Selling Association (IDSA)

Few months back, the department of consumer affairs extended the term of the inter-ministerial committee on direct selling, multi-level and network marketing committee till April 30, 2013.

The panel will now look afresh at what exactly defines multi-level marketing (MLM), lay down clear guidelines on what distinguishes a network, multi-level marketing and direct selling company from those indulging in money circulation activities and unlawful activities

According to industry estimates, the Indian direct selling industry had a turnover of Rs 6,385 crore in 2011-12, it is expected to scale upto Rs 10,844 crore by 2015 and Rs 34,000 crore by 2020.

Agarwala said the ministry would emphasize on encompassing the aspects of Money Back Guarantee, Cooling off period and return policies especially in the service sector  in the National Consumer Policy so that there will be credibility in the market for the direct selling industry.

On re-starting futures trading in pulses, which has been banned since the last 3-4 years, Agarwala said that government had no plans to restart futures trading in pulses, which is banned for last four years as the market does not have enough depth.

On futures trading in guar, Agarwala said commodities market regulator, Forward Markets Commission (FMC) would take a final call on when to restart the futures.