Regulator planned for direct selling sector: Paswan

Aiming to safeguard interest of consumers, the government is mulling a regulator for the direct selling sector, Consumer Affairs Minister Ram Vilas Paswan said here Thursday.

The ministry of consumer affairs, food and public distribution has convened an inter-ministerial meeting network to discuss entire gamut of direct selling as there is need to evolve a very transparent and consumer friendly business model for the sector, he said at 'DIRECT 2014' organised by industry body Federation of Indian Chamber of Commerce and Industry (FICCI).

Paswan said the inter-ministerial committee will have its first meeting Dec 8 where it will be decided whether there is a need for separate regulator for the direct selling sector.

"We feel it is important to distinguish between the genuine and fraudulent players, and any regulation that is proposed should keep in mind the interest of consumers as the first priority. I think the demand for regulator for direct selling sector is quite relevant and legitimate. We are considering it," he said.

Direct selling is a fast growing sector especially in the Asia Pacific region and India is a big consumer market.

"I am aware that there have been many different business models adopted by the direct selling companies but in their garb fly-by-night operators have actually done frauds with innocent consumers in the country in absence of awareness and strict norms adopted by the industry itself," Paswan added.

The FICCI-KPMG report on direct selling industry in India stated that it has the potential to provide self-employment to 18 million. The report indicated that with the right policy stimulus, this industry might well reach its potential of Rs.64,500 crore, a nine-fold increase in 12 years.