Welcoming the formation of an inter ministerial committee to look into their issues, direct sellers have asked the government to frame a separate regulation after consulting all stakeholders in a time-bound manner for the sector.
The India Direct Selling Association (IDSA), which falls under the Prize Chits & Money Circulation Schemes (PCMCS) (Banning) Act, has been asking for a separate legislation for some time.
"We welcome the much awaited action taken by the government. We hope the government will draft an inclusive legislation in consultation with the industry stakeholders. We expect the government to give out time-bound legislation," IDSA Secretary General Chavi Hemanth said.
Last week, MoS Consumer Affairs, Food and Public Distribution Raosaheb Patil Danve has informed Parliament that the government has set up an inter ministerial committee to consider separate legislation for direct selling/ multi-level marketing companies.
"At present, in the absence of any separate regulatory framework business models like direct selling/ multi-level marketing come under the purview of the PCMCS Act administered by Department of Financial Services," he said.
It has been suggested that instead of incorporating theses models into the PCMCS Act, the need for a separate legislation may be examined by Department of Consumer Affairs in consultation with all stakeholders concerned including global practices in operation, he added.
The committee would examine the nature and growth of direct selling firms over the last five years and their features that distinguish the above models of business strategy from Pyramid, Money Circulation Schemes.
This year Amway Managing Director & CEO William S Pinckney was arrested under the PCMCS Act and the IDSA had contended that it was due to lack of clarity in the policy.
The association is contending that direct sellers are harassed by the authorities under PCMCS Act as the present act does not distinguish between the genuine and sham firms.