Bengal, Maharashtra, Kerala, Andhra Pradesh and Telangana are growing good. The industry contributes to the society and the government exchequer

Transcription

1 W ith the new year 2016 just round the corner, it would very much become a breakthrough year for the Direct Selling industry! The much awaited guidelines on Direct Selling industry are awaiting the final nod from the Department of Consumer Affairs and are likely to be announced any time now. Experts projected Direct Selling may touch a whopping INR 645 bn by the year Direct Selling is going to boom. Announcing this at the FICCI (Federation of Indian Chamber of Commerce and Industry) organised DIRECT , a annual event on Direct Selling Industry at K K Birla Auditorium, FICCI, New Delhi on December 8, Mr. Amitabh Kant, Secretary, Department of Industrial Policy and Promotion, participating as Chief Guest, said that the draft guidelines have already been forwarded to the Ministry of Consumer Affairs and a formal approval is only needed to announce them. He urged the Ministry of Consumer Affairs Department to expedite the issue of guidelines so that the industry would get immediate relief from the law enforcing authorities and create conducive atmosphere to direct sellers. The guidelines would help all the concerned officials to become literate about the direct selling industry and distinguish between genuine direct selling companies and the fraudulent ones, operating ponzi schemes. This industry is very important because it creates jobs and large scale employment. If India has to grow rapidly at 9-10 per cent, the key challenge is to create jobs and this industry does it effortlessly. Further, it also empowers women. You are all part of 'Make In India' story and are making India. You

2 are also helping to boost MSME sector", he said. Emphasising that India is a very major hub for direct selling and would continue to be, he pointed out that direct selling is very different from ponzi schemes. "Tax and police officials lack understanding about it. You need to make the government literate about it. You are going to boom. It is a legitimate business creating jobs and pushing MSMEs. The States must clearly be told that there are guidelines. The guidelines will be issued shortly", he said. "We are pushing for ease of doing business. We know business is going to create jobs and only by creating jobs India can grow rapidly. Direct Selling means creating jobs", he said. Asser ting that Direct Selling will be an important channel contributing to the nation's growth, he said, "Direct Selling is practiced in more than 170 countries globally. A healthy mix of direct selling and e-commerce would give the required momentum to India's growth and we are pushing for clarity on this issue. It is not possible for anybody to stop technology. We should use technology to leap from. The biggest transformation is taking place in the Country. The population in India is getting younger and by 2040 it would be a young India. India will become a middle class economy and 50 per cent of the Indian economy will be driven by middle class by 2040", he opined. "The draft guidelines have already been sent to the Department of Consumer Affairs and I wish they would be announced soon", he said. Earlier, Dr. A Didar Singh, Secretary General, FICCI in his welcome address said that the whole world is now looking at India. "The response to 'Make In India' concept is tremendous. New ways of marketing like e-commerce and direct selling are foraying into the market. Direct Selling brought employment potential to the Country. The kind of support that we got from the government is very high. You are representing the market directly", he said. Mr. Rajat Wahi, Partner, KPMG, while presenting a report 'Direct Selling - Mapping The Industry Across Indian States', said that the Direct Selling industry has the potential to reach INR 645 billion by the year "Delhi continued to grow fast at 60 per cent, while Assam grew at 46 per cent and Punjab grew at 38 per cent. While Gujarat is also registering fast growth, West

3 Bengal, Maharashtra, Kerala, Andhra Pradesh and Telangana are growing good. The industry contributes to the society and the government exchequer through taxes. This is just another channel of distribution", he said. "While other industries are trying to resist the implementation of Acts and guidelines set by the government, this industry is crying for guidelines, sector specific legislation and the amendment of the PCMC (B) Act", Mr. Rajat Wahi pointed out. Mr. Praveen Khandelwal, while lauding Mr. Amitabh Kant for understanding the subject well, said, "Direct Selling is a big business. It is a integral vertical of retail trade. The Direct Selling companies or distributors should not be harassed or victimised". Mr. Bejon Misra, Founder, Consumer Online Foundation, sharing his views on the subject said, "Guidelines on Direct Selling will make a pathway as it would provide clarity to some extent which is lacking at present. We must have an exclusive law for Direct Selling. If not in this session, at least in the budget session of the Parliament, we need to get a law. Can we prepare a draft bill and present it to the government for enactment". Mr. Zakir Hussain, Director (Internal Trade), Ministry of Consumer Affairs, Food & Public Distribution, speaking on the challenges that the industry is

4 facing and the solutions being worked out at the government level, said that it became very important to the government to protect the consumer. "The Inter Ministerial Committee formed to frame the guidelines for Direct Selling industry had recently met and finalised the guidelines. We will see the effectiveness of the guidelines and then we will decide on legislation. We want to go step by step. We are not closing the issue by framing guidelines. We are providing the guidelines only as a interim relief to the industry. We are working and protecting the industry", he said. He emphasised, "There is great energy in this industry and I assure you to clear the hassles as early as possible". Meanwhile, Dr. Vijay Kumar Singh, Head, School of Corporate Law, Indian Institute of Corporate Affairs, who had published a 'White-paper on Regulation of Direct Selling In India', said that the absence of regulation played a critical role in receding this industry. "The PCMC (B) Act is being wrongly applied to this industry. When PCMC (B) Act is formed, Direct Selling was not there in the Country. It should be observed here that 'Prize Chits' do not have any products. But, in Direct Selling, you sell products. The law enforcing authorities could not differentiate between legitimate and illegitimate companies and that is where the problem lies. My submission is that you need to have a special legislation for this industry. However, issuing guidelines is a welcome step and efforts to get the law enacted should continue", he opined. Mr. Suhan Mukerji, Partner, PLR Chambers, sharing his opinion said that the PCMC (B) Act is a very ambiguous law. "Under-trained law enforcing authorities are confused about the direct selling industry. The industry is self reliant. We need to have a 'stand alone' legislation on Direct Selling. Industries with 'stand alone' laws have always flourished", he observed. He was of the opinion that guidelines will not stop the harassment being meted out to genuine direct selling companies and a 'stand alone' law is very much essential. Mr. Amb Richard Holwill, Member, WFDSA Regulatory Affairs Committee, said that the direct selling industry is highly field oriented and is beneficial to all. "This industry needs definitions that reflect local concerns. They lead to consistency in regulation of the industry. Without regulation it is very hard to move from one point to another", he said adding, "I want to see India lead and India will lead if legislation is made". Ms. Annna Liberg, Trade Commissioner to India,

5 Business Sweden - The Swedish Trade & Invest Council, said that initially direct selling was not having good reputation in Sweden, but it has changed over time. "Today, direct Selling is playing a major role in Swedish economy. You are adapting a healthy process in creating a policy by involving all the stake holders. The potential of this industry is very great", she said. Mr. James Raphael, COO & Senior VP, RASCI (Retailers Association of Skill Council of India), said, "Wherever there is life, there is consumption and wherever there is consumption, there is retailing. The medium to reach consumption is only incidental. Direct Selling is nothing but a medium and an integral part of the society". Earlier, Mr. Anshu Budhraja, CEO, Amway India, and Mr. T C Chhabra, Managing Director, RCM Business briefed on their respective company's contribution to the nation's development. They expressed confidence that proper guidelines would be released soon. They wanted the guidelines to be clear and without any confusion. They thanked FDSA & FICCI for helping the industry at a very crucial stage. They said Direct Selling has the potential to change the destiny of India. Ms. Shilpa Gupta, Head, Retail & FMCG, FICCI while thanking everyone for their cooperation said, "The policy makers are listening to us now and therefore you are getting the guidelines. The guidelines will act as a symbol of positiveness and will take us closer to getting the final thing". Earlier, Mr. Rajat Banerji, Chairman, Direct Selling Task Force, FICCI, acted as the moderator for the first session - Direct Selling for the Indian Economy. For information on activities of FDSA (Federation of Direct Selling Association) and other related activities, visit: