The Indian Direct Selling Association (IDSA) has expressed fears that a new legislation being formulated to regulate multi-level marketing companies (MLMs) in the state will affect the interests of genuine direct-selling companies.
Chavi Hemanth, IDSA secretary-general, said for several years the IDSA had been maintaining that the state government was supportive, but the fact remains that the industry is facing several problems for its survival.
He said that though the draft Bill is meant to check fraudulent financial operators, which function as direct-selling companies, the draft is very rudimentary and does not incorporate the fundamental principles of direct-selling business model.
Significant barriers have to be overcome in the direct-selling sector as lack of clarity hinders its growth in the country.
Amarnath Sengupta, IDSA chairman, too said the draft Bill will not protect the interests of genuine direct-selling companies and its distributors.
“Therefore, there is an immense need to provide a regulatory framework to facilitate the different facets of direct-selling industry, including consumer, direct seller, direct-selling entity, and to prevent unscrupulous elements.
“We are continuously in touch with the government aiming that the final legislation which comes out is an exhaustive and comprehensive solution,” Hemanth said.
In order to create a conducive environment for the efficient operation of genuine direct-selling companies, the government needs to play a crucial role.