Government is considering a regulator for the direct selling sector to safeguard interests of consumers by distinguishing between genuine and fraudulent players, Consumer Affairs Minister Ram Vilas Paswan said today.
An inter-ministerial committee has been formed comprising secretaries and is going to convene its first meeting on December 8 to look into this aspect, Paswan said at 'DIRECT 2014', a seminar organised by industry body Ficci on direct selling.
"We have recently formed an inter-ministerial committee to deliberate on the need and framework of regulations for the Direct Selling industry. Its first meeting will be held on December 8, whether here is need for separate regulator for the direct selling sector," Paswan said.
"I think the demand for regulator for direct selling sector is quite relevant and legitimate. We are considering it," he added.
Direct selling refers to offering goods and services to consumers outside of the fixed retail outlet channels through sellers who carry out business activities generally from their homes, workplaces and so on.
However, the minister cautioned: "There are dangers in the methods of direct selling, some companies are forming pyramid structure in the name of direct selling. Many such cases have come in light, where the consumers were cheated by the companies in the name of direct selling. They vanished overnight by collecting their money."
Speaking at the conference, Consumer Affairs Secretary Keshav Desiraju said that proposed changes to the Consumer Protection Act will strengthen consumer welfare.
"With internal trade falling under the Ministry of Consumer Affairs as per the allocation of business the Ministry seeks to play an important role in regulating activities which impact on consumers," Desiraju added.
Paswan also released the Ficci-KPMG report on direct selling industry in India and said that India has emerged as one of the biggest consumer markets in the world. In next one decade the demand of consumer goods in the country will increase by four times.
According to the report, in India the direct selling is estimated to be worth around Rs 7,200 crores and it has the potential to reach a size of Rs 64,500 crores by 2025.
The sector has the potential to engage over 10 million women as direct sellers by 2025, it said.