The Indian Direct Selling Association has submitted a draft proposal for legal framework guidelines to the Kerala Government, in an attempt to create awareness and set up a new set of rules.

The proposal demands setting up a direct selling entity which should be a body corporate with a minimum paid up capital of Rs 1 crore.

The draft also wants the pyramid scheme prohibited: no person shall promote or conduct any pyramid scheme, or enrol to any such pyramid scheme or knowingly participate in it otherwise, or receive or remit any money in pursuance of such pyramid scheme.

The guidelines also focus on the relationship between direct selling entity and direct seller. It also specifies penalty clauses for contravening the proposed act.

IDSA Secretary-General Chavi Hemanth stressed on the importance of creating a strong regulatory framework for the industry and designing a clear government policy to support genuine direct selling companies. The draft guidelines seek to protect, regulate and assist the industry and harness the economic potential that it truly holds.

She said that the State Government is working in a proactive manner to come up with such policy framework.

They have considered this matter on a priority basis as they are aware of the concerns raised by Indian Direct Selling Association, she said.

A high level delegation led by the Secretary-General met the State Chief Minister and the State Finance Minister and apprised them of the prevailing conditions and potential of direct selling in the country.

Quoting a recent survey, IDSA Chairman S. Subramanian said that the Indian Direct Selling Industry is estimated to double by 2014-15, reaching up to Rs 108.4 billion from the current level of Rs 52.3 billion in 2010-11. The industry is slated to grow at an average of more than 20 per cent in the next four years.

>sajeevkumar@thehindu.co.in

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