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FDCI files petition praying for a legislative framework for DS/MLM industry in India

A legislative framework will safeguard the interests of genuine organizations and also help distinguish them from fraudulent ponzi and pyramid schemes that operate under the garb of DS/MLM companies.

December 18, 2013 10:40 IST | India Infoline News Service

The Forum for Direct-Selling-Companies and Consumers of India (FDCI), first industry body to have representations from amongst all the stakeholders in the DS/MLM Industry has petitioned the President of India and the Central Government to usher a clear legislative framework for the Rs 20,000-crore DS/MLM industry which offers full/part-time income opportunity to over 7 crore Indians today in the country.

 

A legislative framework will safeguard the interests of genuine organizations and also help distinguish them from fraudulent ponzi and pyramid schemes that operate under the garb of DS/MLM companies.

 

In a petition addressed to the President, Pranab Mukherjee, the Prime Minister, Dr Manmohan Singh, Home Minister Sushil Kumar Shinde and the Finance Minister P. Chidambaram, the FDCI has also urged immediate intervention to protect genuine DS/MLM companies from the mischief of ‘Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS)’ by excluding from its purview genuine companies that have been operational in the country for over 10 years now. Despite various initiatives to amend the said Act and remove from its purview genuine product-sales based DS/MLM companies, the said Act continues to bring under its mischief genuine DS/MLM companies and authorities, in the absence of a clear legislation are unable to distinguish genuine companies from fraudulent ones and many times end-up harassing genuine companies and their representatives.

 

PA Joseph, General Secretary FDCI, said, “The Indian Direct-Selling Industry needs legislation today more than it ever did before. There are more fraudulent ponzi schemes operating today in the garb of DS/MLM and in the lack of clarity at legislative level, it is only getting tougher for genuine companies to differentiate themselves. The last two years have seen a steady dip in the overall industry performance, which has otherwise grown consistently in India and we believe this is principally because of the ambiguity that shrouds the industry currently. Amway CEO was recently arrested in Kerala and QNET faces probe in Maharashtra. RCM survived a nearly fatal probe in Rajasthan with similar stories for other DS/MLM in various states.”

 

FDCI in its online petition stated various other unique benefits of the industry as hereunder.

  • Supports 7 Crore Indians + Families: Even in urban areas, Direct Selling is one of the most engaged supplementary income business opportunities for Indians. Approximately 7 crore Indians are estimated to be full /part-time involved in this business for augmenting or fully supplying their household incomes
  • Open: Direct Selling does not require specialized experience, skills or language familiarity as one operates within their own community.
  • Grass Root Employment Opportunity: Direct Selling is one of the very few options of self-employment in situations where traditional industry and employment options are not available.
  • Women Empowerment: Many unemployed Indian housewives engage in this industry (though there are still more men than women in India engaged in this business model as of now).  Research indicate that lack of a legislative framework has been the biggest deterrent for more women entering this industry as they don’t feel safe given the random and arbitrary arrests of its members by police.

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