7.3.18

State govt issues guidelines for direct-selling

The Andhra Pradesh government on Thursday notified the direct-selling guidelines, putting in place a predictable regulatory environment for the industry.

“The notification would result in policy pragmatism, ease of doing business (EoDB) and will be a major boost to the Rs 10,000 crore direct-selling industry in India,” a government statement said.

It says that South India accounts for a fourth of the direct-selling industry, and Andhra Pradesh’s entrepreneurial ethos makes it an important state for direct-selling entities.

“The government of Andhra Pradesh has adopted the Centre’s draft guidelines as final norms for direct-selling business. Andhra Pradesh was part of the inter-ministerial committee established by the Government of India for establishing direct-selling guidelines,” the release said.

The direct-selling industry in India has not witnessed large-scale participation owing to lack of regulations in the industry, it said. “These direct-selling guidelines would provide the required fillip to the direct-selling industry in India and the ‘Andhra Pradesh Direct Selling Guidelines Order 2017’ provides for a framework for compliance for direct-selling entities to ensure consumer protection and safeguard against potential fraudulent activity,” the release said.

The Andhra Pradesh government is also setting up a mechanism to monitor and supervise the activities of direct sellers and direct- selling entities regarding compliance of the guidelines.

J Krishna Kishore, chief executive officer, Andhra Pradesh Economic Development Board, said, “The notification of guidelines provides the policy pragmatism and a predictable regulatory environment for the direct-selling industry and Andhra Pradesh is poised to lead efforts in furthering investments and job creation in the sector.”

Leena Jaisani, assistant secretary general & head FICCI - Retail, FMCG, Direct Selling and E-Commerce, remarked, “Indian direct-selling industry is an important component of the Indian economy and acknowledging this, we at FICCI through our focused task force on direct-selling is working dedicatedly towards the growth of this industry and seeking regulatory clarity for this new industry.”

“FICCI is working closely with the Central and state governments on the same and I would like to congratulate the Government of Andhra Pradesh for implementing the much-awaited guidelines to govern the sector. I am certain that the effective enactment of the same would facilitate the further growth of the sector and act as a growth catalyst in the state,” she added.

Direct-selling is a heavy employment-generating industry with an estimated 50 lakh entrepreneurs engaged in the sector in the country. The number is expected to increase to 1.8 crore entrepreneurs by 2025.

In terms of gender-parity, direct-selling industry plays a critical role in empowering women by offering an opportunity for generating income and acts as an alternative for those desirous of earning flexible income-earning opportunities. The notification from the Government of Andhra Pradesh will not only play a key role in entrepreneurship through self-employment but also have a multiplier effect on the GDP growth rate of the economy.

Sikkim, Chhattisgarh and Telangana have already notified the guidelines and Maharashtra is in the process. Being a state subject, direct-selling industry is regulated by the Ministry of Consumer Affairs at the Centre and the ministries concerned in respective states for consumer protection.

REGULATORY ENVIRONMENT FOR INDUSTRY

* Major boost to the Rs 10,000 crore direct-selling industry in India

* AP Direct-Selling Guidelines Order 2017 provides for a framework for compliance to ensure consumer protection

* State govt setting up a mechanism to monitor and supervise the activities of direct sellers

* Direct-selling is an employment-generating industry with 50 lakh entrepreneurs engaged in it

* The buissnes plays a critical role in empowerment of women

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