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'Small Entrepreneurs And Self-employed Will Benefit Immensely From New Direct Selling Guidelines'

BW Businessworld’s Clifford Alvares spoke to Zaheer Merchant, Director of Corporate Affairs at QNet on the direct selling guidelines that have been recently issued by the Ministry of Corporate Affairs and also the road ahead for direct selling

India is a country of a billion plus people and the biggest problem is to generate employment. The direct selling industry is playing a major role in creating avenues of income for those seeking self-employment with over a billion dollars in revenues being generated currently.

BW Businessworld’s Clifford Alvares spoke to Zaheer Merchant, Director of Corporate Affairs at QNet on the direct selling guidelines that have been recently issued by the Ministry of Corporate Affairs and also the road ahead for direct selling.

Excerpts:

What do you think is the contribution that the direct selling industry is making towards generating employment?

India is a huge country with immense talent and a younger population. However, creating employment for all those joining the work force year after year is a challenge. This is where the direct selling industry has come to play a role. It has created avenues of income generation for those who have an entrepreneurial mindset. Small entrepreneurs and self-employed will benefit immensely from the new direct selling guidelines which have been issued recently as it structures the industry within a regulatory framework.

What according to you are the remedies necessary to set right all apprehensions about the direct selling business in India?
There is an urgent need to create a legal framework based on the Direct Selling Guidelines issued by the Central Government's Ministry of Corporate Affairs. The states need to adopt these and as suggested by the Centre draw up a framework to make it as effective as soon as possible. Additionally, all legitimate companies in this industry need to ensure they put in proper checks in place to prevent misselling and misrepresentation. The government and the industry need to work closely to ensure a sustainable and healthy growth environment. Education is the key, as I have always believed.

How do you see the new regulations impacting the future of QNet and the direct selling industry in India?
The developments over the past few months, both on the legal as well as the legislative front have been very encouraging. The regulatory vacuum in which the sector has been operating so far will now change into a more meaningful business environment with proper regulatory oversight. The convergence of action from the judiciary and the legislature is one of the best things to have happened to not just QNet, but the direct selling industry in India.

Even without regulations, the industry has generated in excess of $1.1 billion in 2016 (as per report by WFDSA). Can you imagine the growth potential from here on, now that the industry will be regulated? This is an exciting time to be in India and we are looking forward to growing with the industry here.

The direct selling industry has been at the receiving end particularly because people misconstrue the industry as a “Ponzi scheme” and so on. How has it changed now especially with the Supreme Court stay on all proceedings against the company? 
QNetis a Direct Selling Company dealing in real and tangible products. Our product portfolio consists of products spanning across the lifestyle and wellness segments. All the allegations against us are misconceived if you look at the real products that are being sold by us. Hence these Acts including the Prize Chits and Money Circulation Schemes (Banning) Act as well as the MPID Act are not applicable to us. On the contrary we also have a decision that matters touching upon direct selling are within the ambit of consumer protection if any issues arise.

Now that the SC has stayed all further proceedings against us, it reinforces the fact that we are a genuine Direct Selling Company. If you haveseen recent media reports about the SC order, you will see they clearly mention that the SC has observed that we are not a “ponzi scheme”. This is very encouraging for us and we expect to build on all these positive developments to find our legitimate space in the Indian business scene.  

The SC stay paves the way for legal proceedings and investigations to take a logical turn for the better of all stakeholders. We have always maintained that we are a genuine direct selling company. The new guidelines are something that will add strength to industry contentions. On our part, as we have already filed the affidavits confirming that we have complied with all the requirements, the states will complete their deliberations.

Do you have any suggestions for industry players and regulators to take the direct selling industry forward?
There are millions of young people graduating from colleges each year and coming into the job market. It is almost impossible for the Government to find jobs for everyone. Hence, it becomes important that the government work with industries that help people with self-employment and skill development. The direct selling industry is the one of the oldest and most reliable solutions to this.



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