Inter-ministerial panel to look into direct selling and multi-level marketing

The government has constituted an inter-ministerial committee to consider the issues relating to direct selling and multi-level marketing.

The committee will consider issues relating to the companies engaged in direct selling/network/multilevel marketing, etc, an official release said today.

The development comes in the wake of complaints leveled against Walmart's cash-and-carry operations in India. The Walmart-Bharti group joint venture for wholesale cash-and-carry business is allegedly engaging in retail operations through various outfits.

The committee, headed by Rajiv Agarwal, secretary, department of consumer affairs, has representatives of the department of finance services, department of revenue, ministry of corporate affairs and the Reserve Bank of India as members.

The committee will consider:

• The necessity for enactment of legislation to regulate direct/multi-level marketing companies;
  
• Issue of guidelines for these companies on the lines of Kerala model;
  
• Define direct/multilevel marketing and pyramid scheme in the `Prize, Chits and Money Circulation (Banning) Act, 1978' through an amendment;
  
• Organise awareness campaign under 'Jago Grahak Jago' to protect the interest of the consumers in respect of such multi-level marketing schemes;
  
• Recommend international best practices to protect consumers;
  
• Suggest legal action against the companies dealing with such multi-level marketing schemes;
  
• Decide on the department to deal with the matters relating to these marketing schemes;

The committee has been asked to submit its report by August 2012.