Tamil Nadu govt unveils audit mechanism for direct selling

CHENNAI: The Tamil Nadu government, considering the significance of the direct selling industry’s core strength in creating self-employment, skill development opportunities and socio-economic growth at the grass-roots levels, has set up a monitoring authority for direct selling entities in the state, the Indian Direct Selling Association (IDSA) shared with the media persons in a function organised here on Thursday.

The authority, while strengthening the existing regulatory framework for the industry’s workings and ensuring transparency, will also be a redressal forum for complaints of the consumers and to protect their interests. It will also be empowered with stringent provisions that the fly-by-night companies, anyway, do not make fall prey and defraud the people of their hard earnings, the IDSA further added.

Elaborating on the industry, which also provides a level playing field for individuals, local artisans, and small businesses to connect directly with consumers, particularly in the rural areas of the country, the IDSA said that based on the year 2021–22, the state continued to be the second-top direct selling market after Karnataka in the southern region, with a business of over Rs 514 crore. The industry provided self-employment to over 1.9 lakh micro-entrepreneurs, with over 83 thousand of them being women in the state and is poised to cross Rs 600 crore in business during the current fiscal year with a CAGR of over 11 percent.

The industry, while contributing to the state exchequer of about 90 crore by way of taxes, also has over 2.7 percent share in the overall national sales, which stood at over Rs 19,000 crore in year 2021-22, the IDSA shared.

Har Sahay Meena, Principal Secretary, Civil Supplies and Consumer Protection Department, Tamil Nadu, said in his key address as Chief Guest that the state has created a conducive environment for the industry in the state. He emphasized that his department is working hard to ensure the quality of the products for consumers. While offering all sorts of help to the women entrepreneurs from the department side, he also evinced interest in working with IDSA to safeguard the interests of consumers.

Vivek Katoch, Chairman, IDSA, while welcoming the decision, expressed his gratitude to the state government for setting up the monitoring mechanism. He said, “Tamil Nadu continues to be among the key and priority markets for the direct selling industry in the southern region. The growth figures clearly reflect that the direct selling industry in the state is poised for new horizons, reaffirming the relentless hard work of direct sellers in the state.”

The industry has provided sustainable self-employment and micro-entrepreneurship opportunities for nearly 84 lakh Indians and has demonstrated consistent and sustained growth with a CAGR of about 13 percent over the period of the last four years. The 19 member companies of IDSA can confidently lay claim to successfully protecting consumer interests as well as those of over 1.9 lakh direct sellers in the state, adds Katoch.

He said that in the centre, the Ministry of Consumer Affairs, through the Consumer Protection (Direct Selling) Rules 2021, has brought regulatory clarity to the operations of the direct selling entities and to protect consumers.

So far, eight states, including Tamil Nadu, have set up monitoring committees in their respective states in compliance with the provisions of the Rules.