June-July, 2012 I The Business Diary 13

FDSA, Federation Of DirectSelling Association, conductedits 5th workshop at Kolkata onSeptember 29, here at HotelHyatt Regency. Earlier, FDSAalso participated in the seminarorganised by FICCI (Federationof Indian Chamber of Commerceand Industry) on ‘New GrowthAvenues To Reach The Masses’on September 25, at HotelResidency Towers, Chennai.

Former Director General ofPolice, Andhra Pradesh, Mr.Gopinath Reddy and Mr. K NJayaraj, Secretary, DelhiPradesh Congress Committee,participated as Chief Guests inthe Kolkata workshop.

Speaking on the occasion,Mr. Gopinath Reddy said thatwithout pooled effort nothing canbe achieved and urged all thegenuine players to cometogether to fight for a just cause.“No one can do it alone. This is aevolving marketing strategy. Noone knows what is right orwrong. Police always thinks whyto allow such things. People whoare not interested in the industry

“This is a western concept. We need to indianise it. There are many myths surrounding this industry. All ofyou have to come together, join hands, discuss and draw conclusions that is best suitable to our society

and country. This is not a one man show and is not a easy task. There will be several setbacks. You need toovercome all those hurdles. You need to be very clear as several ministries will be involved. Several

bureaucrats are not in favour of this industry. They think it is a cheating business. You need to dispel this”

The Business Diary I June-July, 201214

can get out of it and allow genuine players to operate peacefully. The genuineplayers can evolve a best method that is useful to the society”, he said.

Emphasising on the need to make the industry more legal and acceptable,Mr. Gopinath Reddy said, “The problem is how to make the government acceptit as one type of marketing. Those sitting in the government will not prioritisethis. You must make them realise it is one type of economic development”.

“This is a western concept. We need to indianise it. There are many mythssurrounding this industry. All of you have to come together, join hands, discussand draw conclusions that is best suitable to our society and country. This isnot a one man show and is not a easy task. There will be several setbacks. Youneed to overcome allthose hurdles. Youneed to be very clearas several ministrieswill be involved.Several bureaucratsare not in favour of thisindustry. They think it isa cheating business.You need to dispel this.To do this you need toprepare a backgroundpaper on the industry”,he observed.

Urging everyone tocome out with newideas he asked FDSAto prepare a model ‘Actand Rules’ andappoint a legalcommittee. “What youare looking at isdifferent from whatothers are looking at. Iam happy at leastsome efforts are beingput to bringrespectability to thisindustry. Media willalso be workingagainst this industry.Hence you need tocome up with ana c c e p t a b l eproposition of

June-July, 2012 I The Business Diary 15

business. Things will take time. Do not expect them to happenovernight. Public acceptance is a must. Effectiveness andacceptability or the key points that you need to work around. Ifyou are effective and not acceptable, you will fall like a pack ofcards”, he said.

Advising all to adapt a positive approach towards thisbusiness, he said that his help will always be there andwished that rules will come into force by the end of thisyear. “Luck favours those who are prepared. Properdocumentation, maintaining time schedules and qualityconsciousness are a must. I am very happy to be associatedwith you all”, he said.

Mr. K N Jayaraj, Secretary, Delhi Pradesh CongressCommittee addressing the participants said that governmentwill not tolerate any wrong doings. However, it will alwayswant to support the right things. “Direct Selling has a greatpotentiality. Since it is in unorganised sector, certain peopleare misusing the opportunity. FDSA should take initiation andprovide the list of all erring companies so as their advancescould be checked”, he said.

Mr. A P Reddy, President, FDSA, while welcoming thedelegates, found fault with the money circulation companiesthat vanish overnight. “Because of this and many more various

reasons, more genuine companies are facingchallenges that are hard to be surmounted.Nobody is happy in opting this industry. Only weknow the power, value and how we can make thecountry proud. Though crores of people areworking in this industry, it is unfortunate that it isnot recognised”, he said adding that the biggestproblem that the country is facing is anti-socialism,because of not being happy in their regular lifedue to insufficient incomes.

“Day by day unemployment is on the risedue to various reasons in the Country. Ourbusiness provides employment opportunities.The industry generates income to those whowork ethically and also generates taxes to thegovernment. This is the only industry that couldbring a change in people’s lives. Unfortunatelymoney circulation companies are defaming theindustry. In money circulation companies noone will be benefitted. FDSA is for genuinedirect selling companies, who have a valuedproduct. We are total ly against moneycirculation companies. In many states genuineplayers are facing critical problems becauseof these money circulation companies”, heobserved.

Mr. B Devanand, Secretary (West), FDSA,while speaking on the legal scenario of India said,“There are several laws in India, but are notspecific to Direct Selling/MLM. It is not clear which

is legal or which is illegal. The ‘Prize Chits & MoneyCirculation (Banning) Act, 1978’ is for dealing withchit fund activities and is not meant for DirectSelling/MLM, as Direct Selling is not there in 1978.Till today, not a single final verdict was pronouncedby any court in India on Direct Selling/MLM statingthat they fall under ‘Prize Chits & MoneyCirculation (Banning) Act’”.

“In other countries, Direct Selling operateson principles like - customer should buy for thesake of product that is rightly priced, profitarised out of this sale can be dispersed to oneperson or a group of persons, the productshould be tested and proven, and should giveservice guarantee/money back guarantee. Wedon’t have these principles in India”, he pointedout.

Mr. Devanand said, “People do not understanda Direct Selling plan. Checks and balances willbe there in any business. We need to meet ourcommitments. The final judgement always lieswith the court. Police have to collect all the relatedevidences only”.

“You need to come up with an acceptableproposition of business. Things will take time. Do

not expect them to happen overnight. Publicacceptance is a must. Effectiveness and

acceptability or the key points that you need to workaround. If you are effective and not acceptable, you

will fall like a pack of cards”

The Business Diary I June-July, 201216

Asking all the Direct Sellingcompanies to be prepared andhave a scrutiny committee, hesaid, “The law of India starts onlywith a complaint. This is how ourlegal system works. So it is highlynecessary to keep al l thedocuments l ike IncorporationCertificate, Sales Tax Registration,Income Tax Registration, PAN, TANand all other supportingcertificates ready for any kind ofinspection from any police orgovernment official. Also, keepingthe breakup of money sharing indetail handy, can also tackle anykind of uncertainty”.

Speaking on why a ‘UniformCode’ is required, Mr. Devanandfurther said, “As long as the moneyparted is with in the profits, it doesnot matter how you are sharing it.No where in the world ‘Binary’ is

declared as illegal. With in an ‘Association’ we cannot have differentpeople. Hence a ‘Uniform Code’ is a must. Guidelines allow us torepresent as a group entity and not a diversified entity. We want tocreate a level playing field”.

Mr. Kishore Varma, General Secretary, FDSA while presentingthe guidelines of FDSA said, “we need to be clear about what weare doing. It is essential that all the member companies adapt theseguidelines so that uniformity could be maintained in the Association.There are as many as approximately 8,300 Direct Selling/MLMcompanies according to the statistics available with the government.Following the guidelines would only help the Direct Selling companyand not otherwise”.

Mr. Rajiv Gupta, Director, ARL Parivar Ltd., speaking on the necessity ofhaving an association, said, “The Indian socioeconomic structure do notsuit the western system. An Association is a prime requirement here, as thesystem was wrongly projected by individuals and had been received thatway by the bureaucracy. This had created lot of problems. We need tounderstand the power of unity. There is no central authority to listen to younor there are any rules or regulations. There is no mechanism to correct thewrong doers”.

The workshop was organised under the aegis of Mr. Siddhartha DasGupta, CMD, Royal Fortune Ventures (India) Ltd., Kolkata.

For further details visit: www.fdsaindia.org.

“As long as the money parted is with in

the profits, it does not matter how you are

sharing it. No where in the world ‘Binary’

is declared as illegal. With in an

‘Association’ we cannot have different

people. Hence a ‘Uniform Code’ is a must.

Guidelines allow us to represent as a

group entity and not a diversified entity.

We want to create a level playing field”