The Centre regulating direct selling under consumer protection act is welcome step for a healthy economy. Discuss (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· After seven years on the drawing board (the first inter-ministerial committee on this sat in 2014), the Centre has finally notified rules for direct selling under the Consumer Protection Act.
· The rules completely ban pyramid and money circulation schemes, which masquerade as ‘direct selling’ but in reality have Ponzi elements, is quite welcome.
· While there is nothing wrong with consumer firms choosing a direct-to-consumer model that disintermediates the distribution chain.
· It also saves them advertising costs and allows for more affordable pricing, this model assumes discomfiting characteristics when it acquires a pyramid character.
· Unlike a simple direct selling model where a consumer firm directly recruits sales agents to engage in door-to-door selling and takes responsibility for their pitches, pyramid schemes.
· Such MLM schemes have a reputation for luring unqualified recruits with promises of unrealistic ROIs and also hand consumers a raw deal.
· While it is good to tighten the screws on a sector that is crying to be regulated, the process mustn’t make it difficult for genuine players who comply with the laws of the land.
· Direct selling generated $179.3 billion in global retail sales and plays a key role in the health and well-being, beauty and household hygiene categories that have done exceedingly well during the pandemic.
Manish 3 years
Please Review !
IAS Parliament 3 years
Try to provide a comprehensive conclusion. Keep Writing.
K. V. A 3 years
Kindly review
IAS Parliament 3 years
Good attempt. Keep Writing.
