Companies & Sectors
Committee formed to regulate issues of direct selling industry

The inter-ministerial committee would give suggestion to regulate functioning and suggest legal action against companies engaged in direct selling, network or multi-level marketing or MLM

New Delhi: The Consumer Affairs Ministry has constituted an inter-ministerial committee to regulate functioning and suggest legal action against companies engaged in direct selling, network or multi-level marketing (MLM), reports PTI.
The committee to be headed by Rajiv Agarwal, Secretary, Department of Food and Consumer Affairs, will have representatives of department of Finance Services, department of Revenue, Ministry of Corporate Affairs and Reserve Bank of India as its members, an official statement said here today.
It will consider enactment of legislation to regulate the direct/multi-level marketing companies.
They will also organise an awareness campaign under "Jago Grahak Jago" to protect the interest of the consumers in respect of such multi-level marketing schemes and study international best practices to protect consumers.
The committee shall submit its report by August 2012.
Direct selling is the sale of a consumer product or service, person-to-person, away from a fixed retail location, marketed through independent sales representatives who are sometimes also referred to as consultants, distributors or other titles.
Direct sellers are not employees of the company. They are independent contractors who market and sell the products or services of a company in return for a commission on those sales.
However, many MLM companies, such as Speak Asia and Gold Quest, have been accused of money laundering by some of the people who invested in them.
Top multi-level marketing companies operating in India include Amway, Oriflame, Avon and Tupperware.




5 years ago

IDSA would now approach (if not already) the committee and make them make regulations in favor of existing members -so that other new ethical companies have a challenge launching in India.



In Reply to Edward 5 years ago

i personally have noticed that the staff at IDSA is not aware of lots of happenings in the country .

Hurrah! India stands second in the world in global RTI rating

The world’s first ever RTI rating analysis conducted to find out how strong are the provisions of RTI law in 90 countries which have implemented the RTI Act, has thrown up surprising results with lesser known countries having stronger laws

Consider this: When, The Associated Press, in early 2011, filed Right to Information (RTI) request for information on terrorism charges and convictions in 105 countries, it got its reply from Turkey within a week; India, within a month; Mexico within two months; while the Canadian government sought a 200-day extension to give the reply. According to news reports, only 14 countries responded with the full information within their legal deadline; most countries did not provide any of the information asked for. The FBI too took six months and at the end of it, gave only vague replies.


Hence, it is not surprising that leading countries with otherwise good governance like USA and UK are ranked 39th and 28th in a comprehensive world-wide RTI Rating Project undertaken by Centre for Law and Democracy based in Canada (which stood 52nd) and Spain-based Access Info Europe. The results of the two year study were recently unveiled and showed that India ranked second having scored an impressive 130 out of 150 points with Serbia ranked first with 135 points.

The study was “a comprehensive comparative analysis of the legal frameworks for accessing information in each of the 90 countries where such a system exists.” Which means, the focus was only on how strong are the provisions in the RTI laws of the 90 chosen countries and not on how effective is the implementation, as that would be a cumbersome and complicated endeavour. Besides being assessed on 61 main indicators, the rating was given under seven different categories: Right of Access, Scope, Requesting Procedures, Exceptions and Refusals, Appeals, Sanctions and Protections, and Promotional Measures. The total count was 150 points. “The indicators were drawn from a wide range of international standards on the right to information, as well as comparative study of numerous right to information laws from around the world,” states the website.


The study was initiated by Toby Mendel, president of Centre of Law and Democracy, Canada. Before founding the Centre for Law and Democracy in January 2010, Toby Mendel was for over 12 years senior director for law at ARTICLE 19, a human rights NGO focusing on freedom of expression and the right to information. He has provided expertise on these rights to a wide range of actors including the World Bank, various UN and other inter-governmental bodies, and numerous governments and NGOs in countries all over the world. Experts who reviewed India’s scoring points were Venkatesh Nayak and Anjali Bhardwaj for India and members of Commonwealth Human Rights Initiatives (CHRI), which works to raise public awareness of RTI amongst people and communities.

Some of the indicators amongst many others that favoured India were: “Right to information has been recognised as constitutional by the Indian Supreme Court on numerous occasions; information can be sought in writing or electronically or orally with a minimum of required procedure; it is available for the illiterate; for the disabled; for those below the poverty line; there is a mandatory public interest override so that information must be disclosed where this is in the overall public interest, even if this may harm a protected interest.”

In the comments, Venkatesh Nayak and Anjali Bharadwaj have made the following observations which give a balanced overview of the RTI Act in India: “India has long been recognised as one of the most advanced countries in the world when it comes to access to information, but its failure to top this ranking is demonstrative that global standards of the right to access have advanced considerably since India’s law was first passed. This is not to say that India's legal framework is bad.


“As this score indicates, it remains one of the top countries in the world, but there are several problems with India's access regime. Chief among these are the blanket exceptions in Schedule 2 for various security, intelligence, research and economic institutes. Instead of such broad and sweeping exclusions, these interests should be protected by individual and harm-tested exceptions. The Indian legal framework also does not allow access to information held by private entities which perform a public function, and several of the law’s exclusions, including for information received in confidence from a foreign government, cabinet papers and parliamentary privilege, are also problematic”.

As for the USA, the leading country of the world, expert observations were: “Overall, the USA is a good example of a country where practice outstrips the legislative framework, and it is quite possible that this score undervalues the true openness of the United States government. Nonetheless, there are significant problems with USA’s access regime which negatively impact the right to information in that country. For instance, exceptions within the law are in many instances not harm-tested and there is only a very limited public interest override. The United States also lacks a specialised appeals body and, while American courts have been somewhat good in defending the right to information, they cannot do the job as effectively or expeditiously as an independent appeals body.”


Pakistan, which implemented the law in 2002 is ranked 66th.  According to an article based on this study in International The News of Pakistan, “Pakistan is among the last 20 countries in the Global Right to Information (RTI) rating, ranking 72 out of a total of 90 countries surveyed, with neighbouring India coming in at third place and other countries in the region, such as Nepal and Bangladesh, also doing exponentially better than Pakistan. Even Mexico, otherwise considered very hostile to journalists, has been ranked seventh while Ethiopia, another country described unsafe for journalists, has earned the tenth position. Yemen too boasts of more liberal access to information than Pakistan, ranking 20th on the index.


“Citizens’ right to information is also a fundamental human right affirmed in the Universal Declaration of Human Rights. However, here in Pakistan, Sherry Rehman’s Right to Information Act has been floating around from one standing committee to the next for the last few years, with no logical end in sight. This is unfortunate, given that a working right to information law could enable people to ask important questions about the government and rightly unearth fraud, corruption and poor governance. Legislation on the right to information is part of the fundamental task of redistributing power in any democratic framework. While other countries in the region are redefining and reinventing vibrant forms of democratic participation, Pakistan keeps moving further back in time, incrementally isolating its citizens from the processes and practices of governance. This must change.”


Scores of some important countries are: Germany-54; Russia- 60; Japan-67; China-72; Canada-79; Australia-84; USA-89; and UK-97.


For those complaining about the power of the RTI Act in India, this would not only be an eye-opener but should inspire us to use it effectively and in large numbers.


(Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte. She can be reached at [email protected].)


Need for urgent decision on the Coal Regulator

India has one of the largest proven reserves of coal, but we are still forced to import the mineral instead of achieving production from indigenous sources. Surely this can be avoided


In the last few days more reports have appeared in the press that confirm public suspicion that, prima facie, some of the allottees of coal blocks between 2006 and 2009 were indeed given away these blocks due to undue favours. The Central Bureau of Investigation (CBI) probes are continuing.

Earlier, the draft report of the Comptroller and Auditor General (CAG) made a reference to the notional loss of Rs10.6 trillion as a result of the allocation of these coal acreages. Many of these allottees are blue chip companies.
What is more shocking is that no mining activity has taken place so far. To say it, ironically, allottees have not even scratched the earth, let alone digging the coal out!
It is therefore gratifying to note that, on the auspicious day of the presidential inauguration, when Pranab Mukherjee will be sworn in as the 13th president of the republic, the Group of Ministers (GoM) headed by P Chidambaram is likely to meet and discuss the Draft Coal Regulator Bill. The last meeting on the issue took place some two months ago in May.
Is it out of place to ask, why not the Draft Coal Regulator Bill be made public, so that all have access to information, and a sensible debate takes place on the issue, before it becomes a law?
It looks like, at the moment, we do not have a standardised rule for regulators in general. Obviously, the functions, scope, responsibility and goals would differ from one industry to another, but the least we can and should do is to have a uniform code which can be modified to suit a particular requirement.
As far as the regulator for the coal industry is concerned, why not take a bold step and give a carte blanche right to perform without fear?
We seem to be short-sighted in setting our target to achieve an additional requirement of some 160-170 million tonnes, which we are currently forced to import, instead of devising ways and means to achieve this production from indigenous sources. We have ‘developed’ mines and supply sources in other countries, be it Indonesia, Australia or Mozambique but are unable to do so in our own country which has one of the largest proven reserves of coal in the world!
Why not set a target of achieving an additional indigenous production of 200 million tonnes and envisage the prospect of being a net exporter rather than be a perennial importer? Can’t we learn from our foodgrain experience? In foodgrain production we have to depend upon monsoon, irrigational dam facilities, diversion of rivers, stop flooding and so on, whereas in the coal industry, we are not willing to go the extra mile and dig in deep?
One other factor that invariably comes up is the issue of approval or clearances from the ministry of environment and forests (MOEF) where hundreds of proposals are in the queue for clearance for something or other. Here again, local conditions, geography, etc play a vital role in deciding the clearance issue as much as the rehabilitation factor. Also political interference raises its ugly head often and disrupts progress.
Yet, a broad set of rules may be laid down and as clearances are individually processed for approval, the MOEF must give interim clearances to carry out tests at site to assess the viability of projects to avoid uncertainty and loss of time for the explorer. Delays of any kind must be avoided at all costs.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected]



Rajan Alexander

5 years ago

"As far as the regulator for the coal industry is concerned, why not take a bold step and give a carte blanche right to perform without fear?"

This is the right approach to effective management.If this approach is followed, a certain degree of mistakes and corruption need to be tolerated as human beings are not perfect.

Unfortunately after the Anna movement, there exists a decision paralysis. Leave alone coal, no one wants to take decisions. If you decide, you get targeted, if you evade decision, you get targeted and the consensus is better the latter than the former, at least your are not accused of corruption.

Part of the problem is that Jairam Ramesh reserved almost 1/3rd the coal fields as a no-gos. The El Nino - bringing rains in major coal producing countries have raised global prices. So importing coal involves higher energy costs

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