FIDSI demands exemption for genuine direct sellers under modified PCMCS Act

The act, known as Prize Chit and Money Circulation Schemes (Banning) Act, has recently been in the news because the Department of Financial Services (DFS), Ministry of Finance, GOI, proposed to decriminalize certain laws and acts. These include PCMC Act, for which the government has also invited comments and suggestions from the stakeholders.

The country is reeling under COVID-19 crisis, which has weakened the economic environment to a large extent while affecting the morale of the business community. A significant portion of this community is the direct sellers, whose interests are represented by the Federation of Indian Direct Selling Industry (FIDSI). In order to boost the morale of the direct selling entities and to fuel some positivity into the dwindling structure of stakeholders, FIDSI has demanded that the Government of India must exclude genuine ‘Direct Selling Entities’ from the scope of section 4 of the PCMCS Act.

The act, known as Prize Chit and Money Circulation Schemes (Banning) Act, has recently been in the news because the Department of Financial Services (DFS), Ministry of Finance, GOI, proposed to decriminalize certain laws and acts. These include PCMC Act, for which the government has also invited comments and suggestions from the stakeholders.

FIDSI, which represents mid-sized Indian Direct Selling Enterprises, has quickly responded to the DFS’ call by pointing out the futility of criminal prosecution of genuine entities, which are already compliant with the framework as is promulgated by the GOI, under the PCMC Act. The Federation’s sole demand remains exclusion of genuine entities from the scope of the Act’s section 4.

While doing so, the Federation has also pointed out that even as the whole world was affected by the recession caused due to Corona outbreak, the Direct Selling Industry remained one of the sole businesses, to continue unhindered because of its ability to adapt to digital/online mode of selling. In fact, such a change of tactics also helped the industry to grow in numbers.

It is in light of this fact that the Direct Selling Entities are today asking for this exemption under the PCMC Act and hoping for a favourable response from the GOI.