Indian direct selling firms have asked the government to resolve regulatory issues to provide a distinction between direct selling and fraudulent financial pyramid schemes.

With Union Budget 2013-14 round the corner, industry body Indian Direct Selling Association (IDSA) has also asked the government to look into various provisions including introduction of Good and Services Tax (GST) and lowering of various other taxes.

"...the sector can be the new growth engine for economy if the government addresses the pending regulatory issues by providing a clear cut distinction between direct selling and fraudulent financial pyramid schemes," IDSA Secretary General Chavi Hemanth told PTI.

She further said, GST should be implemented at the earliest.

The income tax slabs should be restructured in line with the Direct Taxes Code (DTC) Bill to provide more disposable income in the hands of consumers thereby increasing their purchasing power and help in economic growth, Hemanth added.

In India, the direct selling industry, which includes various companies such as Amway, Tupperware and Oriflame, is estimated to be over Rs 5,000 crore and growing at 20 per cent year-on-year.

Commenting on various factors affecting the direct selling sector in the country, Hemanth said: "...random sales of products outside the direct selling network, lack of entry barriers for unscrupulous entities, and fraudulent schemes by such entities that mask themselves as direct selling opportunities."

Delhi-based IDSA is an industry body representing 18 leading Indian and multi-national direct selling companies. It strives to create environment conducive to the growth of Direct Selling industry in India.