Direct selling sector revenue grows 12% to Rs 7,164 crore in FY13

NEW DELHI: The direct selling sector saw 12.2 per cent growth in gross sales revenue to Rs 7,164 crore in 2012-13 financial year, says a report by industry body PHD Chambers of Commerce and Industry.

The sales revenue of the sector is estimated to grow up to Rs 10,843 crore by 2014-15 from present levels, the report on the Indian direct selling industry said.

The distribution base of the direct selling industry in 2012-13 was 57.75 lakh with a growth of 18.9 per cent.

"The steady growth is mainly attributed to factors such as entry of new firms, expansion of business to different cities and more youth joining the force," the report, which was released today with India Direct Selling Association (IDSA), said.

The sector paid a total tax of Rs 986 crore in 2012-13 as against Rs 821 crore paid a year ago, it added.

"However, during 2012-13, the industry has faced a decline in its overall growth scenario due to several hurdles such as global economic milieu and policy environment and declining investments," the report said.

The sector registered a growth rate of 12 per cent in 2012-13 against that of 22 per cent in 2011-12 and 27 per cent in 2011-12.

According to the survey, the northern region contributed the maximum of Rs 1,934 crore in the gross sales revenue with a growth of 33 per cent.

However, there was a negative growth of 30 per cent in the turnover in the southern region.

"It is mainly due to Kerala, where the state government is not very supportive on the issue of the Prize Chits and Money Circulation Schemes (Banning) Act," IDSA Secretary General Chavi Hemanth said.

She further said that the government should grant the sector a status of industry by amending the prevailing rules and regulations.