Food, drug crackdowns test India’s regulatory enforcement muscle | India News

In Gurugram, Haryana, the FDA has raided outlets over complaints of stocking fake paneer, aka analogue paneer, while restaurants and shops in Pune had their food licences suspended after officials found major food safety violations and poor hygiene, including cockroaches and other insects on the premises. In Karnataka, the state FDA has cracked down on fake drug rackets (including those for cancer), cancelling 24 licences.

What has surprised the public is the consistency being shown by the regulators to pull up errant companies or institutions for their derelictions.

From a regulatory point of view, however, there arises a question mark over such well-publicised actions which come under the aegis of the Food Safety Standards Authority of India (FSSAI) and the Central Drug Standard Control Organisation?

According to RS Sharma, former chairman of the Telecom Regulatory Authority of India (Trai), the raids were necessary. He said that in several cases, regulations are often not complied with and the penalty is desultory. “The regulators must be on the ball. They must issue alerts. But it cannot be the case that even when regulators issue orders and those orders get flouted, there would not be a follow-through from the regulator,” he said.

Sharma points out that the alternative, which is the public taking their complaints to the courts, has often not led to systemic changes. “The judicial process is often stretched out that takes out the energy of the complainant. So the state action can be faster through these raids or searches as the evidence can make the subsequent court actions also swift,” he said.

The same position was articulated by a former insurance regulator. According to this regulator, who didn’t want to be named, insurers or others who break the law or often do not fulfil all the provisions of the regulatory rules. But they should not feel they can get away with these transgressions with impunity.

He said that, in any case, the Codex Alimentarius, or “Food Code”, the collection of international standards, guidelines and codes of practice to protect the health of consumers and ensure fair practices in the food trade, is what FSSAI and other regulators implement. So the Codex standards are used worldwide to harmonise national food safety regulations. As the website of the organisation that operates under the FAO notes, “when food producers and traders comply with Codex standards, consumers can trust the safety and quality of the products they buy while importers can have confidence that the food they import meets Codex specifications”.

According to former regulators, the system of handing out punishments by regulatory bodies, bar the financial sector, has often been pretty restrictive. This is quite distinct from the position in developed markets, where any transgressions are brought to task with an immediacy and strength. The US FDA, for instance, has written in provisions that allow it to even inspect overseas establishments if they are supplying goods to US markets. Generic drug maker Ranbaxy, from India, was pulled up by the US FDA in 2013 for gaps at its India-based manufacturing units. The company eventually pleaded guilty and agreed to pay $500 million to resolve the issues which included false statements to the FDA.

All the former regulators Business Standard spoke to agreed that the fair market regulators have strictly followed the law of the land in the current circumstances. These have included long sets of warnings to the guilty outlets and options to plead guilty or otherwise, only after which the action has been taken.  

According to Sangeeta Verma, former member of the Competition Commission of India (CCI), regulators are supposed to enforce action through a series of well-laid-down guidelines. She said the preamble to the Competition Act notes that the organisation will take steps in tune with the current economic necessities of India, and it can be presumed that the regulators for the food and drugs sector have followed the same due diligence.

Verma also said the public was entitled to fair trade practices. “It follows that substandard food items or raw materials for drugs vitiate those expectations of fair standards. So the regulators have acted in the best interests,” she pointed out.

Sharma said it is not easy for the officers to undertake the roles of entering the premises of the offending entities and carry out their tasks. “There are physical risks; there are also risks of being transferred out and other issues”, he added. “That the officers have gone about their tasks diligently is a positive development for the economy.”