India's failing regulators

Culture of tolerating low standards needs to end

It has been a terrible fortnight for Indian regulation across sectors. The latest has been a double whammy. The United States aviation regulator, the Federal Aviation Administration, has downgraded India's civil aviation safety rating to a level where it is in the company of either countries with poor safety records or small economies not in the same class. Plus, small Indian cars have failed the safety tests of the European New Car Assessment Programme. This compounds the damage already done to India's image and global competitiveness by the US healthcare regulator's ban on the fourth plant - thus covering all of them - of drug major Ranbaxy, which till not so long ago was the country's foremost pharmaceutical company. Reasons for these individual setbacks differ, but, coming in close succession, they tell a story of failure of regulation - and thus, by extension, of governance.

What is most dispiriting is that there are very few excuses for letting things drift to the present situation. The Drug Controller General of India has said something quite unbelievable: that if US regulatory standards were to be applied across the board, few Indian pharmaceutical companies would pass muster. He added that it would take the Indian industry 10 years to reach US standards. This admission can easily shake the foundations of India's status as a major global drug exporter. The present situation is the result of administrative neglect for over a decade; there have been long periods without a permanent drug controller. In the case of the downgrade of air travel safety rating, the government got busy appointing 75 new hands in the regulatory set-up just before the US decision was announced. This indicates that a situation of gross understaffing was allowed to continue for longer than it should have been, which led to inadequate safety checks and poor documentation of safety procedures. The same is the case with the drug controller's office, which has decided to recruit 300 to 400 additional inspectors every year during the current Plan period. The nation is clearly paying the price of historical neglect for which not only the current ruling United Progressive Alliance but the earlier National Democratic Alliance government must also bear responsibility.

In the case of the cheaper Indian cars not being able to meet European safety requirements, the blame needs to be shared by Indian safety authorities and car manufacturers, with the latter keen on keeping prices low to generate sufficient demand. Air bags, for instance, which reduce the risk to passengers in a car crash, are not mandated as they are across large parts of the world, because making them compulsory will add to the price of entry-level cars. Since Indian roads are highly unsafe and most Indians drive very poorly, it is imperative to use as much technology as possible to ensure safety. Proper regulation - be it in the manufacture of medicines, air travel or car safety - is in the interest of every Indian and the deficit in it is the result of the loose culture of governance that has prevailed so far. It is critical for public debate to focus on adequate regulation and demand a change for the better.