Daily RC and Vocabulary 9th January 2026

Conditional ease

The CDSCO guidelines should not regress into a ‘pay and pass’ schemeThe new guidelines to compound minor drug violations that the Central Drugs Standard Control Organization (CDSCO) has released, operationalise a legal change in the works since 2023. Until recently, many instances of relatively minor or technical non-compliance under the Drugs and Cosmetics Act, 1940, invoked criminal prosecution. The new guidance and standard operating procedures are meant to standardise compounding instead, whereby, at the regulator’s discretion, firms can settle certain offences by reporting them and applying to pay a fine, instead of litigating. The legal backdrop is the Jan Vishwas (Amendment of Provisions) Act that was framed as an exercise in “decriminalising and rationalising offences … for ease of living and doing business”. In the 1940 Act, Jan Vishwas broadened the scope of Section 32B by adding heads into the group of offences that could be compounded; this now includes making a drug to sell or distribute in breach of the 1940 Act but not covered by its Section 27(a-c) and stocking or exhibiting such a non-spurious or non-adulterated drug, among others. If compounding is granted and paid for, the key benefit is “immunity from prosecution” for that case, subject to conditions. This change is for the better if the regulatory apparatus implements it in good faith. 

For offences based on record keeping and disclosure, compounding prevents needless criminalisation and lets enforcement focus on direr violations.The main pitfalls are the guidelines regressing into a ‘pay and pass’ scheme and the CDSCO’s transparency. Firms can seek compounding “before or after” prosecution. If, however, the CDSCO does not publish (even redacted) compounding orders and the underlying case details, the public may lose faith in the legal proceedings and in the regulator. Even if repeat offenders cannot avail of the benefit, there needs to be a publicly auditable trail. The guidance’s emphasis on discretion and conditions cannot substitute for public reporting that lets independent actors check whether the same firms are repeat offenders. Similarly, the published process does not create room for consumer groups or whistle-blowers to make representations before immunity is granted. Next, the way the errors that can be compounded are written is broad enough in practice to cover a wide range of behaviours, from lapses in paperwork to more substantive compliance failures. If the compounding fines are also set too low, applied inconsistently or used routinely in place of deterrence, compliance will only falter. Perhaps most of all, the CDSCO also needs to link compounding to corrective and preventive actions, follow-up inspections, and, where relevant, public-facing actions such as issuing alerts or directing firms to recall products. Otherwise, there may not be a durable reduction in risk over time.

Top 10 Vocabulary from the Editorial (with Meaning & Example)

1. Compounding

Meaning: Legal settlement of an offence by paying a penalty instead of facing prosecution.
Example: Compounding minor violations helps reduce unnecessary criminal cases.

2. Decriminalisation

Meaning: Removal of criminal liability for certain offences, replacing it with civil penalties.
Example: Decriminalisation of technical lapses aims to improve ease of doing business.

3. Regress

Meaning: To return to a worse or less developed state.
Example: Poorly designed guidelines may regress into weak enforcement mechanisms.

4. Discretion

Meaning: Power to make decisions based on judgment rather than strict rules.
Example: Excessive regulatory discretion without oversight can lead to arbitrariness.

5. Transparency

Meaning: Openness in processes, decisions, and access to information.
Example: Transparency in regulatory orders strengthens public trust.6. Immunity
Meaning: Protection from legal action or prosecution.
Example: Once compounding is granted, the firm receives immunity from prosecution for that offence.

7. Deterrence

Meaning: Prevention of wrongdoing through fear of penalty or punishment.
Example: Low fines weaken deterrence and encourage repeat violations.

8. Compliance

Meaning: Act of following laws, rules, or standards.
Example: Strong compliance systems reduce the risk of regulatory action.

9. Auditable trail

Meaning: A clear and verifiable record of decisions and actions.
Example: A publicly auditable trail helps identify repeat offenders.

10.Moral hazard

Meaning: Situation where protection from consequences encourages risky behaviour.
Example: Easy compounding may create moral hazard if firms treat fines as a cost of business.
High-Level Reading Comprehension (RC) MCQs(Based on the editorial: “Conditional case: The CDSCO guidelines should not regress into a ‘pay and pass’ scheme”)Q1. The primary objective of the CDSCO’s new compounding guidelines is to:

A. Increase regulatory revenues through fines

B. Replace judicial oversight with administrative discretion
C. Reduce unnecessary criminalisation of minor drug violations
D. Shield pharmaceutical firms from accountabilityQ2. According to the editorial, the legal foundation for compounding of offences under the Drugs and Cosmetics Act arises from:A. A Supreme Court directive on regulatory reform
B. The Jan Vishwas (Amendment of Provisions) Act
C. Amendments proposed by the CDSCO in 2025
D. Recommendations of a parliamentary standing committeeQ3. Which of the following is identified as a key benefit of compounding offences when implemented in good faith?A. Elimination of all criminal liability for firms
B. Faster judicial disposal of serious offences
C. Immunity from prosecution for that specific case
D. Automatic compliance by repeat offendersQ4. The phrase “pay and pass scheme” is used to caution against:A. Excessive judicial intervention in regulatory matters
B. Corporatisation of drug regulation
C. Routine monetary settlement replacing genuine enforcement
D. Arbitrary classification of offences as minorQ5. The editorial argues that public trust in the CDSCO may erode if:A. Compounding is allowed after prosecution begins
B. Minor violations are exempted from criminal law
C. Compounding orders and case details are not published
D. Firms are required to self-report violationsQ6. Which concern does the editorial raise regarding discretion vested in the regulator?A. It delays enforcement actions
B. It may substitute transparency and public accountability
C. It conflicts with judicial authority
D. It discourages industry self-regulationQ7. The editorial suggests that the current framework inadequately addresses which of the following stakeholders?A. State drug regulators
B. Pharmaceutical manufacturers
C. Consumer groups and whistle-blowers
D. Medical practitionersQ8. Which of the following best captures the editorial’s position on compounding fines?A. They should be uniform and minimal
B. They should replace deterrence-based regulation
C. They should be high enough to ensure compliance
D. They risk failure if inconsistently applied or too lowQ9. The recommendation to link compounding with recalls, inspections, and alerts reflects concern about:A. Federal overlap in drug regulation
B. Long-term public health risk reduction
C. Judicial delays in prosecution
D. Excessive regulatory burden on firmsQ10. Which of the following assumptions underpins the editorial’s critique?A. Criminal law is always inappropriate for regulatory violations
B. Transparency is essential for regulatory legitimacy
C. Pharmaceutical firms act in bad faith by default
D. Monetary penalties are inherently ineffective
Answers & Explanations (Separately)

Q1. Answer: C

Explanation: The guidelines aim to decriminalise minor or technical violations and avoid needless criminal prosecution.

Q2. Answer: B

Explanation: The editorial explicitly links the change to the Jan Vishwas (Amendment of Provisions) Act, which sought decriminalisation.

Q3. Answer: C

Explanation: Compounding provides immunity from prosecution for that specific offence, subject to conditions.

Q4. Answer: C

Explanation: “Pay and pass” criticises a system where firms routinely pay fines instead of being meaningfully regulated.

Q5. Answer: C

Explanation: Lack of publication of compounding orders undermines transparency and public confidence.

Q6. Answer: B

Explanation: The editorial warns that discretion cannot replace publicly auditable and transparent processes.

Q7. Answer: C

Explanation: The framework does not adequately allow consumer groups or whistle-blowers to make representations.

Q8. Answer: D

Explanation: The editorial cautions that low, inconsistent fines may weaken deterrence and compliance.

Q9. Answer: B

Explanation: Linking compounding to corrective actions is aimed at achieving durable reduction in public health risks.

Q10. Answer: B

Explanation: The critique rests on the belief that transparency and accountability are core to regulatory credibility.