Karnataka government to outsource regulatory functions in three departments

Owing to staff shortage, the government of Karnataka has decided to outsource regulatory functions, like inspections, verification, and certifications, in three critical departments to private firms. 

These include Factories, Boilers, Industrial Safety and Health in the Labour Department, Food Safety and Drug Administration in the Health and Family Welfare Department, and Legal Metrology in the Food and Civil Supplies Department. 

This comes close on the heels of concerns over the Food Safety and Drug Administration department being overwhelmed by the sheer number of establishments it has to inspect. Health and Family Welfare Minister U. T. Khader had mooted the idea of deploying citizens and retired officials from the department at the taluk level to act as force multipliers. 

Recommendation of Karnataka Administrative Reforms Commission

The direction to outsource regulatory functions is in line with recommendations of the Karnataka Administrative Reforms Commission-2, which stated: “Wherever sufficient inspectors or staff are not available to ensure regulatory compliance, departments shall rely on the services of reputed, empanelled third-party agencies”, according to a letter by Harsh Gupta, Principal Secretary to Government, Praja Seva Department, which was sent to these three departments. 

“The relevant Central Acts and Regulations already recognise third-party testing, audit, or inspection in some of these areas, and these may be adopted to the extent permissible,” Mr. Gupta said, asking officials to ‘examine the relevant State Rules, notifications and procedures, and take up the modifications needed to implement this’.

Statutory powers of inspection, sampling, seizure, and prosecution will remain with officials of the department. They can then concentrate on risk-based and targeted inspections, guided by the third-party audit findings. Where no periodic inspection is prescribed, periodic third-party verification may be prescribed as a best practice. This would ensure a minimum level of regulatory compliance even where departmental inspectors are unable to visit such establishments regularly, the letter further stated. 

Action plan

The three departments have been told to put together an action plan to the Praja Seva Department with a timeline to implement the same. They have been told to ‘identify the inspections, verifications, and certifications in your department that can be entrusted to, or supported by, third-party agencies and frame the eligibility criteria, accreditation requirements, fee structure, and terms for empanelment of reputed third-party agencies, and take up the empanelment’. 

The departments have also been told to ‘put in place a supervisory mechanism for departmental oversight. This should include random test-checks of the agencies’ work, and action against agencies for lapses’.