The Drugs and Cosmetics Act, 1940 (the Act) is a Central Act and is applicable to the whole of India. This Act and the rules made thereunder regulate the manufacture, sale, import, export and clinical research of drugs and cosmetics in India. While the parameters of control are devised by the Central Government, these are required to be actually implemented by the State Government. This performance audit of the implementation of Drugs and Cosmetics Act, 1940 in Rajasthan carried out by the CAG of India covering the period 1998-99 to 2002-03 revealed that in Rajasthan, the Act has not been implemented effectively. The provisions of the Act regarding inspection of units, drawing/testing/reporting of sample, speedy and effective action against defaulters were not implemented strictly. There was shortfall in conducting inspections of units and action against drug offenders was inadequate. There was no proper coordination among the Drug Control Organisations of various States. There was serious risk, therefore, of fake/spurious/not of standard quality drugs being supplied to consumers in the State. There was delay in sending of samples to laboratories for analysis, delayed reports of analysis even after expiry of drugs, full consumption of stock of “not of standard quality” drugs, and shortfall in sampling of all categories of drugs.