Public health groups are calling for the government to toughen up on tobacco.
Finance Minister Arun Jaitley was facing pressure ahead of a meeting of India’s Goods and Services Tax (GST) council on February 18. Campaigners are calling for tax laws on tobacco products to change. This in a bid to stymie tobacco’s cancerous influence on Indian society.
Calls are partially a response to the perceived failure of the 2017-18 Union budget to impose stricter constraints on tobacco products. The budget increases the tax rate on tobacco products by just six percent.
Many now want “corrective measures” to be taken by the government. Foremost among these is placing tobacco products under the demerit category of goods and services. This is reserved for products “whose consumption is considered unhealthy, degrading, or otherwise socially undesirable.”
The Times of India quotes Rijo John – an assistant professor at the Institute of Indian Technology in Jodphur – as calling for the government to “[bring] all tobacco products under the highest demerit rate of 28%.” He also wants them to be subject to “the highest possible cess [tax].” If these measures are not taken, it would be “a severe blow to public health in India”, John adds.
The World Health Organization (WHO) says tobacco products’ excise tax burden should be at least 75 percent of their retail price. The tax burden is 56 percent of the price of smokeless tobacco and 53 percent of the price of cigarettes. For bidis, the tax burden is just 19.5 percent.
Tax “the poor man’s cigarette”
Bidis are inexpensive tobacco flakes wrapped in tendru leaves. They are popularly known as “the poor man’s cigarette.” Bidis are usually treated with less scrutiny than their more expensive counterparts. The lower tax burden of their retail prices is reflective of this.
Campaigners are now affording bidis extra scrutiny. This is because they are India’s most widely consumed tobacco product. They outsell cigarettes by eight to one. Some suggest bidis are more injurious to health. Studies indicate that bidi smokers are at increased risk of developing oral cancer.
“Tobacco produces death and nothing less than that”
Smoking in India is a major public health concern. It kills ten million people annually. Over the last few years, the government is seeking to address this major public health concern. Their success varies.
One notable success is that India now ranks third among 206 countries, with the biggest pictorial warnings on their tobacco products packaging. By contrast, a smoking ban in public places – in force since October 2008 – is often ignored and rarely enforced.
The government seems to be taking a hardline stance against India’s tobacco industry (the third largest in the world.) Last year, it refused to give into “pressure tactics” from the country’s tobacco lobby. Lobbyists protesting an anti-smoking WHO summit in Delhi in November demanded that India include tobacco industry representatives in India’s delegation to the summit. The government refused.
On the other hand, behind the scenes, the government seems more reluctant to upset the tobacco industry than it lets on. Some media reports suggested that the replacement of Health Minister Harsh Vadhan with J.P. Nadda was because of Vardhan’s tough talk regarding tobacco. This was co-current with declining production in states such as Gujarat (the home state of Prime Minister Narendra Modi.) As Health Minister, Vardhan called for an increase of cigarette taxes. He once said “tobacco produces death and nothing less than that.”
The WHO says that raising taxes on tobacco products is “the most potent and cost-effective option for governments everywhere.” It estimates that, in low-to-middle income countries such as India, a price increase of ten percent could reduce demand for tobacco products by around five percent.