Out of 1.1 billion smokers across the world, a staggering 120 million live in India. In quick summary, raising taxes on cigarettes and bidis to internationally recommended levels would not only save millions of lives but also will generate additional revenues for the government to the tune of Rs.180 billion, according to American and Canadian economists and public health specialists. Reports point out that in spite of the fact that 51 million Indians alive today will have a premature death because of tobacco consumption, the taxes on tobacco are far too low compared to developed economies. The World Health Organisation recommends that taxes on cigarettes be 65 per cent to 80 per cent of the retail price. In India, the figure is as low as 40 per cent! However, if the figure is raised to 78 per cent, it can ward off 3.4 million premature tobacco related deaths and as well as raise the government exchequer by Rs.146.3 billion each year. The situation is the same with bidis. Though 85 per cent of Indians smoke bidis, the product is taxed at nine per cent of its retail price! Almost 15 million premature deaths can be averted even by raising the tax rate to 40 per cent of retail price and elevate government revenue to the tune of Rs.36.9 billion. One-tenth of all deaths in India are tobacco related – a shocking 1 million every year. The World Bank estimates that a 10 per cent price rise of cigarettes could ensure see a demand fall by 8 per cent in low or middle income countries. Even though a majority of tobacco consumers are poor and young, and very price sensitive, as the demand for expensive cigarettes falls, it is unfortunately offset by the demand rise for bidis. Therefore consumers merely switch to a cheaper priced bidis. This is one of the main reasons that with higher taxes on cigarettes in India, the demand never really dropped for tobacco related products, unlike in other middle income countries. One set of strategies adopted by the Indian government to reduce demand for tobacco products – imposing comprehensive ban on advertising and promotions; apart from restricting smoking in public places and ensuring prominent health warning labels on products – has contributed considerably to reduction in heart attacks. However, prohibition of advertising and promotions still contain certain loopholes – surrogate advertising being one example of the same. Things become more complicated when the company manufacturing the cigarettes is a conglomerate operating in many other business areas.
There is no ideal policy. A policy that works out, becomes ideal. Cuba may not be fully successful but there can be lessons from its policy. Its first aim was to portray "smoking is a socially unacceptable behaviour". This was followed by creating awareness about smoking’s harmful affects; and providing education, research to evaluate peoples' psyche about smoking and framing strategies towards changing that. Above all, strong political will is all the more important, considering that tobacco related illness and deaths cost India an incredible sum of Rs.300 billion a year!
There is no ideal policy. A policy that works out, becomes ideal. Cuba may not be fully successful but there can be lessons from its policy. Its first aim was to portray "smoking is a socially unacceptable behaviour". This was followed by creating awareness about smoking’s harmful affects; and providing education, research to evaluate peoples' psyche about smoking and framing strategies towards changing that. Above all, strong political will is all the more important, considering that tobacco related illness and deaths cost India an incredible sum of Rs.300 billion a year!
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