The report "Your cigarette now costs 44% more" (June 28) wrongly states that India is home to roughly 10 per cent of the world's tobacco smokers. India has the world's lowest per capita cigarette consumption with just 96 cigarettes smoked per year, compared to Russia (2,786), China (1,711), Japan (1,841) and the US (1,028). In fact, cigarette consumption in China is 2,500 per cent (25 times) higher than in India.
With 17 per cent of the world's population, cigarette consumption in India is only 1.8 per cent of global consumption. Moreover, cigarette tax as percentage of per capita GDP in China stands at 0.76 compared to a much higher figure of 2.28 for India. As a result of moderate taxes, China earns $119 billion in revenue from cigarettes compared to $4.7 billion in India.
The report creates the impression that cigarettes are the only smoking form of tobacco consumption in India, ignoring the fact that bidis are by far the more prevalent and the predominant form of smoking. According to the Global Adult Tobacco Survey India, 2009-10, conducted by the Ministry of Health and Family Welfare, while the consumer base of tobacco users in India is 34.6 per cent of adults, the adult cigarette consumer base is only 5.7 per cent. Cigarettes account for only 15 per cent of total tobacco consumption (12 per cent for legal cigarettes) with the balance represented by bidis, chewing, khaini and so on. However, the government collects 85 per cent of tobacco excise revenue from legal cigarettes.
As a result of high and discriminatory taxes on cigarettes, illegal cigarettes - comprising both smuggled and domestic-tax-evaded cigarettes - are now a significant 19 per cent of total industry resulting in revenue loss of Rs 6,000 crore to the exchequer.
Director, Tobacco Institute of India New Delhi
The Editor, Business Standard
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