Impose higher GST, stricter labelling rules on UPFs: Economic Survey

The government must focus on a multi-pronged approach with stricter FSSAI labelling norms, higher GST, and awareness campaigns to curb consumption of ultra processed foods (UPFs), according to the pre-Budget document tabled in Parliament on Friday.

"A multi-pronged approach would be required to address the concerns emerging from the increased inclusion of UPFs in diets in India," it said.

Misleading nutrition claims and information on UPFs need to be tackled and should be brought under the scanner, it said.

The Food Safety and Standards Authority of India (FSSAI) could consider bringing UPFs under regulation with a clear definition and standards, including stricter labelling requirements.

The Ministry of Health and Family Welfare should urgently define nutrient thresholds for sugars, salt, and saturated fats to regulate advertising, adopt warning front-of-pack labels (FOPL), and impose stricter marketing restrictions on unhealthy foods, especially targeting children under 18. 

A 22-country study established that self-regulation has not been very effective in this regard, its said, calling for improved monitoring of branded products to ensure compliance would help build consumer confidence.

It also suggested strengthening consumer protection efforts to deal with aggressive marketing and distribution practices and misleading nutrition claims in advertising, especially when they are targeted towards children and youth.

"A higher tax rate for UPFs may also be considered a 'health tax' measure targeted specifically at brands/products that advertise," it said.

There is a need to generate greater awareness around the adverse impact of the consumption of UPFs through campaigns targeted at schools and colleges alongside existing health and lifestyle campaigns of the governments.

Efforts also need to be directed to promote local and seasonal fruits and vegetables and facilitate positive subsidies for healthy foods such as whole foods, millet, fruits, and vegetables to improve their availability, affordability, and consumption.

High GST rates and amendments to consumer protection laws could deter misleading advertising. Additionally, a coalition of civil society and government entities, free from conflicts of interest, is vital to educate the public and counter food industry interference.