You are here: Home » Opinion » Columns
Business Standard

M Govinda Rao: Tobacco - Need for effective regulation

M Govinda Rao  |  New Delhi 

The most important thing is to ban all forms of tobacco consumption in public places.

By now, it is well established that tobacco is the single-most important contributor to non-communicable diseases in India. India has the second-largest number of tobacco consumers. Almost 10 per cent of the world’s tobacco consumers numbering 120 million are Indians. Interestingly, unlike in the west, 85 per cent of this is non-cigarette consumption in the form of bidis, chewing tobacco and paan.

With acceleration in economic growth and in keeping with significant increase in disposable incomes, tobacco consumption in India has shown a sharp increase in recent years. Not surprisingly, cigarette manufacturers from industrialised countries are strategically shifting their markets to emerging economies like India. At the same time, there is a growing realisation in civil society, the media and the government of the need to control the spread of the tobacco epidemic by enforcing regulations and making people aware of the mortality consequences of tobacco consumption. At the same time, the tobacco economy involves millions of workers who are directly or indirectly involved in farming, manufacturing and trade. Finding alternative sources of employment and incomes for these people must be a part of the action plan in curtailing the consumption of tobacco.

Evidence from the National Family Health Survey (NFHS-3) in India shows that 57 per cent of men and 11 per cent of women aged 15-49 consume one form of tobacco or another. Tobacco chewing is the most prevalent form of consumption in India. About 33 per cent of men and 8 per cent of women in India chew tobacco in the form of paan masala and gutka. However, smoking is largely a male habit. While nearly one-third of all men smoked either cigarettes or bidis or both, the share of women smoking is just about 1 per cent. While bidis have a larger share of the market in rural areas, cigarette smoking is largely an urban phenomenon.

According to the World Health Organisation, globally 5.4 million deaths are associated with tobacco every year and it is anticipated that by 2030, 80 per cent of these deaths will be in developing countries. According to Prabhat Jha, in India around a million deaths will be attributed to smoking by the early 2010s. What is worrying, it is already a major cause of death among Indians aged 30-69, an economically productive age group and 20 per cent of all male deaths and 5 per cent of female deaths are caused by smoking alone. The leading causes of death from smoking are cardiovascular diseases, chronic obstructive pulmonary disease and lung cancer. Dr Srinath Reddy of the Public Health Foundation of India estimates that almost Rs 3,000 crore is spent on the treatment of tobacco-related diseases every year, which is about a fourth of all health spending in the country.

Studies have shown that on average, male bidi smokers lose roughly six years of life, female bidi smokers about eight years and male cigarette smokers about 10 years. Smokers in rural areas are more likely to die of tuberculosis while in urban India death is due to cardiovascular diseases. Further, estimates show that over a half of deaths due to tobacco smoking occur among illiterates and roughly 80 per cent are found to be from rural areas. Furthermore, cohort studies have found that in rural India, the relative risk of death due to tobacco use is 40-80 per cent higher for any type of tobacco use. In urban areas, studies in Mumbai have found that smokers had a 50 per cent higher risk of death and other tobacco consumers have a 15 per cent higher risk of death.

Given that the consumption of tobacco entails a variety of costs beyond the perception of an average smoker, it is appropriate that its consumption should be regulated. In India, although tobacco-control policy and legislation was initiated in the mid-1970s, much remains to be done to make it effective. The Indian government and civil society have made substantial progress in tobacco control, but there are considerable lags in implementation and in educating the younger generations on the hazards of tobacco use, particularly in rural areas.

Taxation has been one of the most effective ways of regulating the consumption of tobacco in most countries. In India, the Centre imposes excise duties including special excise duties and an additional surcharge for the National Calamity Contingency Fund on the manufacture of tobacco products. Since 2005-06, there is a levy of additional duties on pan masala and other tobacco products to partly fund the National Rural Health Mission. There is also a bidi workers’ welfare cess levied only on bidis, at the rate of Rs 4 per 1,000 sticks. Further, as part of a tax rental agreement, the states had transferred their powers to levy sales tax on tobacco to the Centre and since 1957 the latter has been collecting additional excise duties, and the revenue from the levy is transferred to the states. Under these regimes, tobacco products other than cigarettes and bidis are taxed on an ad valorem basis. Cigarettes of various lengths are taxed at different specific rates, by the Centre. However, the tax burden on the unorganised sector is negligible.

There are difficulties in regulating the consumption of tobacco products through tax policy because over 80 per cent of tobacco consumption is in the unorganised sector. Bidi is a widely dispersed cottage industry and so are products like gutka, snuff and chewing tobacco. While the states want to have tax powers to raise revenues, very little effort is put in to use the instrument to regulate consumption. Indeed, given the dispersed and unorganised nature of the production of tobacco products, it may be worthwhile to levy the tax at the stage of sale of tobacco and again when the tobacco products are sold. The states should redouble their efforts at extending the tax to unorganised tobacco products.

The most important regulation is to enforce the ban on smoking as well as other forms of tobacco consumption in public places. Similarly, significant additional effort is needed to educate the public on the health hazards and create an organised campaign against the consumption of not only cigarettes but also other tobacco products. It is also important to extend taxation to all tobacco products.

The author is Director, NIPFP. Comments at mgr@nipfp.org.in

First Published: Tue, September 02 2008. 00:00 IST
RECOMMENDED FOR YOU