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Context

Tobacco is a silent killer in our midst that kills an estimated 1.35 million Indians every year.

Status of Tobacco Consumption in India

• According to the Global Youth Tobacco Survey, India has the second-largest number (268 million) of tobacco users in the world and of these 13 lakh die every year from tobacco-related diseases.
• Ten lakh deaths are due to smoking, with over 2,00,000 due to second-hand smoke exposure, and over 35,000 are due to smokeless tobacco use.
• About 27 crore people above the age of 15 years and 8.5% of school-going children in the age group 13-15 years use tobacco in some form in India.
• India bears an annual economic burden of over ₹1,77,340 crore on account of tobacco use.
• Tobacco use is known to be a major risk factor for several non-communicable diseases such as cancer, cardiovascular disease, diabetes, and chronic lung diseases.
• Nearly 27% of all cancers in India are due to tobacco usage.

Socio-Economic Burden of ‘Tobacco’

• In India, over 1.3 million deaths are attributable to tobacco use every year amounting to 3500 deaths per day, imposing a lot of avoidable socio-economic burden.
• In addition to the death and diseases it causes, tobacco also impacts the economic development of the country.
• Smokers face a 40-50% higher risk of developing severe disease deaths from Covid-19.
• As per the WHO study titled “Economic Costs of Diseases and Deaths Attributable to Tobacco Use in India”, it has been estimated that the economic burden of diseases and deaths attributable to use of tobacco in India was as high as approx 1% of GDP.

Measures towards tobacco control in India

• India adopted the tobacco control provisions under WHO Framework Convention on Tobacco Control (WHO FCTC).
• Cigarettes and Other Tobacco Products Act (COTPA), 2003:
  • It replaced the Cigarettes Act of 1975 (largely limited to statutory warnings- ‘Cigarette Smoking is Injurious to Health’ to be displayed on cigarette packs and advertisements. It did not include non-cigarettes).
  • The 2003 Act also included cigars, bidis, cheroots, pipe tobacco, hookah, chewing tobacco, pan masala, and gutka.
• Promulgation of the Prohibition of Electronic Cigarettes Ordinance, 2019: Which prohibits Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement of e-Cigarettes.
• National Tobacco Quitline Services (NTQLS): Tobacco Quitline Services have the potential to reach a large number of tobacco users with the sole objective to provide telephone-based information, advice, support, and referrals for tobacco cessation.
• mCessation Programme: It is an initiative using mobile technology for tobacco cessation.
  • India launched mCessation using text messages in 2016 as part of the government’s Digital India initiative.

How do the price and taxation of tobacco matter?

• Although not a communicable disease like SARS-CoV-2, the tobacco epidemic — as the World Health Organisation characterizes it — has some definitive solutions that can reduce the death toll.
• Research from many countries around the world including India shows that a price increase induces people to quit or reduce tobacco use as well as discourages non-users from getting into the habit of tobacco use.
• There is overwhelming consensus within the research community that taxation is one of the most cost-effective measures to reduce the demand for tobacco products.
• There has been no significant tax increase on any tobacco product for four years in a row.
• This is quite unlike the pre-GST years where the Union government and many State governments used to effect regular tax increases on tobacco products.
• As peer-reviewed studies show, the lack of tax increase over these years has made all tobacco products increasingly more affordable.
• The absence of a tax increase on tobacco has the potential to reverse the reduction in tobacco use prevalence that India saw during the last decade and now push more people into harm’s way.
•  It would also mean foregone tax revenues for the Government.
• High and increasing tax rates provide a profitable opportunity for tax evasion and encourage growth in illegal trade.

What is the Taxation Scenario of Tobacco in India?

• Ever since the introduction of the Goods and Services Tax (GST) legislation in 2017, there has been no significant tax increase on any tobacco product.
• There was only a minor increase in the National Calamity Contingent Duty (NCCD) during the Union Budget 2020-21 which only had the effect of increasing cigarette prices by roughly 5%.
• The Union Budget 2022-23 was an excellent but lost opportunity for the Government of India to buck this trend and significantly increase either excise duties or NCCDs.
• No significant tax increase on any tobacco product for four years in a row has made all tobacco products increasingly more affordable.
• More affordable tobacco products could attract new users especially among the youth.
• It would also mean foregone tax revenues for the Government especially at a time when the Government of India is looking forward to increasing the share of public spending on health

The decline in Tobacco Consumption

• The prevalence of tobacco use has decreased by six percentage points from 34.6% in 2009-10 to 28.6% in 2016-17.
• Under the National Health Policy 2017, India has set an ambitious target of reducing tobacco use by 30% by 2025.

WHO Framework Convention on Tobacco Control

• Governments adopt and implement the tobacco control provisions of the WHO Framework Convention on Tobacco Control (WHO FCTC).
• It is the first international treaty negotiated under the auspices of the WHO.
• It was adopted by the World Health Assembly (apex decision making body of WHO) on 21^st May 2003 and entered into force on 27^th February 2005.
• It was developed in response to the globalization of the tobacco epidemic and is an evidence-based treaty that reaffirms the right of all people to the highest standard of health.
• The FCTC’s measures to combat tobacco use include:

1. Price and tax measures.
2. Large, graphic warnings on tobacco packages.
3. 100% smoke-free public spaces.
4. A ban on tobacco marketing.
5. Support for smokers who want to quit.
6. Prevention of tobacco industry interference.

Way Forward

(1) Opportunities in Budget

• The government should take a considerate view of public health and significantly increase excise taxes — either basic excise duty or National Calamity Contingent Duty (NCCD) — on all tobacco products.

• Fixing an excise tax of at least ₹1 per stick of bidis while aiming for a significant increase in the excise tax of cigarettes and smokeless tobacco products.
• Taxation should achieve a significant reduction in the affordability of tobacco products to reduce tobacco use prevalence and facilitate India’s march towards sustainable development goals.

(2) Role of GST Council

• There is absolutely no public health rationale why a product as harmful as a bidi does not have a cess levied on it under the GST or why the specific cess applied on cigarettes has remained unchanged for four years in the face of increasing inflation.

• GST Council meetings must strive to keep public health ahead of the interests of the tobacco industry and significantly increase either the GST rates or the GST compensation cess rates applied on all tobacco products.
• The aim should be to arrest the increasing affordability of tobacco products in India and also rationalise tobacco taxation under the GST.

(3) Tobacco Control Laws

• It is scientifically established that if a person is kept away from tobacco till the age of 21 and above, there is a very high probability that he/she will remain tobacco-free for the rest of their life.
• The experts have urged the government to increase the legal age of sale of tobacco products from 18 to 21 by amending the Cigarettes and Other Tobacco Products Act (COTPA), 2003.
• Also, imposing a comprehensive ban on tobacco advertising and banning sale of single sticks of cigarettes/bidis would go a long way in preventing children and youth from initiating tobacco use.
• At least 14 countries (Ethiopia, Guam, Honduras, Japan, Kuwait, Mongolia, Palau, Philippines, Samoa, Singapore, Sri Lanka, Thailand, Uganda, and the U.S.) have now increased the minimum age to 21 for buying tobacco products.
• At least 86 countries have banned the sale of single stick cigarettes to control their easy accessibility and affordability to youth.

(4) Educating Children

• The role of teachers is most crucial in creating awareness among children and their parents about harm due to tobacco use and for shaping the attitude of children in this regard.
• The more and the sooner awareness is created among children about harms due to tobacco use, the better will be the outcomes in terms of reduction in the prevalence of tobacco use among children and consequently among adults.
• Harmful effects of tobacco use should be incorporated in school curricula at various levels starting right from the primary school level.

Conclusion

The aim should be to arrest the increasing affordability of tobacco products in India and also rationalize tobacco taxation under the GST.

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