Tobacco Usage and Implications.

NEWS HIGHLIGHT

Theme : Health ; Government Policies
Paper:GS - 2

As estimated by scientific studies, the consumption of tobacco results in the death of more than 3,500 Indians every single day.

TABLE OF CONTENT

1. Context
2. Tobacco Consumption in India
3. Steps taken by India to Control Tobacco Consumption
4. Consequences of Increase in Taxes on Tobacco
5. Taxation of Tobacco in India
6. What can be done ?

Context : As estimated by scientific studies, the consumption of tobacco results in the death of more than 3,500 Indians every single day.

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.
• 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.

Steps taken by India to Control Tobacco Consumption : 

• India adopted the tobacco control provisions under WHO Framework Convention on Tobacco Control (WHO FCTC).
• The Promulgation of the Prohibition of Electronic Cigarettes Ordinance, 2019 prohibits Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement of e-Cigarettes.
• The Government of India launched the National Tobacco Quitline Services (NTQLS) which have the sole objective to provide telephone-based information, advice, support, and referrals for tobacco cessation.
• mCessation Programme is a similar initiative which uses mobile technology for tobacco cessation. It was launched in 2016 as part of the government’s Digital India initiative.

Consequences of Increase in Taxes on Tobacco : 

• 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 demand for tobacco products.
• As it hurts both revenue and profits, the tobacco industry, globally, is always devising tactics and narratives that will preempt any kind of tax increases on tobacco products.
• High and increasing tax rates provide a profitable opportunity for tax evasion and encourage growth in illegal trade.

Taxation 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.

What can be done ?

• 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 rationalize tobacco taxation under the GST.
• 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.
• 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.
• Harmful effects of tobacco use should be incorporated in school curricula at various levels starting right from the primary school level.

FAQs : 

1. What is the situation of Taxation of Tobacco in India?

ANS. 

• 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%.

2. Are there any countries which have increased the Minimum age for Tobacco Products?

ANS. 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.