Tobacco regulation experts urge the Union Government to increase taxes on bidis

Doctors have said that bidis and smokeless tobacco are the most used tobacco products in India and are consumed disproportionately by the poor.

Hyderabad: Doctors, economists and public health advocates have welcomed the decision to increase National Calamity Contingent Duty (NCCD) on cigarettes to 16 per cent in the annual budget of 2023-24.

Experts in the field of tobacco regulation, while welcoming the move to levy more taxes on cigarettes, also urged the Union Government to increase taxes on bidis and other smokeless products that will further strengthen initiatives to reduce tobacco use in the country.

Chief Executive, Voluntary Health Association of India (VHAI), Bhavna Mukhopadhyay said, “Increasing NCCD on tobacco products is a welcome step. However the percentage increase is minimal. We hope that in future, the Finance Minister will ensure a significant increase in taxation and decrease in the affordability of all tobacco products.”

The present GST rates on tobacco products combined with the compensation cess for all tobacco products is much lower than the WHO recommended tax burden of at least 75 per cent of retail price for all tobacco products. The total tax burden is currently only about 53 per cent for cigarettes, 22 per cent for bidis and 60 per cent for smokeless tobacco.

“Increasing NCCD on tobacco products in the union budget, although at a very nominal rate, is a welcome development. If India has to become a five trillion dollar economy, then the government should revise these duties periodically to keep the affordability of tobacco products under check,” says Dr Arvind Mohan, Professor, Lucknow University.

Doctors have said that bidis and smokeless tobacco are the most used tobacco products in India and are consumed disproportionately by the poor. “They are the largest consumed tobacco product in the country. Lack of increase in taxes for the past several years has made such products more affordable,” physicians said.

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. Nearly 27 per cent of all cancers in India are due to tobacco.

The annual economic costs from all diseases and deaths attributable to tobacco use is estimated to be Rs 177,341 crores in 2017-18 amounting to 1 per cent of India’s GDP.