Appeals Govt to continue tax increase on tobacco to an optimal level for a positive public health impact and substantially increased tax revenues to Govt.
The Government of India has announced an increase in National Calamity Contingency Duty on cigarettes as part of its 2023-24 budget, aimed at reducing consumption and promoting public health. The move has been welcomed by economists, public health specialists, and civil society organizations alike.
While presenting the Union Budget 2023-24 in Parliament, Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman proposed to revise National Calamity Contingent Duty (NCCD) on specified cigarettes upwards by about 16 percent. The NCCD on specified cigarettes was last revised three years ago.
Economist, Prof.R.S. Deshpande, Former Director, Institute of Social and Economic Change said, “We appreciate Govt of India for taking note of the need for an increased tax on tobacco products under the Budget 2023. Karnataka No for Tobacco (KNOT) had proposed tax hike of Rs.1 per beedi stick, Rs. 12 per Cigarette and double the tax on smokeless tobacco products. However, the increase was brought only on cigarettes at 16%of the NCCD (Fixed amount for every 1000 sticks of cigarette based on size and filter) which constitutes to average Rs.0.08 per stick. Though the current tax measure is not sufficient to bring significant health impacts, this is a positive step from Govt to look at possibilities of increasing tax across all tobacco products for better public health outcomes as the majority of the tobacco users are from the poor and marginal sections of society using products like beedis and smokeless tobacco.”
Doctors, public health groups, youth and economists have been urging the Government to increase taxes on cigarettes but on bidis, and smokeless tobacco as this is a winning proposition. for generating revenue and reducing tobacco use and related diseases.
Dr.Vishal Rao, Surgical Oncologist and Member of the High-Power Committee for Tobacco Control said “Parliamentary Standing Committee on Health had proposed the hike on tobacco taxes sighting the increasing cancer cases and India having the lowest tobacco prices. Optimal taxation will reduce the new entries into tobacco use predominantly youth and help reduce the instances of non-communicable diseases such as cancer, cardiovascular diseases, respiratory diseases, and others which is claiming more than 13 lakh lives every year in India.
The government’s commitment to reducing tobacco use and promoting public health through this tax hike is commendable and is a positive step toward the health of the nation. However, the tax rates that will bring significant health outcomes are to be worked out and across all tobacco products. This move will also align with India’s commitment to WHOs Framework Convention for Tobacco Control along with other countries that have taken similar steps to reduce tobacco consumption and improve public health outcomes”.
The Parliament Standing Committee on Health submitted a pertinent and comprehensive report on Cancer Care Plan and Management in which it undertook a detailed study of the causes of cancer in India and noted with concern that in India, “the highest number of lives lost is due to oral cancer caused by tobacco, followed by cancer of the lungs, oesophagus and stomach.” It also noted that tobacco use is one of the most prominent risk factors associated with cancer. In viewof these alarming observations, the Committee has noted that India has one of the lowest pricesfor tobacco products and there is a need to increase taxes on tobacco products. The Committee accordingly recommended that the Government raise taxes
Prof. (CAPT.) A.Nagaraj Subbarao, Professor of Strategy and Dean – SCMS, Dayananda Sagar University, Bengaluru said, “As per GYTS 2019, more than 16% of youth (13-15 years) have used tobacco, and the mean age of initiation is ten years. The increased taxes on cigarettes in Budget 2023 is, in my opinion, a commendable step taken by the Government of India and should be considered a litmus test to bring optimal taxation measures across all tobacco products, which reduce its affordability, curtail the initiation of tobacco use among youth, discourage its proliferation among incumbent users and also help generate additional revenues for the Government for constructive developmental projects”.
Tobacco has been one of the top public health concerns across the world claiming more than 8 million lives each year. 5 out of the top 6 killer diseases in India are vastly contributed to tobacco which includes CVD, Cancer, stroke, diabetes, and respiratory diseases. India has the second largest number (268 million) of tobacco users in the world and of these 13lakhs die every year from tobacco-related diseases. Nearly 50% 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 Rupees 177,341 crores in 2017-18 amounting to 1% of India’s GDP.
