Wednesday, November 26, 2014

Health Ministry and its policy making exercise on tobacco

The Health Ministry has imposed higher taxes to deter cigarette smoking, it has recommended a ban on the sale of loose cigarettes. It is asking for three-quarters of every cigarette pack to be covered with health warnings.

All these things look good while reading out in a press meet and looks like the ministry is taking some bold steps. But, I would say it's a misplaced priority and problem lies elsewhere.

Health Ministry in UPA era  

We need to control tobacco consumption.
Lets make a  blanket rule that all public spaces should have dedicated smoking zone.
Result : Police can catch you at any moment for smoking in public space and there are no smoking zone created in most of public spaces

Health Ministry in NDA/Modi Era

We need to control tobacco sales
Lets ensure that loose cigarette are not sold
Future Result : Display new board along with existing ones or put a new one stating Loose cigarette are not sold.

Now, without getting into political drama and comments, lets take a look at the issue.

Some of the nitty gritty things which Health Minister (past/present) doesnt know

1. Cigarette smoking happens as a group activity. Indians are known to smoke one cigarette by sharing in a group. 

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2. Person used to smoking 1 single cigarette might increase it to 1 pack by banning loose stick sale

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3. Loose stick would be still be sold at premium and there would loss of tax revenue. 

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On a lighter note, try finding the beetel leaf in paan shop. Most of them have become mini tobacco shops selling cigaratte, beedi, zardha etc.

4. We are Indians, we like our beedi more than cigarette, Boss 

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Cigarette consumption is mostly urban and semi urban problem. Rural areas prefer beedi and chewing tobacco.
Bidi/Beedi consumption constitutes 35 to 40 per cent of total tobacco use in the country; it is far greater than the number of cigarettes smoked.

5. Who the hell suggested cigarette to be taxed based on length? 

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Indian tax rates for cigarettes have been based on their length and filter type, which makes unfiltered and smaller cigarettes relatively cheaper.
So, ITC is planning to move into beedi and producing smaller length cigarette so that it can keep its profits, sales etc intact.

Read on :

What should instead government focus on? 

1. We should have uniform taxes on cigarettes.

No tax benefit or rebate if one is smoking unfiltered cigarette or lesser than 70mm length. The end result is same in case of tobacco which is cancer. So, why have different taxes based on length?

2. Taxes designed in such a way that product substitution doesnt happen in tobacco. 

For example, if cigarette are costlier, a person might purchase beedi.
If beedi is costiler, he/she might shift to chewing tobacco.
So, Government should ensure that entry level tobacco product are having relatively same price if it wants to control nicotine addiction.

3. Tax the beedi, tobacco, zardha etc so that overall tobacco consumption comes down. Dont focus all the attention on cigarette alone. 

According to report "The Economics of Tobacco and Tobacco Taxation in India",
Raising bidi taxes to Rs 98 per 1000 sticks would add Rs 36.9 billion to tax revenues and prevent
15.5 million current and future smokers dying prematurely; increasing cigarette taxes to Rs 3691 per 1000 sticks would further add Rs 146.3 billion to tax revenues and prevent 3.4 million premature deaths.

For long time, beedi has been kept out of all this policy making exercise stating that beedi industry employs lot of people. Tribal people make a living by collecting leaves for beedi etc.
Anything related to this sector could affect the vote bank. Therefore, politicians tend to keep away from this sector even though a considerable set of people are affected by beedi.

4. Educate the youth right at the school and college level. 

According to report "Tobacco prevention program in Indian schools" ; it was noted that if Teacher, peer group get the education at school level ; tobacco consumption would reduce drastically.

But , there is one more interesting observation which our Education Minister should take note of
Teachers, in the Indian school settings, amidst their busy schedule do not get time to revise the curriculum before its actual delivery.

Complete report on :

Revenue of cigarette companies will be impacted by the ban on loose cigarettes but the public is known for finding its way through to get around this ban. Even Cigarette manufacturers might try to introduce new forms of packing to increase sales or move into other products.

But, a ban on loose cigarette is also difficult to implement considering that there are 7-8 million retail outlets in India and regulating them at same time is going to be a nightmare.
Instead the Health ministry should ensure that people are educated and have the right education to reject the tobacco at a early stage of their life ; then it wont need such regulatory measures in place which comes with a additional cost. 

1 comment:

Guruarj M said...

ಹರ್ಷ ರವರೆ,

ತುಂಬಾ ಒಳ್ಳೆಯ ಮಾಹಿತಿ.