Slam smokers with higher tax3 min read . Updated: 24 May 2010, 09:38 PM IST
Slam smokers with higher tax
Slam smokers with higher tax
Smoking is expected to kill nearly one million Indians by the early 2010s," begins a report on tobacco use in the country called The Economics of Tobacco and Tobacco Taxation in India. We spoke to the report’s co-author Prabhat Jha, the founding director of the Centre for Global Health Research, St Michael’s Hospital at the University of Toronto, who was in Delhi last month to release the report. Edited excerpts:
According to your report, Delhi has the worst record in India when it comes to quitting. What are the reasons for this?
The numbers you’ve got on tobacco-related deaths in India look really bleak...
Our estimates suggest perhaps one million Indians are dying each year because of smoking—of those 70% occur in middle age between 30 to 69. We also know that the risks are particularly high in India, much higher than you would expect. A man who smokes beedis will lose six years of his life. A man who smokes cigarettes will lose 10 years of his life. The starting point for action is to take smoking seriously. One in 10 deaths in India are because of these consumer products (cigarettes and beedis).
Your study suggests that the most effective way to discourage smoking is higher taxes. Is it really as simple as that?
It really is as simple as that— higher taxes discourage consumption. A 10% hike in cigarette cost would result in a 3% decrease in consumption. A 10% higher price on beedis would reduce consumption by 9%. Of that effect, at least half is of current smokers quitting. It also deters people from restarting and is particularly effective with the poor and the young. The money raised from higher taxes can be used for all sorts of social and other programmes. Even the recent tax hike that Mr Mukherjee (the Union finance minister) has brought in will raise billions of rupees.
The report also suggests that changing the taxation method for tobacco...
The key issue here is that the taxation is somewhat chaotic right now. If you step back and ask what would be a rationale approach, the most obvious thing would be to tax per unit of harm. That would involve raising the tax on beedis —currently they are almost untaxed—and also administration changes, so you close the loopholes. There is a crazy distinction made between handmade cigarettes and machine-made ones, and they should end that distinction. They are the same product. The other thing is that up to two million sales annually of beedis per supplier is not taxed. So what the beedi industry does is, they break their companies into small little pieces that have a production rate below two million. So the current policy is helping tax evasion.
Since tobacco is medically proven to cause heavy chemical dependency in smokers, shouldn’t there also be better clinical strategies?
You’re absolutely right. The clinical strategy has to involve better access to things that help smokers quit. In India right now, if you have to get nicotine replacement, it’s sold only in pharmacies and it’s in a big box that’s expensive, versus, well, you can just go down to the local shop and buy individual cigarettes. The Indian pharma industry is very good at getting really low-cost generic drugs widely accessible. The government could help by incentivizing things that help smokers quit and making them widely available over the counter and at cheap prices. They should reach out through media campaigns and set up helplines to raise awareness. For example, the 2010 Commonwealth Games in Delhi will be smoke-free and that sends out an important signal to people that smoking is harmful.
The report, published in March, has been prepared jointly by the National Institute of Public Finance and Policy (NIPFP) and the Centre for Global Health Research (CGHR).