New-found addiction: What will the government do in May 2003?

The Union budget provides cancer-stick manufacturers and sellers huge reasons to feel puffed. The excise duty on nicotine (the narcotic used to spike tobacco with) has been reduced from 16 per cent to 8 per cent. An excise duty has been levied on chewing tobacco; since demand may now shift to cigarettes, this favours companies such as itc and Godfrey Philips. Jaswant Singh is joyous that the coming of value added tax "will give states the additional 1.5 per cent of all shareable taxes and duties, in order to enable them to generate more revenues, specially on textiles, sugar and tobacco products". So will the tobacco industry have to cough up more money? No...

 
Last Updated: Sunday 07 June 2015

-- the Union budget provides cancer-stick manufacturers and sellers huge reasons to feel puffed. The excise duty on nicotine (the narcotic used to spike tobacco with) has been reduced from 16 per cent to 8 per cent. An excise duty has been levied on chewing tobacco; since demand may now shift to cigarettes, this favours companies such as itc and Godfrey Philips. Jaswant Singh is joyous that the coming of value added tax "will give states the additional 1.5 per cent of all shareable taxes and duties, in order to enable them to generate more revenues, specially on textiles, sugar and tobacco products". So will the tobacco industry have to cough up more money? No. States are known to pamper the cigarette and beedi industries; they will provide other benefits that are sure to cancel this (non) burden. Most alarmingly, for the first time since 1994-1995 the central excise on tobacco and tobacco-related products has not been raised.

Only non-smokers will understand the skew in Jaswant Singh's logic. Cigarettes alone account for roughly 10 per cent of excise collections, much more than all the tax all non-smokers taken together can. So the minister must have been finance-bound to encourage smoking. Anything less would have been injurious to revenue health (he's forgotten that cigarettes cause about 6.35 lakh deaths in India every year). This apart, non-smokers are a strain on government coffers. They require institutional healthcare till the end of long, healthy lives, and always turn up to collect pensions. Good smokers, on the other hand, merely croak early.

The government's new-found addiction to the tobacco industry has another disturbing ramification. The World Health Assembly is to be held in May 2003. It will be a groundbreaking event. This is because on March 1, 2003, 171 member states of the World Health Organization (who) agreed to forward to the Assembly -- for adoption -- a public health treaty to control tobacco supply and consumption. The treaty is called the who Framework Convention on Tobacco Control. Its text covers smoking prevention and treatment, illicit trade, advertising, sponsorship and promotion, and regulation. It also covers tobacco taxation.

Ahem. Cough, cough. What face will the government of India present in the Assembly? What will it do in May 2003?

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