Tobacco farmers in Charotar region, comprising of Anand and Kheda districts, fear a drop in prices for their produce after Union Finance Minister Arun Jaitley increased the excise duty on cigarettes, pan masala, gutkha and chewing tobacco. Farmers feel that the move will encourage traders, keen to reduce the impact of the tax rise on consumers, to end up purchasing their crop at a lower price.
As per the announcement made in the Budget, excise duty on cigarettes will be increased between 11%-72%, and that on pan masala will be raised in the range of 12%-16%. Excise duty on gutkha and chewing tobacco will be raised from 60% to 70%. Farmers in state grow two different varieties of tobacco, Desi and Kalkatti, which are used in manufacturing bidis and chewing tobacco. While the government has left bidis untouched, it has increased excise duty on chewing tobacco.