Union Health Minister Harsh Vardhan’s anti-tobacco activism has paid off. Finance Minister Arun Jaitley Thursday announced a 11-72% hike in excise duty on cigarettes, cigars, cheroots and cigarillos in his Budget speech.
Excise duty has also been hiked by 4% on pan masala, by 5% on unmanufactured tobacco and by 10% on gutkha and chewing tobacco. Gutkha is a banned product and the government cannot charge tax on a product that cannot be legally sold. The continued absence of tax on bidi displeased health experts while some wondered whether the decision to tax cigarettes on the basis of length is the first step towards bringing bidis into the tax net. An additional 5% levy on sweetened fizzy drinks meant that India is finally on the path to tax sugar sweetened beverages as has been done in many western countries because of the rising burden of metabolic diseases.
Ever since he took over as the Health Minister, Harsh Vardhan has shot off several letters to Jaitley calling for a crackdown on tobacco productss. He had urged the Finance Ministry to increase the price of cigarettes by at least Rs 3 per stick. He had also urged the Finance Minister to bring bidis under the tax net and do away with subsidies as the industry thrives on exploitation of workers.
Health experts welcomed the hike in taxes. “The tax on sugar sweetened beverages is welcome since they are a source of risk for diabetes obesity and heart disease apart from dental caries. They are also depleting our precious water resources. Increase in taxes on tobacco products is a much needed public health measure. I wish alcohol also was brought in for a similar treatment,” said Dr K S Reddy, president of the Public Health Foundation of India.