Vajpayee’s about-turn on tobacco

New Delhi, Feb 6: While anti-tobacco activists are thrilled with the Cabinet's clearing Tobacco Bill 2000 today, what's especially interes...

New Delhi, Feb 6: While anti-tobacco activists are thrilled with the Cabinet’s clearing Tobacco Bill 2000 today, what’s especially interesting is that this marks a complete U-turn on the part of Prime Minister Atal Bihari Vajpayee.

In 1999, as part of a North-East initiative, Vajpayee announced a tax holiday for all new industrial units that were set up in the region. Almost immediately, several tobacco firms put in applications to set up tobacco-processing capacity in the region — the total capacity that was applied for equalled the existing capacity in the country. In other words, tobacco firms were planning to produce most of their cigarettes in the north-east as this would help them save thousands of crore in terms of excise duties — it was also possible that a large part of this production’ would be only on paper, with units showing more production from the north-east.

With the huge tax savings, the organised cigarette industry would even be able to make big dents in the bidi industry, by being able to price their products cheaper.

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In December 1999, Finance Minister Yashwant Sinha issued a gazette notification saying that the North East tax holiday did not apply to units producing tobacco or gutka.

A few days later, an irate Vajpayee summoned Sinha, and asked him to withdraw the notification immediately — there was no way, he ordered, that Sinha could change an order passed by the Cabinet. Sinha protested, but had no option but to concur.

The finance ministry then issued another notification rescinding its earlier one — all tobacco units were to get the tax concession if they set up new capacity in the North East.

A few months ago, things began to turn against the tobacco industry. The finance ministry was once again able to issue a notification saying that the North East tax holiday didn’t apply to tobacco units — while details are not available, it is believed the potential sharp fall in future tax collections is what helped Sinha win the round finally.

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And then came today’s decision, banning tobacco sponsorships of sports events, banning smoking in public places, and even banning selling of tobacco to minors. In addition, health warnings will have to be a lot more direct, and in bold letters. Cigarette smoking is injurious to health’, and such passive warnings will no longer be good enough. These will be substituted with warnings such as Tobacco causes cancer’ — the warning, incidentally, will have to be printed in a point size large enough to fill up the largest panel of the cigarette pack (the back).

Vajpayee’s come a long way.

Now the country’s parliamentarians (who have to pass the bill), and the law-enforcement authorities have to chip in.