Opinion The gutkha nation and the welfare state

In rural areas, the surge is driven primarily by gutkha and leaf tobacco use. In cities, cigarette consumption has increased sharply, but gutkha has followed close behind. The most startling statistic in the survey concerns rural gutkha use. The share of rural households consuming gutkha has risen nearly sixfold — from 5.3 per cent to 30.4 per cent of households. Today, 41 per cent of all rural tobacco expenditure goes towards gutkha, making it the single largest tobacco product by value. Urban India, often assumed to be more health-aware, is not immune. Cigarettes remain the most widely consumed tobacco product in cities, used by 18.1 per cent of urban households. But nearly 16.8 per cent of urban households now consume gutkha, underscoring how aggressively it has penetrated city markets.

Geography sharpens the picture more. Gutkha consumption is concentrated in India’s central belt — Madhya Pradesh, Uttar Pradesh, Bihar, Chhattisgarh and Rajasthan — where prevalence far exceeds the national rural average of around 30 per cent. In rural MP, more than six in 10 households consume gutkha; UP has crossed the 50 per cent mark. What is more worrying is that urban patterns are beginning to mirror rural ones. Nearly half of urban households in MP consume gutkha, while UP, Bihar and Rajasthan all record rates well above one-third. Several states in Northeast India have also recorded gutkha consumption above the national average in both rural and urban areas. Southern states report lower prevalence overall, but even here the numbers are troubling. In Karnataka, for instance, gutkha is consumed in one in four rural households.

Equally concerning is who bears the brunt of this epidemic. Tobacco use in India is increasingly concentrated among poorer households. In rural areas, more than 70 per cent of households in the bottom 40 per cent of the income distribution consume tobacco. In UP, MP and Bihar, this figure exceeds 85 per cent. Poorer rural households spend a larger share of their MPCE on tobacco (1.7 per cent) than the top 20 per cent (1.2 per cent). Urban India exhibits an even sharper class divide. Over half of the bottom 40 per cent households consume tobacco, while usage among the top 20 per cent is below 37 per cent. The poor spend nearly twice the share of their MPCE on tobacco compared to the rich. Across both rural and urban settings, tobacco consumption remains highest among the poorest and lowest among the wealthiest.

In rural India, gutkha use cuts across classes, suggesting a worrying social normalisation. Consumption has surged across all income groups, with prevalence among the bottom 40 and the top 20 per cent households nearly identical. In urban areas, however, inequality asserts itself: More than one in five in the bottom 40 per cent of households consume gutkha, compared to fewer than one in 10 among the top 20 per cent.

The health consequences of this trajectory are well known and devastating. The Ministry of Health and Family Welfare estimates that nearly 13 lakh deaths annually in India are because of tobacco use. Tobacco is a leading risk factor for non-communicable diseases (NCDs) such as cardiovascular ailments, respiratory illness, cancer and hypertension. NCDs account for 63 per cent of all deaths in India, according to the WHO. What makes the current moment particularly fraught is the interaction between rising tobacco use and expanding public healthcare coverage. Ayushman Bharat was designed as a safety net for vulnerable families against catastrophic health expenditure. As of October 2025, over 42 crore Ayushman cards have been issued, covering nearly 12 crore families. The scheme has already helped households save an estimated Rs 1.52 lakh crore in out-of-pocket health spending.

Government health expenditure as a share of total health spending rose from 29 per cent to 48 per cent between FY2015 and FY2022, while out-of-pocket expenditure fell sharply. This is a success story, when seen partially. But declining private health spending alongside rising tobacco consumption raises a classic moral hazard concern. When tobacco use — concentrated among poorer households — drives chronic disease, the costs increasingly fall on the state. Without correctives, the long-term financial sustainability of publicly funded healthcare schemes could come under serious strain.

This risk is compounded by weak fiscal offsets. Tobacco products generated just 2.4 per cent of gross tax revenue in FY23. While the Central Excise (Amendment) Bill, 2025 proposes a hike in duties, raising the levy on chewing tobacco alone will not suffice. Regulatory oversight must be strengthened. Surrogate advertising continues unabated, with leading Bollywood celebrities promoting gutkha and pan masala under the fig leaf of “silver-coated cardamom”. Such practices should not be tolerated.

Perhaps the starkest indictment comes from household budgets. In rural India, the bottom 40 per cent households spend just 2.5 per cent of MPCE on education, while spending 4 per cent on pan, tobacco and intoxicants. A welfare state cannot credibly champion human capital development while allowing addictive products to crowd out spending on education, nutrition and health. The government’s commitment to social protection and universal health coverage cannot coexist with an unchecked rise in tobacco use. The HCES data is not just a statistical warning — it is a policy alarm bell.

Ravi is member, EAC-PM. Barman is young professional, EAC-PM