Taxation on Tobacco in India

An increased disposable income among Indians has expanded their tobacco purchasing power and tobacco consumption. In fact, beedis and smokeless tobacco are increasingly being used among women and children which portends that the present taxation system does not motivate users to give up smoking.

Tobacco is the major factor causing non-communicable fatal diseases in India. Tobacco consumption in India is unique and complex with various forms of smoke and smokeless tobacco. Its use is long-standing and is ingrained among Indians from varying cultural backgrounds. Also its social acceptability poses great challenges for the regulation of tobacco products and the enforcement of tobacco legislation. However, there are other barriers as well that prevent the cessation of this practice such as poverty, illiteracy, lack of awareness, aggressive marketing strategies of giant tobacco companies targeting vulnerable groups, a growing economy and a less than optimal implementation of provisions for tobacco cessation by government agencies. This article focuses on the current state of the Indian population addicted to tobacco use and the various methods used to improve cessation, with a focus primarily on taxation as a crucial measure that encourages abstinence.

Tobacco consumption is the single most important avoidable risk factor in the growth of non-communicable diseases in India (Jha and Chaloupka 1999). Tobacco-accounts for 12% to 25% of the deaths among men in India (Gajalakshmi et al 2003; Gupta et al 2005; Jha et al 2008); one half of tobacco-related deaths occur between the ages of 35 and 69 years—the most economically productive period (WHO 2002).