Budget Brings Bad News for Smokers
The announcement of the hike on excise duty on cigarettes spread like wildfire and saw some action with tobacco vendors witnessing a busy afternoon on a hot day in July.
The 11-72 per cent hike on cigarettes is sure to burn a hole in the pockets of smokers.
Precursors of the Hike
In the past, there have been a lot of awareness missions on the ills of smoking organised by the government and social groups.
Moreover, this hike in excise duty was expected since the tweet of Prime Minister Narendra Modi about cutting tobacco consumption in India.
Pros of the Hike
This decision was appreciated by some anti-tobacco lobbies which believe that,
• The rise in price will induce smokers to quit smoking.
• Youngsters who are drawn towards smoking due to peer pressure will be discouraged to do so.
• The hike in price will burn a hole in the pockets of smokers and many will quit smoking.
• There will be a decrease in cases of lung cancer and other diseases caused by smoking.
The Other Side of the Coin
But one wonders if this decision even takes into consideration the psyche of smokers.
Observing the hikes earlier, the tobacco companies presaged that hikes only persuade smokers to vouch for cheaper options, which if considered, are more noxious.
Hiking of excise duty in the past has also led to illegal trade smuggling. This illegal trade smuggling according to The Tobacco Institute of India today reports to 19% in comparison to 17% two years back.
Also, it brought an excise loss of Rs. 6000 crores to the government.
Furthermore, cigarette smokers constitute just 3% of the total smokers as most people smoke Beedies or route to cheaper options.
Keeping this in perspective, the tobacco companies previously raised their focus on sub-65mm cheaper cigarettes.
But these companies hoped that the government was unlikely to come down like a ton of bricks on poor workers who constitute the market for these cigarettes.
What Can Be Done?
The policymakers have to have a systematic view of things and must take into account all the factors that can subvert and undermine the policies.
The need is to take non-conformal actions to curb the consumption instead of coming out with such decisions without giving them a thought.