Smokescreens

So, it’s that time again – anticipating and doing an antemortem of the drool-worthiness of the upcoming budget.

Well, there are some cats out of the bag already, setting the tone – one litre of liquor in duty free instead of two and no cigarette cartons allowed anymore. That is the commerce ministry’s suggestion, before the Budget 2020.

A quick look at the tobacco industry

Tax on bidis post-GST is only 22 per cent compared to 53 per cent for cigarettes and about 60 per cent for smokeless tobacco. WHO recommended rate is 75 per cent.

Bidi manufacturing in our country is huge and is seen as a cottage industry, so gets away with minimal taxation. 

Time and again it has been debated whether governments should do more to bring in the bidi industry under some scanner. However, it is common knowledge that some of the biggest manufacturers are privately held companies run by political bigwigs raking in the moolah and making sure the sector continues unregulated.

What is left unsaid, the industry is also one of India’s top producers of black money!

In the last 2 decades itself while taxes on cigarettes have gone up by upwards of 1000%, 90% + bidi manufacturers invite no tax at all as they are not even registered.

According to certain estimates, the real or inflation-adjusted excise rate on bidis is 20 per cent lower compared to a decade ago.

Another matter that WHO reports suggest deaths by bidi alone outnumber all other tobacco products combined. Well, so much for letting the small devil run amok on the back of social equity.

Various researches in recent times have highlighted that bidis are more dangerous than normal cigarettes, given they are smoked in greater quantities, with more frequent and deeper puffs.

WHO reports point at India harboring the world’s highest incidence of mouth cancer.

While all of the above are well documented and recognized facts, even if they are brushed aside every time under political compulsions and appeasement policies – 8 million + jobs and votes - what really needs a solve is the employment the industry generates.

~95% of bidis are hand-rolled and there are ~8 million people rolling away these smoke joints.

For long it has been the most real and powerful argument against bidi taxation – the livelihood it generates for the rural poor; 90% of them being women.

This too is a two-way sword – the employment we talk of is sheer exploitation with the 130-170 being the going rate to roll 1000 bidis in a day. And continuous exposure to tobacco dust, raises the risk of respiratory diseases like tuberculosis and asthma, as well as dermal and postural problems.

So, the real need is to transition this workforce into other modes of heathier employment and lift this smokescreen.

What remains to be seen is the political will and muscle to get the ball rolling on taxing bidis and regulating this menace.