Moreover, it revealed that the excise burden (the ratio of the excise duty as a per cent of the retail price) on bidis and cigarettes has decreased significantly in the same period, making these products quite affordable.
"The excise burden on cigarettes was found to be 36.8 per cent in 2013, much lower than the World Health Organization (WHO) recommended level of 70 per cent. In the case of bidis, the excise burden was extremely low at 5.3 per cent in the same year," said the study, which was done in collaboration with the WHO and the Public Health Foundation of India.
This is in contrast to the excise burden on bidis and cigarettes, which was 7.2 per cent and 55.3 per cent in 2011 and 2008 respectively. Similarly, the total tax burden (excise duty plus value-added tax) was found to be as low as 20 per cent in the case of bidis and 59 per cent for cigarettes in 2013.
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In 2010-11, bidi constituted 58 per cent of the value of the output generated by the smoking industry, whereas it generated just three per cent of the total excise revenue. According to the study, this is not only because of low taxation on bidis but also because 56 per cent of its production is through the unorganised sector, which should be brought under the tax net.
"Higher prices of tobacco products can promote cessation and prevent initiation among young people. This study reiterates the need for development of a comprehensive tax policy for tobacco products to make them progressively less affordable over time by indexing tax increases on tobacco products to inflation," said K Srinath Reddy, president, PHFI.
However, according to the recent National Family Health Survey of 13 states, tobacco consumption is falling across India. For example, 66.5 per cent, 70.2 per cent and 53.3 per cent of the male population of Bihar, West Bengal and Uttarakhand respectively consumed tobacco in 2005-06. This stood at 50.1 per cent, 58.8 per cent and 43.7 per cent in 2015-16.