Tobacco may attract higher taxes

Health Minister Harsh Vardhan says tobacco use is a preventable risk factor for major diseases

Union Health Minister Harsh Vardhan plans to regulate the sale of tobacco. He said he would soon propose higher taxes on tobacco products to discourage consumption, ahead of World No Tobacco Day, on May 31. The move comes in the wake of increasing disease burden due to the use of tobacco products.

“It makes perfect economic sense to regulate the use of tobacco in order to achieve the goal of controlling non-communicable diseases in India. Tobacco use is a preventable risk factor for major diseases and the resultant economic consequences,” Vardhan said, while releasing a report on the economic burden of tobacco in India.

The report, Economic Burden of Tobacco Related Diseases in India, developed by the Public Health Foundation of India (PHFI), highlighted how tobacco use and the associated costs put  enormous economic burden on the nation. It showed that during 2011, the total economic cost from all diseases attributable to tobacco use was estimated at a staggering Rs 1,04,500 crore. This is 1.16 per cent of gross domestic product and 12 per cent more than the combined state and Central government expenditure on health care during the year. The total central excise revenue from all tobacco products combined in the same year was estimated at 17 per cent of the total economic cost of tobacco, it stated.

SMOKE IN AIR                                        Figures are for 2011

• Total economic cost attributable to tobacco use from all diseases: Rs 104,500 crore
• Direct medical costs of tobacco attributable diseases annually: Rs  16,800 crore
• Annual indirect morbidity cost due to tobacco use: Rs 14,700 crore
• Annual Cost from premature mortality due to tobacco use: Rs 73,000 crore

The report, supported by the health ministry and the World Health Organization (WHO), recommended a comprehensive tobacco control policy to ensure the government takes a holistic view so that policies of the other departments are similarly aligned. The report also recommended a tobacco taxation policy and prohibition of manufacturing and sale of all forms of smokeless tobacco products.

According to the report, massive direct medical costs of tobacco-attributable diseases amount to Rs 16,800 crore and associated indirect morbidity cost of Rs 14,700 crore. The cost from premature mortality is Rs 73,000 crore, indicating a substantial productive loss to the nation.

Cardiovascular diseases shared the highest burden of direct medical and indirect morbidity costs on account of tobacco use, followed by respiratory diseases, tuberculosis and cancer. “A tax increase that raises prices of tobacco products by 10 per cent is estimated to reduce tobacco consumption by four to five per cent,” WHO representative in India, Nata Menabde, said, emphasising that “raising taxes is one of our strongest weapons” to fight tobacco use and this is what the WHO Framework Convention on Tobacco Control mandates.