Sunil Jain: Reading smoke signals

PERSPECTIVES

Few doubt tobacco has serious ill effects and large health costs, but the ministry of health's proposal to use gory pictures of cancer patients on cigarette packs needs to be fully thought out, and the government first needs to come up with a plan to employ the 7-8 million workers in the sector, including 4.5 million making bidis and 2 million collecting the tendu leaves used in bidis. The issues revolve around whether people will stop smoking because of the warning signage (whether these pictures will even be visible on poorly packaged bidis is another matter!). While per capita tobacco usage has already declined, this is largely driven by education (77.5% of illiterates smoke as compared to 38.2% of those who've completed school) and income (74% of the poorest quintile smoke as compared to 38.6% for the richest quintile). So, if people continue to smoke, will they prefer to buy cigarette packs that have no such gory warnings "" such cigarettes are available from countries like the US which don't use such graphics. In which case, this could be a great opportunity for smugglers who account for 5-10% of the market even today. 
 

STILL TOXIC (With 63% rural and 39% urban households using tobacco, the usage is huge)
Per capita  expenditure on tobacco (Rs per month)	1994-95	1999-00	2000-01	2001-02	2003	2004-05
Rural	5.14	7.57	8.36	7.62	7.6	8.05
Urban	5.18	8.1	8.7	8.77	8.3	8.71
Share of non-food  expenditure (%)
Rural	4.3	3.8	3.9	3.4	3.0	3.2
Urban	2.2	1.8	1.7	1.7	1.4	1.4
Source: Indian Tobacco Industry, Oct 2007, ICRA