Delhi , Feb 04: A new white paper released today by Civitas Consultancies Pvt Ltd exposes critical structural flaws in India’s tobacco control framework. The report, titled “Assessing India’s Tobacco Control Framework”, highlights a massive disconnect between public health goals and fiscal reality: while tobacco taxes generated ₹72,788 crore in 2022-23, less than 0.07% of this revenue was allocated to the National Tobacco Control Programme (NTCP).
The report argues that India’s regulatory model is outdated, focusing disproportionately on cigarettes—which account for only 10% of consumption—while largely overlooking the remaining 90% of the market dominated by beedis and smokeless tobacco (SLT).
“India’s tobacco challenge cannot be solved with a narrow, cigarette-first lens. Our consumption profile is fundamentally different—and policy must reflect that reality. When tobacco revenues are high, but investment in tobacco control is minimal, the result is weak cessation coverage, uneven implementation, and preventable disease burdens that fall hardest on the poor. A whole-of-government approach, anchored by a high-level multi sectoral council can reconcile health goals with livelihoods, formalisation, and enforcement. Incremental measures alone will not suffice.” Says Dr D Dhanuraj, Director, Civitas.
Key Findings:
● The Fiscal Mismatch: Despite being the second-largest consumer of tobacco globally, India’s investment in cessation is negligible. States like Maharashtra and Uttar Pradesh allocate over 99.5% of their NCD Flexi-Pool funding to non-cessation priorities.
● The “Cottage Industry” Loophole: Tax exemptions for unbranded beedis have created a massive shadow economy where an estimated 125 billion sticks go untaxed annually. This exemption, meant to protect small producers, inadvertently makes harmful products highly accessible to the poor.
● The Cessation Gap: Cessation services are largely urban-centric and underutilised. In 2019–20, only 1.3 million individuals (less than 0.5% of users) accessed cessation services.
● Misaligned Metrics: The government’s monitoring relies on “activity-based” metrics (e.g., number of posters displayed) rather than outcome-based metrics like verified quit rates, rendering the program procedurally compliant but effectively weak.
● India’s “blind spot” is non-cigarette tobacco: Cigarettes represent only 10% of total tobacco consumption, while SLT and beedis account for 90%—yet tobacco control remains disproportionately cigarette-centric.
● Underutilisation and volatility in programme funding: Between 2015–16 and 2022–23, only 38% of approved NTCP funds were utilised, with large state-level disparities.
● Tax loopholes enable high affordability and substitution: “Cottage Industry” exemptions allow unbranded beedis to avoid GST/cess; the report cites estimates that 31% of beedis (125 billion sticks annually) escape taxation, with major health and revenue consequences.
● Marketing and illicit trade continue to adapt: The report documents on-ground circumvention (e.g., gutkha sachets hidden inside snack packets near a school) and notes surrogate advertising during major sports properties.
Recommendations: The report proposes a “whole-of-government” approach, recommending the establishment of an Inter-Ministerial Tobacco Sector Transformation Council involving the Ministries of Finance, Agriculture, and Labour to modernise the sector. It further calls for the removal of tax exemptions for beedis and the harmonisation of taxes across all tobacco products to reduce substitution and fund dedicated cessation clinics.
“India is caught in a development trap where economic dependence on tobacco conflicts with public health,” said the authors. “We must move beyond symbolic bans and invest in modernising the sector and formalising the 45.7 million livelihoods currently stuck in the informal economy.”
The report argues that incremental tweaks are insufficient and proposes a structural reset, including:
- Harmonised taxation across all tobacco products, including removal of beedi/SLT exemptions that undermine price deterrence and encourage down-trading/substitution.
- Outcome-driven programme measurement, shifting from activity-based reporting to verifiable cessation and prevalence outcomes (including better follow-up/verification).
- Creation of a high-level Inter-Ministerial Tobacco Sector Transformation Council under NITI Aayog / PMO to align health, fiscal, labour, agriculture, trade and enforcement policy, rather than leaving direction solely to the health ministry.
- Dedicated, meaningful funding: the report’s conclusion recommends ring-fencing at least 10% of tobacco tax revenues for cessation and alternative livelihood programmes.
- Strengthen enforcement and expand track-and-trace to all tobacco products to address illicit trade, tax evasion and marketing violations.
