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ADB suggests 50 pc hike in fag price

New Delhi, Nov 21, 2012 , DHNS

India can save tens of lakhs of lives and simultaneously earn billions of dollars in revenue if the government increases cigarette price by 50 per cent by imposing additional taxes, the Asian Development Bank has suggested.

Public health workers for long have demanded a steep rise in taxes on tobacco, which may act as a deterrent for smokers.

The ADB study suggested that as many as 41 lakh lives could be saved if the price of cigarette is hiked by 50 per cent. The move will also generate an additional revenue of $ 2.2 billion for the government.


At present, India has 47.8 million smokers, of which 23.9 million are expected to die, going by medical evidence cited in the ADB report.

Asia houses five of the high tobacco-burden countries - China, India, Philippines, Thailand and Vietnam. A 50 per cent hike in price of cigarette, corresponding to 70-122 per cent tax enhancement, will lower the number of smokers by nearly 67 million and reduce tobacco related deaths by 27 million.

Ten million Indians will either not pick up smoking or quit following the price rise, claimed the survey, which excluded beedi and smokeless tobacco from its purview. The study was presented at the World Health Organisation's global tobacco control meeting at Seoul last week.

The Central government has done precious little to discourage smokers apart from a marginal increase in tax on cigarettes and preventing foreign direct investment in the tobacco sector, Bhavna B Mukhopadhyay, executive director of the Voluntary Health Association of India, told Deccan Herald.

Several states like Bihar, Goa, Himachal Pradesh, Jammu and Kashmir, Karnataka, Rajasthan and New Delhi have raised VAT on tobacco products by more than 20 per cent.

In his 2010-11 budget speech, then finance minister Pranab Mukherjee urged everybody to quit smoking. But barring a small hike in excise duty on cigarette, he did not take any significant action in the last two years to deter the public from picking up the deadly habit, Mukhopadhyay said.

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