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Ahead of the annual Budget for 2014-15 to be announced by the Modi-led Government in July, Health Minister Harsh Vardhan has sent a letter to Finance Minister, Arun Jaitley, requesting for a big hike in taxes on cigarettes.
In his letter, Vardhan said: “I am of the view that the top priority is to reduce smoking of cigarettes and bidis. The heart of this would be a substantial large tax hike that would add up to Rs 2 (to Rs 3.50 per stick).”
This would raise the prices of short-length cigarettes to Rs 5.50 per stick — an almost 60 per cent increase in prices.
His letter adds that the previous UPA Government’s decision to increase the tax on longer length cigarettes by 19 per cent in 2013 did not have the desired effect because the hike was not sufficient. Further, the manufacturers started producing more short-length cigarettes to circumvent the hike.
He further called for regularisation of the bidi industry and removing the tax exemptions offered to bidi manufacturers producing less than 2 million bidis.
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