A 50 per cent rise in cigarette prices (corresponding to a tax increase of 70-122 per cent) would avoid over four million tobacco-related deaths in India.

This has been highlighted in a new Asian Development Bank (ADB) report titled ‘Tobacco taxes: A win-win measure for fiscal space and health’.

This report aims to assess how changes in cigarette taxes can reduce consumption and save lives in the high-burden countries in Asia.

Two-thirds of the world’s tobacco users live in just 15 countries, and five of these high-burden countries (People’s Republic of China, India, Philippines, Thailand, and Vietnam) are in Asia.

In the five countries, a 50 per cent price increase, corresponding to a tax increase of about 70–122 per cent, would reduce the number of current and future smokers by nearly 67 million and reduce tobacco deaths by over 27 million.

It would generate over $24 billion in additional revenue annually (a 143-178 per cent increase over each country’s current cigarette tax revenue).

The revenue increase or “fiscal space’’ averages 0.3 per cent of gross domestic product with a wide range of 0.07–2.52 per cent.

The ADB report has also highlighted that Indian male smokers can expect to lose a full decade of life and most lives lost are at the most productive age of 30-69 years, rather than an advanced age. Around 10 per cent of Indian men smoke, according to the ADB report.

Switching to cigarettes from bidis is occurring. But a switchback is likely if only cigarette prices rise. So parallel tax increases on bidis as well as better oversight of the industry would be ideal, the report said.

Additional taxes would help close the fiscal deficit. In India, poor people would account for 30 per cent of the additional taxes paid but 47 per cent of deaths averted.

In the absence of intervention, smoking will eventually kill about 267 million current and future cigarette smokers who are alive today in the five countries.


(This article was published on November 15, 2012)
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