Health Minister Harsh Vardhan is pleased with the tobacco tax imposed by Finance Minister Arun Jaitley in the recent Budget. Not just because young people may be forced to give up smoking as cigarettes have become prohibitively expensive, but also because the ‘sin tax’ could be used to fund hospitals.

Speaking to BusinessLine , Harsh Vardhan said that the money coming in from the tax could fund a dozen AIIMSs (All-India Institute of Medical Sciences), while pricing cigarettes beyond the reach of young people.

Jaitley had increased the excise duty on cigarettes by 11-72 per cent in the Budget. The Health Minister had been a leading voice in the run-up to this change, along with other experts, who had called for higher taxes on tobacco products.

The math The increased tax on tobacco could bring in about ₹3,000 crore annually, says Vardhan. And that would mean ₹15,000 crore in the Government kitty after a full five-year term. Divide this by the cost of setting up one AIIMS, about ₹1,200 crore, and you could fund a dozen such institutes across the country, he says.

And as each institute saves the lives of millions of people, the tobacco tax becomes a tool, a two-pronged strategy, he adds.

Though happy with the hiked tax on cigarettes, a health expert points out that beedis continue to escape the net. Taxing tobacco is the best way to kill consumption, but it needs to be done on all tobacco products to be effective, he added.

Smoking alone results in about a million deaths in India annually. And about 70 per cent of these deaths occur in the productive, 30-69 years age group.

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