Government looks to mop up Rs. 3,800 crore

A delegation from the NLS Area Tobacco Growers Welfare Association will meet Prime Minister Narendra Modi in Delhi shortly, requesting for withdrawal of the proposal to hike the tax on cigarettes, according to association spokesman and Tobacco Board former Member Gadde Seshagiri Rao.

He expressed strong resentment at the proposal of Union Health Minister Harsha Vardhan to increase tax on cigarettes of all lengths by Rs. 2 to Rs. 3.50 per stick. Dr. Harshavardhan was quoted in the media to have recommended to Finance Minister Arun Jaitley to effect the tax increase in his budget presentation for the current financial year. The move would help the government mop up additional revenue of Rs. 3,800 crore and ‘save at least four million lives’, he stated.

Farmers’ plea

The steep increase of tax on cigarettes would have an adverse impact on the lives of over 1 lakh farmers cultivating flue-cured Virginia (FCV) tobacco in nine districts with upland regions in the State, Mr. Rao said. He asserted that the move would also force the consumers to shift to smuggled cigarettes leading to revenue erosion for the government. The peasant leaders wanted the government to explore alternatives before discouraging tobacco cultivation by way of taxation so that scores of farmers depending on the crop would not be deprived of livelihood.

When the bulk of tobacco in the country was consumed in the form of tax-inefficient and cheaper products like chewing tobacco and bidis, how the government could eradicate smoking by going against legal cigarettes alone which constitute only 12 per cent of the total volume of tobacco consumed in all forms, he asked.