Illicit trade in tobacco tops the list, followed by mobile phones and alcoholic beverages causes the maximum revenue loss to the exchequer in the country, with the illegal market for alcohol and tobacco rapidly growing in Andhra Pradesh and Telangana.
There had seen a significant growth in the illicit trade in these states and interestingly, the supply of legal cigarettes shows a decline what with the illegal players taking over the market and together with alcohol, amounts to loss of hundreds of crores to the two Governments.
Pan-India, the total loss to Government in 2014 in respect of seven sectors including Fast-Moving Consumer Goods-FMCG (Packaged) and FMCG (Personal Goods), automobiles, computer hardware, mobile phones, tobacco and alcohol, apart from the media and entertainment industry, including broadcasting and motion pictures sectors went up from Rs. 26,190 crore in 2012 to Rs. 39,239 crore. The increase in revenue loss to the Government grew exponentially by 49.8 per cent and was put at Rs.13,049 crore between 2011-12 and 2013-14.
These facts were found in a trade report released by the Committee Against Smuggling and Counterfeiting Activities Destroying the Economy of the Federation of Indian Chambers of Commerce and Industry (FICC-CASCADE) by its Advisers P.C. Jha and Deep Chand who are former Chairman of the Central Board of Excise and Customs and former Special Commissioner of Police, New Delhi and Deputy Inspector-General of Police (Crime Investigation Department), Telangana Ravi Verma.
They expressed concern over the growing scenario and said it was now established that profits on such illicit trade, especially tobacco products, was funding terrorism in different parts of the globe.
Mr. Jha said the need for enforcement departments to function with the levels of effectiveness that they should was lacking, he pointed out. Stating an example in the automobile sector, he said that counterfeit parts account for 25,000 deaths and injuries to 93,000 persons every year.
Mr. Deep Chand said that the need of the hour was tangible actions to increase enforcement and impose increased punishments and reassure legitimate business owners and consumers that Government was serious about the problem.
Mr. Ravi Varma explained that while maximum punishment was just three years imprisonment and a fine of Rs. 2 lakh and the fine should be made in crores of rupees for it to be deterrent. Police are primarily occupied with crime control, law and order, bandobust so the Copyright Act is given least priority.
Earlier, Head of FICCI-CASCADE, Dipankar Barkakati said while it was major concern for industry and Government, it was also seriously affecting the fiscal and physical health of consumers, while also impacting India as a global brand.
