New Delhi:ASPA urges the government to restrict illicit tobacco trade in a situation where, only 10 percent of cigarette consumption constitutes legal in the country.
"The legal cigarettes' share in tobacco consumption in India has declined from 21 per cent in 1981-82 to 10 per cent in 2016-17. During the same period, the overall tobacco consumption increased 33 per cent. This drop in legal cigarettes revealed the shift to illegal cigarettes," it said.
PSA advisory report 'Report for Nation – Confronting illicit tobacco trade in India for economic & development' says illicit trade siphons tax revenues and hurts the authorities' capability to provide good governance. It also reduces allocation of resources for socio-economic development, particularly in low-income nations that rely on consumption taxes.
According to experts, the yearly loss of income from tobacco taxation globally was $40-50 billion, that's about 600 billion sticks or 10 percent of consumption. Illicit tobacco trade included chewing tobacco, bidi and gutkha, it said.
Stating that all tobacco products are harmful to human health, even if produced and marketed legally, the APSA said illicit tobacco harmed people in additional ways.
It's estimated that the illegal market reduces average cigarette prices by 4 per cent and is accountable for about 2 per cent higher cigarette consumption.
In India, according to reports, usage of tax stamps has minimised the tragedies due to spurious liquor and increased the excise revenue collection by 15-20 per cent. It could generate similar results for the tobacco industry, Pasricha said.
