Lower beedi taxes are short-term gain but long-term pain

Lower beedi taxes may offer short-term savings but pose severe long-term health risks, especially for vulnerable populations.

If increasing cigarette taxes is a public health measure to discourage smoking, then lowering beedi taxes to ‘protect’ rural workers ignores the long-term cost to their lives. While most tobacco products are taxed at the highest Goods and Services Tax (GST) slab of 40%, beedis are taxed at just 18%, making them significantly cheaper than cigarettes and other forms of tobacco. The latest tax rates became effective this month.

Several government reports affirm that beedis are no less lethal than cigarettes. In fact, studies quoted in reports suggest that cancer incidence is often higher among beedi smokers. Given that cancer treatment costs three times more than other ailments — even in public hospitals — capping beedi taxes is a short-sighted subsidy.

A critical distinction between beedi and cigarette consumption lies in demographics. Data suggest that there is a substantial overlap between the labour force that rolls beedis and the primary consumer base. While cigarette smokers lack a defining demographic profile, beedi consumption is confined to a much more specific socio-economic segment.

Data from the National Family Health Survey show that beedi smoking is most pronounced among older rural men from the poorest 20% of the population. So, keeping beedi taxes low may enable workers to save a few coins in their youth, only for those savings to be eroded by the exorbitant cost of healthcare in later years.

Tobacco use in India is overwhelmingly concentrated among men. As of 2019-21, about 13.3% of men smoked cigarettes, while 7.8% smoked beedis. Among women, smoking rates were around 0.1% or lower. Beedi smoking was almost twice as prevalent in rural areas (8.3%) compared to urban areas (4.5%) among men.

While beedi smokers represent a relatively smaller share of the population than cigarette smokers, their frequency of consumption is significantly higher. Data reveal a stark divide: over 80% of beedi smokers consumed more than five sticks daily, whereas over 70% of cigarette smokers consumed fewer than five. So, an important distinction is that beedi policy should not just look at the number of people smoking; it needs to look at how much they are actually smoking.