Lower beedi taxes are short-term gain but long-term pain, Pg9

Key Highlights:

• Beedis are taxed at 18% under GST, significantly lower than the 40% for most tobacco products.
• Beedi smoking is more prevalent among older, rural men from the poorest 20% of the population.
• Data indicates that over 80% of beedi smokers consume more than five sticks daily.
• Beedi smokers face higher risks of asthma, lung cancer, laryngeal cancers and tuberculosis mortality compared to cigarette smokers.
• The average monthly expenditure on beedis has increased, driven by higher consumption, unlike cigarettes where price increases are the main factor.

Detailed Insights:

• Lower beedi taxes may provide short-term savings for workers but can lead to higher healthcare costs later in life due to increased health risks.
• While cigarette smoking is evenly distributed across schooling levels, beedi use is concentrated among those with the lowest education.
• Poorer households show nearly identical rates of beedi and cigarette smokers (around 14-15%), but as wealth increases, beedi consumption drops significantly.
• A 2022 report indicates that beedi smoking poses serious health risks, including a 2.87 times higher likelihood of asthma compared to 1.82 times for cigarette smokers.
• Specific excise taxes, levied on the quantity consumed, are considered more effective in regulating beedi consumption than the current tax structure.

Key Concepts Involved:

• Goods and Services Tax (GST): An indirect tax levied on the supply of goods and services.
• Excise Tax: A tax imposed on specific goods produced or sold within a country.
• National Family Health Survey (NFHS): A large-scale, multi-round survey conducted in India.