Monday, March 19, 2001
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First curb contraband cigarettes, then legislate on tobacco 

SM Anantharamu  
The proposed Tobacco Products Control Bill that the central government has introduced in the Rajya Sabha will further hurt the already seriously damaged interests of tobacco growers in India.

The Bill does not even take cognisance of the burgeoning menace of contraband cigarettes in India, that is growing with alarming rapidity. The market for cigarettes as a whole in the country is stagnating at 97 billion cigarettes per annum for the last 10 years. The per capita consumption of cigarettes has, therefore, significantly declined, because the population has considerably increased during the last 10 years. But the menace of contraband cigarettes is growing at a frightful rate of 20 per cent every year. At present, the extent of trade in contraband cigarettes is estimated at around five to seven billion cigarettes a year.

We do not seem to adequately appreciate what damage smuggled cigarettes are doing to our economy. Contraband cigarettes deprive the government of India of the legitimate excise revenue that it would otherwise have earned. If these smuggled cigarettes of premium international brands were prevented from entering India, it is only logical to expect that more domestically manufactured cigarettes would have sold instead. This would have earned the government proportionately more excise revenue and also ensured consumption of locally grown tobacco. Cigarettes contribute nearly Rs 8,000 crore by way of excise duty to the government every year, which is 90 per cent of all the excise accruing from tobacco and tobacco products.

Contraband cigarettes are also a sizeable drain on the country's precious foreign exchange reserves. It is well known that payments in hard cash in foreign currency are made regularly by local traders to overseas agents of foreign cigarette MNCs for smuggled cartons.

As far as we farmers are concerned, every packet of contraband cigarettes that is sold on Indian soil means that so much less of Indian tobacco is being utilised. Let us understand that none of the foreign cigarette multinationals use any Indian tobacco to manufacture their brands, and most certainly not for any of their premium international brands, which are the ones being smuggled into the country. Therefore, rampant free trade in smuggled cigarettes is directly hitting and hurting India's tobacco farmers.

Sadly, the proposed tobacco control Bill does not even make a passing reference to the scourge of contraband cigarettes. About 30 million farmers in the country depend on tobacco for their basic livelihood. Therefore, it is not fair on the part of the Union government to consider a comprehensive and draconian tobacco control law without taking a single step to curb the open sale of smuggled cigarettes. A tobacco control law will have to delicately balance between the interests of tobacco farmers, agricultural labourers, government revenue, bidi labourers, cigarette manufacturers, and considerations of public health. In the case of contraband cigarettes, there is no such tightrope walking involved. Smuggled cigarettes hurt every section of swadeshi interest.

What is more, every packet of contraband cigarettes violates a plethora of existing laws: the Cigarettes Act of 1975, the Weights and Measures Act of 1976, the Customs Act and the Excise Act. Some of the steps that government has to take to curb the sale of contraband cigarettes are also clear, like forbidding the sale of duty-free cigarettes, not allowing the import of cigarettes for re-export, harmonising import duty rates within Saarc countries, and retaining quantitative restrictions (QRs) on cigarette imports in the interest of national health and pre-empting a further spurt in contraband cigarette sales.

Instead, the central government has proposed, in its tobacco control Bill, the disclosure of tar and nicotine contents on every tobacco product pack. This is guaranteed to compound the woes of Indian tobacco farmers. Indian tobacco contains more tar and nicotine than that grown in several other countries. There are no certified international methodologies of measurement of tar and nicotine levels in tobacco products. Neither are there any specifications of acceptable tar and nicotine levels that are adopted across several countries. Disclosure of tar and nicotine contents can also be dangerously misleading in an illiterate country like ours.

Over and above, there is no conceivable government infrastructure, machinery or apparatus in place to monitor the market and verify the tar and nicotine levels in different tobacco product packs.

(The writer is president, Karnataka State Tobacco-Growers' Forum)

Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.

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