Duty reduction for non-filter cigarettes sought

Written by Commodities Bureau | New Delhi, Mar 28 | Updated: Mar 30 2008, 04:58am hrs
Tobacco growers from Andhra Pradesh and Karnataka have opposed the Budget proposal for hiking excise duty on non-filter cigarettes ranging from 150% to nearly 400%, arguing that it will cause a 30% drop in tobacco production and thereby impact the livelihood of 3.5 million people, including the farmers.

They have demanded that the hike in excise duty on non-filter cigarettes should be only 10%, in line with excise rate increase in other categories.

The president of Karnataka Tobacco Growers' Forum, L Ananda and the general secretary of Tobacco Growers' Welfare Association of Andhra Pradesh, G Sivaram Prasad, are planning to meet the Prime Minister Manmohan Singh and finance minister P Chidambaram on Monday with a memorandum of demands.

Ananda said, "The hiking of excise duty on non-filter cigarettes will impact the livelihood of 3.5 million people involved in cultivation of low grade FCV tobacco. The companies will not procure much of low grade FCV tobacco for production of non-filter cigarettes." He alleged that the steep hike in excise duty on non-filter cigarettes would make the consumers to shift to bidis, a more toxic product. Prices of low grade FCV are between Rs 30 and Rs 40 a kg, while average price of high grade tobacco is around Rs 60 a kg.