Delhi: The incidence of tobacco consumption and expenditure has risen significantly in rural and urban India between 2011-12 and 2023-24, posing serious implications for public health and fiscal sustainability, a working paper by the Economic Advisory Council to the PM (EAC-PM) said.
The paper suggests a multi-pronged strategy that includes rationalizing and strengthening tobacco taxation across products; tightening enforcement against illicit and surrogate sales; expanding targeted awareness campaigns; and integrating preventive counselling within primary healthcare systems to curb tobacco consumption in the country.
The working paper titled ‘Rise in Tobacco Consumption and Policy Implications An Analysis of Household Consumption Expenditure Survey 2011-12 and 2023-24’, written by EAC-PM member Shamika Ravi Member and Partha Protim Barman, young professional at EAC-PM, said curbing tobacco consumption is central to safeguarding both population health and the long-term sustainability of public finance.
As per the paper, rising tobacco consumption implies higher morbidity, premature mortality, and greater long-term healthcare demand in the years ahead.
“At a time when public expenditure on health has expanded and financial protection through government insurance schemes has deepened, the growth in tobacco use risks placing additional strain on public resources,” it said.
According to the paper, per capita spending on tobacco rose sharply between 2011-12 and 2023-24 by 58 % in rural India and 77 % in urban areas with 13.3 crore tobacco consuming households in rural India in 2023-24 compared to 9.9 crore while urban India has 4.7 crore tobacco consuming households compared to 2.8 crore.
Cigarettes remain the most widely consumed tobacco product in cities, used by 18.1 % of urban households closely followed by gutkha accounting for 16.8 % of urban households consuming it which is predominantly consumed in Madhya Pradesh, Uttar Pradesh, Bihar, Chhattisgarh and Rajasthan.
Arguing the fiscal implications of this, the paper argued that concentrated use of tobacco among poorer households drives chronic disease and the cost falls on the state funding public healthcare under the Ayushman Bharat scheme of the government.
“Without corrective action, the long-term financial sustainability of publicly funded healthcare schemes could come under serious strain,” it said, adding that this risk is compounded by weak fiscal offsets.
“A significant hike in duties, raising the levy on chewing tobacco to 100 % tax policy alone will not suffice,” it said, suggesting the need to strengthen regulatory oversight on advertising and promotional strategies.
The ministry of health and family welfare attributes nearly 13 lakh deaths annually in India to tobacco which is a leading risk factor for non-communicable diseases (NCDs) such as cardiovascular disease, respiratory illness, cancer and hypertension.
It is estimated that the government’s health expenditure as a share of total health spending has risen to 48% in FY2022 from 29 % in FY2015, resulting in a sharp fall in out-of-pocket expenditure.
“A welfare state cannot credibly champion human capital development while allowing addictive products to crowd out spending on education, nutrition and health. India stands at a crossroads,” the paper said, cautioning that the government’s commitment to social protection and universal health coverage cannot coexist with an unchecked rise in tobacco consumption.
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