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Curbing tobacco use

Investing in tobacco companies may be a good business decision, but tobacco actually drains the national economy.

Curbing tobacco use

It has been proven beyond doubt that tobacco consumption is highly injurious to the health of human beings, but the crop continues to be touted as a major source of revenue and employment in many countries, including India. What this essentially means is that tobacco, despite being a significant threat to human lives, plays a critical role in ensuring a country's economic well-being. Obviously, that places the government in a tight spot, and sort of an ethical dilemma, concerning the extent of regulation that should be exercised over the production, sale, and use of tobacco and related products. However, the issue does not end there.

Dealing with the various consequences arising from tobacco use is equally, if not more, challenging for the government. The adverse impact of tobacco use on human health and at the same time the crop's supposed role as a steady revenue generator for the economy leads to an important question: Should the country's economic health take precedence over the health of its citizens?
In India, the importance of tobacco as a commercial crop can be gauged from the fact that the Centre had constituted the Tobacco Board way back in 1976, under the Ministry of Commerce and Industry, to work towards the overall development of tobacco growers and the tobacco industry. In terms of tobacco production, India occupies the third position in the world, growing 800 million Kgs of tobacco annually. Among exporters of tobacco, it stands behind the US and Brazil. Tobacco and related products bring in revenues to the tune of Rs. 20,000 crore by way of excise duty and another Rs. 5,000 crore in foreign exchange every year. In addition, the crop provides livelihood to 45.7 million people in the country, claims the Tobacco Institute of India, a representative body of manufacturers, farmers, exporters and ancillaries of the cigarettes' segment of the tobacco industry.
It is well known that tobacco product manufacturing companies rake in hefty profits. However, what may surprise many is that the lure of high returns had led even the Indian government to make substantial investments in tobacco companies through its five public sector insurance companies (LIC, New India Assurance Company Limited, General Insurance Corporation of India, Oriental Insurance Company Limited and National Insurance Company Limited) and the Specified Undertaking of the Unit Trust of India. The insurance companies claim that their investment decisions are guided by good governance and track record of the entities in which they invest. They stress that such investments are approved and permitted by the law. A PIL was filed in the Bombay High Court in April this year seeking that the public sector insurance companies divest their shareholding in tobacco companies.
While investing in tobacco companies may be a good business decision, tobacco use actually drains the national economy. According to the Ministry of Health and Family Welfare, the economic burden on the country in 2011 because of diseases attributable to tobacco use stood at Rs. 1,04,500 crore or 1.12 per cent of the GDP for the year. On the other hand, the total excise revenue from all tobacco products during the period 2011 – 14 was just 17 per cent of this cost. Over and above the economic loss, the country loses about 13.5 lakh people to tobacco related diseases every year, said a working paper that was developed to inform the discussions at the National Consultation on Accelerating Implementation of World Health Organization Framework Convention on Tobacco Control for Achievement of Sustainable Development Goals on the occasion of World No Tobacco Day 2017. The paper further pointed out that tobacco use constituted the single common risk factor for four major non-communicable diseases – Cancers, Diabetes, Cardio Vascular Diseases and Chronic Obstructive Pulmonary Diseases – which account for 43 per cent of all deaths in India.
As for the claim made by the tobacco lobby that the crop provided livelihood to a large number of people, the WHO paper said that Bidi work offered only 0.09 per cent of all compensation in the manufacturing sector (organised and unorganised) to its workers, adding that children comprised 15-25 per cent of the nearly 55 lakh Bidi workers in the country. It further highlighted that among hazardous industries, children were mostly employed in the tobacco sector (21 per cent).
Citing a number of studies and surveys, the paper mentioned various other negative impacts of tobacco use. It said that tobacco use was higher in rural areas as compared to urban areas, adding that tobacco prevalence among women in rural areas was double that of their urban counterparts. Every year, roughly 1.5 crore people in India were impoverished by tobacco use, the paper said.
Drawing attention to the harm caused to the environment by tobacco use and supply, it said that large tracts of fertile land in Andhra Pradesh had turned barren due to the crop's cultivation since the 1960s. The heavy use of pesticides and fertilisers for tobacco growing contaminated the water bodies, the paper added.
It can neither be denied nor ignored that tobacco use poses a significant threat to India's overall development. Considering that the country is the world's second largest consumer of tobacco products, it could end up paying a very heavy price in the medium to long term unless effective control measures aimed at reducing both demand for and supply of tobacco products are put in place quickly. The government acknowledges this reality and has, hence, prioritised and accelerated its tobacco control efforts. However, these efforts are getting undermined to an extent because of the investments made by its insurance arms in tobacco companies. The investments could encourage the tobacco companies to boost production and might also be wrongly perceived as indirect government support. The government should, therefore, ensure that the PSU insurers divested their shareholding in the tobacco companies. More importantly, it needs to frame clear guidelines barring PSUs from investing in companies engaged in such activities in the future. The tobacco companies can't be allowed to use public money for bolstering their balance sheets.
(The views expressed are strictly personal.)

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