There must be tighter taxes on cigarettes and bidis in order to discourage people from smoking, Indian, American and Canadian economists and public health experts have recommended.
Their report called `Economics of Tobacco and Tobacco Taxation in India' was released by Dr Govinda Rao of the National Institute for Public Finance and Policy and Dr Prabhat Jha of the Centre for Global Health Research.
The team said that 18.9 million lives could be saved every year in India if the government raised the tax on bidis from 9% to 40% and on cigarettes from 38% to 78% of retail price. This equates to a rise from Rs 14 to Rs 98 per 1,000 sticks for bidis and Rs 659 to Rs 3,691 per 1,000 sticks for cigarettes.
The WHO has recommended taxes of 65% to 80% for cigarettes, but they remain at 40% in India. "Tobacco taxes in India are not regularly adjusted for inflation and over time, tobacco products are becoming increasingly affordable," the report said.
By 2020, 13% of all deaths in India would be related to tobacco, the report added. It is estimated that 10% of the world's tobacco smokers live in India.