The Union Finance Ministry has decided to impose additional excise duty on tobacco products starting February 1. This decision aims to curb smoking. However, it's not just tobacco users who are worried about the price increase of cigarettes, bidis, gutka, and zarda. Tobacco farmers are also concerned. The Federation of All India Farmer Association (FAIFA) has strongly opposed this government decision.
The organization claims that this measure will cause severe financial losses to tobacco farmers in India. Representing thousands of tobacco farmers from Andhra Pradesh, Telangana, Karnataka, and Gujarat, FAIFA stated that the government had earlier promised revenue-neutral tax reforms. This new decision to impose duties on tobacco products goes against that promise.
Farmers warn of losses and illegal trade
Additionally, smuggling or illegal trade in the market will increase further. According to FAIFA, the Indian market is already flooded with illegal tobacco products. If the tax burden increases on top of this, the prices of legal products will rise. Consequently, buyers will turn even more toward cheaper and illegal products. This will result in reduced government revenue on one hand, while farmers' income will hit rock bottom on the other.
Last month, the Union Finance Ministry issued a notification stating that for chewing tobacco, zarda, and gutka, the duty amount has been determined based on the capacity of packing machines. For cigarettes, duties ranging from Rs 2,050 to Rs 8,500 per 1,000 sticks have been imposed depending on the length of the sticks.
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This is expected to significantly increase the prices of these tobacco products in one leap. Speculation is circulating on social media that cigarettes priced at Rs 18 will reportedly cost Rs 72. The government claims this will reduce tobacco product usage and protect citizens' health. However, the tobacco farmers' warning suggests otherwise.
