Bidi companies have changed quite effectively. In keeping up with the times, bidis now have contemporary names like Enigma, Black Swan and 8AM, and are offering a lot more than ever before. This includes organic bidis, bidis with flavours and slick packaging for the new-age consumer. Unlike in the rest of world where cigarettes account for 84% of tobacco sales, in India it is bidis that account for well over 85%, while cigarettes come in at a mere 12%. Though the traditional tobacco companies are large, the multitude of bidi companies have a huge market to play with since India is the second-largest producer of tobacco, at 875,000 million tonnes, after China and also ranks second in tobacco users (275 million). The huge demand for bidis is driven by prices that are much lower than that of cigarettes. That is primarily because while taxes on cigarettes have increased substantially, bidis have been spared. Taxes on bidis account for just 7% of retail prices, while it is 43% for cigarettes. Yet, the tax rate in India is much lower than the 70% recommended by the World Health Organisation (WHO).
The problem with the government’s strategy against tobacco is that it is almost solely fixated on cigarettes—despite being aware of the ill-effects of tobacco, the government has been loathe to raise taxes on bidis, supposedly because they are consumed by the poor; the problem with that logic, however, is that it is also the poor who can least afford the treatment that can be required later. It is time taxes were raised on bidis in the same way they have on cigarettes. Also, while the government has been pushing cigarette companies to include graphic images on packaging, the same has yet to be introduced for bidis.
While putting bidis and cigarettes on a par is an important issue, there is a larger problem that needs to be dealt with. And that is the unrelenting rise in demand despite the hike in prices. So, if the government is serious about curbing tobacco usage, it needs to target the growing of tobacco by weaning away farmers to other cash crops over a period of time. Precious little, however, has been done on that front, possibly because the tobacco industry generates R28,000 crore of taxation revenues and R6,000 crore in foreign exchange earnings annually to the government. Also involved are six million farmers and another 5 million who are employed as bidi-rollers. Until this fundamental question is resolved, much of the action against tobacco will be primarily aimed at maximising revenues for the government.
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