Smoke 'em out

Now that I have resigned from my job, I feel as if I can interchange the number of hours I work and the number of hours I spend on breaks. These days I just get up and go out with anyone for a break. A few days back I went out with a colleague of mine (who smokes like 8 cigarettes a day and also looks like one) to the most happening place around my office i.e the Tapri. Tapri is a small shop placed at a point outside the office which sells Tea, Biscuits and Cigarettes. The shop usually consists of only a small table with all the above stuff and a small chair for the shopkeeper to sit and a huge umbrella to provide shade depending on the climate and the shopkeeper here normally ends up earning much more than the professionals who go there to smoke. You will find more number of people standing around the tapri than in a CCD or a McDs. I really wouldnt be surprised to see those tapris listed in NSE (Ramesh Tea stall (RMTS ^ 230.34)). Anyway, I digress. At any point of time during office hours you can find atleast 10-15 people standing around the table, smoking. Though this is a sad plight, there is nothing that can be done (or should be done) to stop these people from smoking their lungs away. Why? We'll come to that later in some other post.

If the government really intended to reduce tobacco consumption in India, then it could have simply banned all tobacco products the way its with drugs like cocaine. But yes, it wouldnt do that. There are around 120 million smokers in India and is home to 12% of the world’s smokers. As of 2006 India earned Rs 1,362 crore as foreign exchange and Rs 7,200 crore as excise revenue through tobacco. Exports have risen by about 67 per cent in rupee terms to Rs 3,383 crore in 2008-09. The tobacco industry provides employment to 4.5 million people. Why would the govt ban it completely? But then why doesnt the govt do the following too?:

1. Increase tobacco taxation - Studies suggest that Raising cigarette taxes to Rs 3691 from existing Rs 659 per 1000 sticks would increase tax revenues by over Rs 146 billion and prevent 3.4 million deaths in current and future cigarette smokers. Raising bidi taxes to Rs 98 per 1000 sticks would raise over Rs 36.9 billion in tax revenues and prevent 15.5 million deaths in current and future bidi smokers. When I told my colleague about this, he said he wouldnt stop smoking even if the price increased but he would start working harder to earn more money to be able to afford the dearer cigarettes. Calculations show that even very substantial cigarette tax increases will still reduce consumption and increase tax revenues. This is in part because the proportionate reduction in demand does not match the proportionate size of the tax increase, since addicted consumers respond relatively slowly to price rises. This is good in both ways because people who quit, quit for the better and those who dont, just end up working harder in turn generating more GDP for our country. The only concern would be of the low income groups (who form the highest percentage in tobacco consumers) resorting to illegal ways like robbery or smuggling to get their share of dope.

2. Lift FDI Ban on Cigarette manufacturing - “Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes” have been put under the list of sectors where FDI is prohibited. Agreed this is a good measure to curtail smoking but why let go of the benefits of FDI (hence more revenue and more employment) in our country when you can limit the cigarettes manufactured by them to be sold only outside India. Not worrying about the health of others outside India is not morally right but we have bigger issues here.

3. Improve the conditions of rural workers - It has been found that the tobacco industry exploits its workers by not paying them minimum wages and employing children among its labour force. Bidi companies pay very low wages, as low as Rs.23 per 1,000 bidis rolled, in certain parts of India. Hence, this work is mostly done by women and children. The govt should step in and ban them from hiring children and divert the work to other rural villages and ensure they get more wages and improve their standard of living.

4. Take advantage of Tapris outside companies - Considering there are 120 million smokers in India and considering each smoke atleast 5 in a day and knowing for a fact that the tapri guys earn more than the professionals who come to smoke, we can allow one "tapri" to be legally setup by an unemployed person (as the investment required for setting it up is negligible) for every 120 people who smoke, we can create some source of livelihood for around 1 million people.

Sorry for acting so MBA-ish. Now that I have gotten into a B-school, feels good to act as if I am trying to make this world a better place to live in. :)