If increasing taxes on cigarettes is a public health measure to discourage smoking, then cutting bidi taxes to “protect” rural workers ignores the long-term cost to their lives. While most tobacco products are taxed at the highest bracket of Goods and Services Tax (GST) at 40%, bidis are taxed at only 18%, making them much cheaper than cigarettes and other forms of tobacco. The latest tax rates became effective this month.
Many government reports confirm that bidis are no less dangerous than cigarettes. In fact, studies cited in the reports indicate that the incidence of cancer is often higher among bidi smokers. Because cancer treatment costs three times as much as treatment for other diseases – even in public hospitals – capping taxes on bidis is a short-sighted subsidy.
The crucial distinction between bidi and cigarette consumption lies in demographics. The data suggests that there is a significant overlap between the workforce that wraps bidis and the core consumer base. While cigarette smokers lack a specific demographic profile, bidi consumption is limited to a more specific socioeconomic segment.
Data from the National Family Health Survey show that bidi smoking is more pronounced among older rural men from the poorest 20% of the population. So, keeping bidi taxes low may enable workers to save a few coins in their youth, only for these savings to be eroded by the high cost of health care in later years.
Tobacco use in India is largely concentrated among men. As of 2019-2021, about 13.3% of men smoked cigarettes, while 7.8% smoked bidis. Among women, smoking rates were about 0.1% or less. Bidi smoking was almost as prevalent in rural areas (8.3%) than urban areas (4.5%) among men.
While bidi smokers represent a relatively smaller proportion of the population than cigarette smokers, their frequency of consumption is much higher. The data reveals a stark gap: more than 80% of bidi smokers consume more than five sticks a day, while more than 70% of cigarette smokers consume less than five sticks. So, the important distinction is that bidi policy should not just look at the number of people who smoke; We should look at how much they actually smoke.
The division appears more pronounced across education and age. While cigarette smoking is relatively evenly distributed across all levels of education, bidi use is highly concentrated among those with the lowest levels of education. While younger and middle-aged men largely prefer cigarettes, bidi consumption is disproportionately prevalent among older people.
Also, although there is almost no class difference in cigarette smoking, bidi use shows little shift. More than 15% of the population of Scheduled Castes (SC) and Scheduled Tribes (ST) smoke cigarettes, which is similar to the share among the general category. However, for bidis, the numbers are slightly skewed: 10.6% of SC residents smoke it, compared to 7% in the general category.
The economic disparity in tobacco choice is stark: while wealth has little influence on cigarette consumption, it is a major driver of bidi use. Among the poorest households in India, the proportion of bidi and cigarette smokers is almost identical (about 14-15%). However, as household wealth increases, bidi consumption decreases. In the richest households, while cigarette use remains constant at 11.5%, bidi consumption falls to just 2.1%.
The India Tobacco Control Report 2022 notes that bidi smoking poses serious health risks, in many cases greater than those of cigarettes. The report highlights clear differences in respiratory risks: bidi smokers are 2.87 times more likely to develop asthma, compared to 1.82 times for cigarette smokers.
Cancer risks show a similar pattern. A cohort study in Mumbai found that bidi smokers face a higher risk of all types of cancer than cigarette smokers, with a particularly high risk of lung and laryngeal cancer. The death rate from TB is even more severe, with bidi smokers facing a 2.6 times risk of death. “The poor who are the main consumers of bidis end up spending more on healthcare,” said Riju John, a health economist. “This will only increase the existing inequality between the poor and the rich.”
The Global Adult Tobacco Survey 2016-17 (GATS-2) shows that Indians’ average monthly expenditure on tobacco rose for both cigarette and bidi users, but for very different reasons. Daily smokers spent about INR 1,192 per month on cigarettes, up from INR 668 in 2009-10 (GATS-1), and spent INR 284 per month on bidis, up from INR 156, after adjusting for inflation.
For cigarettes, this increase was largely driven by prices, the survey said. The number of cigarettes smoked daily did not rise significantly between levels I and II of the General Agreement on Trade in Services, suggesting that higher spending reflects higher taxes and prices, not higher consumption. On the other hand, the number of bidis smoked daily increased significantly between the two surveys, leading to higher overall expenditure. This suggests that tax policy has been effective in containing cigarette consumption, but not bidi use.
John said that specific excise is a better form of taxation in regulating consumption. “If the tax is imposed on the basis of quantity consumed only, we pay the same tax whether the bidi is sold at a lower price or at a higher price by the manufacturer. This directly discourages consumption,” he said.
Graph data were obtained from the National Family Health Survey-5, the Global Adult Tobacco Survey, India Round 2 (2016-17) and the India Tobacco Control Report (2022).
Note: Cancer risk estimates are based on Pednekar (2011, Mumbai) and Jayalekshmi (2008, Kerala), as reported in the India Tobacco Control 2022 report.
