World No Tobacco Day: Tobacco Gains Go Up In Smoke

When it comes to India’s tobacco statistics, recent trends are nothing short of worrying. As per Statista, India — the second largest producer and exporter of tobacco in the world — is generating a revenue of USD 12,730 million in 2023 and is expected to touch 15,310 million by 2026. One might think these figures are indicative of growth. However, a sound and sustainable economy is not just about consumers maximizing their own utility; producers making good sales and market revenues soaring. WHO reports how tobacco use is one of the major causes of deaths and diseases in India and accounts for nearly 1.35 million deaths every year. Should we be happy to sell more of what kills?

Economists have long wondered what makes a rational consumer choose substances that have potential for abuse. Back in the day, addiction was considered an antithesis of rationality. An addict was simply touted as a puppet of the past who, very conveniently, was oblivious to his future. Sometime later though, the smoker (or chewer) came to be seen as a well-informed consumer whose indulgence was backed by his perceived benefits outweighing his perceived costs (key word here being perceived). Perhaps, what is closer to reality, as recent thinkers ponder, is a blend of both.

For if smokers and tobacco consumers were complete rationals, they don’t really require separate awareness about the death trap they are creating for themselves; and should they be complete addicts, awareness alone won’t make them quit!

But does it really matter whether a tobacco user fits the rational addiction model or is a subject of irrationality? After all, all that he is weighing (or not) is his individual gain(s)? Maybe he is aware (and nonchalant) of the individual costs accruing to himself from tobacco; maybe not. But is he aware of the costs trickling down to generations, the externality being inflicted on the society and the constraints being imposed on the economy as a whole? Economic progress has since long stopped being synonymous with individual progress, and it’s safe to say that tobacco consumers are not thinking beyond themselves.

The world today is at the cusp of a transition that screams for a welfarist approach, global solidarity and intergenerational fairness like never before. You are not simply chewing your own tobacco anymore. Some might argue that the sector generates employment, sales, export earnings and tax revenue but the question is: At what cost?

Let’s draw some statistics. According to a 2021 study by the World Health Organization, economic costs attributable to diseases from tobacco in India amounted to USD 27.5 billion in the year 2017-18. Studies also show that in countries with public healthcare facilities tobacco consumption goes beyond a private health cost. It spills over to a social cost and a transfer cost with expenses of treating tobacco-related diseases being borne by upright taxpayers and non-tobacco users.

Similarly, investing in the production or consumption of non-merit goods implies less is available for merit goods, food and other essential nutrition, in particular; creating a downward spiral of malnutrition, hunger and soaring health costs for the masses.

What’s more, incentivising the industry with direct subsidies or the more discreet duty drawback schemes of countries like India might fetch forex now, but any sustainable growth model requires resilient exports. And with the international community moving towards global value chains with net-zero emissions, the tobacco industry with annual emissions close to that of 3 million transatlantic flights shall struggle to find space in the foreseeable future.

As for the sector being a massive recruiter, the Indian tobacco industry indeed engages 36 million people (both farmers and non-farmers). But this also translates to millions of Indians being susceptible to nicotine absorption, GTS poisoning and second-hand smoke.

As per Global Health 2022 reports, exposure to secondhand smoke alone kills 1.2 million Indians every year. More importantly, a clamp-down on the industry need not necessarily mean loss of jobs, if there is a policy design at play for gradual and effective crop substitution and/or re-allocation of labor to more sustainable, resilient, sophisticated and futuristic sectors.

All in all, the ‘now gains’ from the sector are momentary. And contrary to the beliefs of a tobacco user, choosing short-term gratification over a long-run of robustness is not something economies and societies can afford anymore. This ‘No Tobacco Day’, let’s chew on that. 

(Dr. Sampriti Das, Assistant Professor (Economics), GITAM School of Humanities and Social Sciences, GITAM (Deemed to be) University.)