GST impact: Increased cess on cigarettes hit tobacco industry

Rise in tax and cess on cigarettes under the recent GST structure has adversely affected the tobacco farming industry across India. ITC’s shares fell by 15.6 percent in the market, which is the lowest in the last 25 years. India is the world’s second largest producer of #tobacco with an estimated annual production of 800 million kgs. Tobacco occupies a meager 0.24% of the country’s total arable land area and is grown largely in semi-arid and rain-fed areas where the cultivation of alternative crops is economically unviable and hence turns up as a lifeline to a wide farmer base there. India is a signatory to World Health Organisation (WHOs) Framework Convention on Tobacco Control which seeks to protect the population from the devastating social, economic, health and environmental consequences. Alternative employment for the tobacco farmers is still a concept and unemployed population is yet to be benefitted by the government schemes and endeavors. In such a choking situation, the farmers would be hard hit until the government brings sufficient measure to deal with the results of its self-initiated schemes.