From: Financial Chronicle (India)
By PC Jha
The wise minister of a Mauryan king had advised that since all undertakings depend on finance, the king should pay foremost attention to the treasury. The efficacy of this advice has not changed. Even today, governments make sincere efforts to collect the required tax revenue from people. Often, the need and anxiety to collect more revenue makes it difficult to maintain the right balance among different considerations which, at times, are mutually conflicting.
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The illegal activities of counterfeiting and smuggling are flooding the market with substandard fake goods which are produced without following quality norms at unhygienic places, and are sold without issuing bills, thus contributing towards increase in unaccounted money. The government gets less revenue, and the consumers whom the government wishes to protect, get exposed to much greater health risks instead. No one would deny that consumption of good quality products, even in terms of items like alcohol and tobacco, is much less harmful than their counterfeited substandard substitutes. Among different tobacco products, cigarette is an item which is manufactured at comparatively cleaner places ensuring the good quality of tobacco and other ingredients. However, under the burden of high taxes, its share in total consumption of all tobacco products has reduced substantially over the years from 23 per cent in 1971-72 to 11.9 per cent in 2013-14, while the consumption level of more harmful tobacco products including fake cigarettes has proportionately increased. According to credible reports, 20.8 billion cigarette sticks are smuggled into India every year, making it the fifth highest consumer of smuggled cigarettes in the world. Industry estimates further reveal that an estimated 60 million cigarette sticks are smuggled every month in Mumbai followed by 35 million sticks in Delhi and 20 million sticks per month in Pune, Bangalore and Hyderabad.
