An autonomous research institute under the Ministry of Finance


Economics of Tobacco and Tobacco Taxation in India

Publication date

Jan, 2010


Report submitted to the Public Health Foundation and International Tobacco Health Research Network


M. Govinda Rao, R. Kavita Rao, Prabhat Jha


The objective of this project was to investigate various aspects of tobacco products such as its consumption, effect on health, optimal level of taxation to curb consumption of these harmful products while raising revenue out of these products.

This study at NIPFP discusses various taxes that are imposed on different tobacco products. While analysing the effect of taxation on the consumption of tobacco, the report reflects the affordability index and trend in relative prices of various tobacco products over the years. The study also emphasises the issue of progressivity of the tax structure of tobacco products. It is also clear from the analysis that the tobacco tax structure is somewhat regressive in nature.

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