Commentary

Find our newspaper columns, blogs, and other commentary pieces in this section. Our research focuses on Advanced Biology, High-Tech Geopolitics, Strategic Studies, Indo-Pacific Studies & Economic Policy

Anupam Manur 9/19/19 Anupam Manur 9/19/19

The Puzzling Ban of E-Cigarettes in India

The Indian government’s own disastrous experience with bans of various substances and services in the past should categorically advise it against such a move in the future. Yet, it is planning to go down the same route again with the case of “e-cigarettes” also known as Electronic Nicotine delivery systems (ENDS). A ban on ENDS, however well-intentioned, will put several former smokers at a greater risk of limiting their access to no-tar alternatives and will end up defeating the larger public health objectives.

In a landmark 200-page report titled “Nicotine without smoke: tobacco harm reduction”, the Royal College of Physicians in the UK concludes that e-cigarettes are not a gateway to smoking, nor do they result in the normalisation of smoking. They find that the available evidence indicates that “e-cigarettes are being used almost exclusively as safer alternatives to smoked tobacco, by confirmed smokers who are trying to reduce harm to themselves or others from smoking or to quit smoking completely”. Importantly, they further categorically find that the long-term harm caused by e-cigarettes is less than 5 percent compared to other tobacco products.

By allowing ENDS to operate in India legally, the government and regulatory bodies can have a lot more control over the product. This includes levying appropriate taxes, issuing public use guidelines, providing information about the product, enforcing a minimum age for sales, and individual product restrictions surrounding flavour choices and nicotine concentration in tobacco or e-cigarette products. In fact, regulators could go further to ensure product standardisation, labelling requirements to indicate the level of nicotine (something which is not in practice today for normal cigarettes), and technological developments in the field to further reduce the harm caused by the products.

Read the full article here

Anupam Manur 10/29/18 Anupam Manur 10/29/18

The addictive nature of bad policies

Apart from being ineffective, prohibition also has massive unintended consequences. Prohibition pushes the market underground and actually increases the crime rate, leads to a loss in state revenue, loss in employment and livelihoods, increases corruption, and ultimately harms the very people it seeks to protect.

Al Capone, the infamous prohibition-era US gangster, once remarked, “I am like any other man, all I do is supply a demand.” In Bihar, the smuggling supply chain has already been well established. Around 6.5 lakh raids have been conducted and 1.22 lakh people have been arrested. Altogether, 16.4 lakh litres of Indian-made foreign liquor and around 12.4 lakh litres of various types of country liquor have been seized so far since the law was enacted in 2016. The seizures and arrests reflect the prevalence of the problem. Some of the seized illicit liquor started disappearing from police stations as well.

Further, crime statistics also betray the ineffectiveness of the law. Total cognisable crimes rose 11% in April 2016 to December 2017 period compared to the same period before prohibition. Crimes related to other prohibited substances have increased as well.

There are also significant socioeconomic losses. At least 35,000 direct jobs have been lost as 21 alcohol manufacturing plants and 5,500 retail outlets have been shut down. Add to this the number of indirect jobs lost, because of forward and backward linkages, and the number becomes daunting. For instance, tourism in Bihar has taken a hit. The food and beverage sector revenue declined by around 30%. Room occupancy rates have drastically fallen and corporate conferences and events have almost completely stopped.

Finally, as expected, Bihar’s finances have taken a toll. The 2017-18 financial year saw an approximate loss of ₹5,500 crore because of lost revenue from excise and value-added tax (VAT). To compensate for this, the Bihar government has raised the VAT on 600 other items and has also resorted to higher state borrowing, which has pushed up the fiscal deficit. The loss in revenue from taxing alcohol has also impacted government expenditure. Expenditure across crucial sectors, such as education, pension, health, and energy was much lower than the budgeted figure. The political parties promising prohibition in Madhya Pradesh are also promising a farm loan waiver, another bad policy that is contagious. Funding a farm loan waiver, while losing out on the excise revenue, would derail state finances.