Why a government is required? One answer can be like this, it is required to look after public interest and safeguard and utilize national resources for the citizen’s interest. Relationships between it and public defined. The concept of Government is very old. When human beings started living in groups, cultivating in groups, they required a leader to coordinate individuals in the groups. Thus,  it has been evolved in course of time. In a democracy, citizens elect their representatives to form a Government to rule them keeping in mind the interest of the citizens, those who have elected them. Relationships with Government and people thus defined.

To look after public interest Government requires money and Taxing citizen is one way of earning. Another way, inter alia, is disinvestment. The decision of disinvestment is always a political hot potato, such a decision taken by the ruling party is always criticized by the opposition. It’s the rule of democracy.

But see the surprising contradiction. The government taxed at its highest rate on cigarettes. The government wants to control cigarette smoking to safeguard its citizens from possible health issues. Higher tax will make cigarettes costlier and thus remain out of reach of mass, is the theory. Also, following WHO directives Government brought Act (The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply, and Distribution) Act, 2003 (COTPA) and rule (The Cigarettes and other Tobacco Products (Packaging and Labelling) Rules, 2008 vide GSR 458 (E) dated 21st July 2020) to protect Indian citizen from health hazard due to Smoking Cigarettes, Bidi, etc. Government action is (‘in the public interest to do so…’) praiseworthy for its apparent good intent.

Video Credit: Bruit India

But, if you find that the Government itself is producing cigarettes, what you will think? Yes, that is happening. Happening for a long period and by the successive regimes, UPA and NDA. How many of us know that Government undertakings (LIC & UTI) hold 24.15% of the ordinary share of ITC Ltd. This is evident from its REPORT AND ACCOUNTS 2021  published by ITC Ltd.(page-219), the giant Cigarette Manufacturer of India. The question is why Government is not disinvesting ITC’s holdings before anything else. That can easily add to the undertaking’s financial health.

On one hand, the government invested to produce ‘Sin Products’ like Cigarettes, and the same government wants on another hand to control sales of tobacco products for the public interest. Hypocrisy…

On 2nd August 2021, in Rajya Sabha, Finance Minister, Nirmala Sitaraman announced that the average revenue collection from Tobacco Products sales by Central Govt was 53,750 Crores.  A huge revenue.

As we all know ITC Ltd. is the biggest manufacturer of Tobacco Products in India. ITC Ltd. has the largest share of the Indian market, about 84.27%.

So, their contribution towards Government’s revenue collection from the sector can be anything between 40,000 to 45,000 crores.  Is it the clue? Do not know. But whatever it may be this should not happen. Oppositions are also silent in this issue. But the issue deserves a national debate.

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