Economic contributions of the bidi manufacturing industry in India
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1
Public Health Foundation of India, India
2
World Health Organisation - India, India
Publication date: 2018-03-01
Tob. Induc. Dis. 2018;16(Suppl 1):A692
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ABSTRACT
Background:
Bidi is the most popular tobacco smoking product in India
and commands an overwhelming market share of 85%. Perceptions of potential
economic loss is a major impediment against any bidi control measure. Previous
research has focussed on unregistered bidi sector and at a single time point. We estimated
the economic contribution made by the entire bidi industry at three time
points.
Methods:
We conducted secondary analyses
from data of nationally representative cross-sectional surveys conducted in
2000-01; 2005-06; 2010-11 : 1) Annual Survey of Industries 2) National Sample
Survey (NSS) and 3) NSS Employment and Unemployment Survey. The total gross
value added (GVA) has been adjusted for inflation by Wholesale Price Index
using 2004-2005 base price.
Results:
We found that there was a decline in overall bidi industry
GVA in 2005-2006 from 2000-2001 by ₹
13.7 billion but it has grown back to 2000-2001 levels of ₹ 48.2 billion in 2010-2011(0.65% of the GVA
contributed by the manufacturing sector). Ratio of GVA contributed by
unregistered to registered bidi firms has decreased by half in between
2005-2006 and 2010-11, although the proportion of employment provided by the
unregistered firm remained constant at 89-81% during this period. There has
been a gradually shift to smaller-size units in between 2000-2001 and
2010-2011.
Conclusions:
The bidi industry does not make any significant economic
contribution to the Indian economy. Employees in unregistered sector receive no
welfare benefits. The shift towards smaller-size units might be reflective of
contractualisation to enjoy excise tax exemption which was prevalent during the
pre-Goods and Services Tax (GST) era. Better regulation of the sector by
mandatory registration of bidi firms together with high GST taxes without
exemption will lead to improved revenue, improvement of work conditions and act
as a tobacco control measure too as consumption is price elastic in nature.