Survival of bidi industry at stake, urgent need for slashing tax: Stakeholders

Representatives of the bidi industry and labour organisations have called for an immediate reduction of tax on the indigenous smoke, contending that high taxes threatened the survival of the sector.

During a virtual round table organised by the All India Bidi Industry Federation, they also deliberated upon the need for alternative job opportunities for the workers engaged in production of bidi, small hand-rolled cigarettes made of tobacco wrapped in leaves.

"The bidi industry has been playing a big role in generating revenue and employment in some of the remotest regions of India. However, the existing exorbitant rate of 28 per cent GST due to beedis being deemed a demerit good, is having a major negative impact on the lives of the workers, especially women from rural and tribal areas," said Arjun Khanna, joint secretary of the federation.

"The government should also understand that continuing to tax the industry at this rate may put one of India's oldest indigenous industries at the risk of being wiped out. This will result in massive unemployment and socio-economic ramifications, which will push millions below the poverty line," he said.

The steep tax rate has led to a surge in manufacturing moving from the organised to the unorganised sector, the representatives said, adding, the GST Council had rationalised tax on handmade products to 5 per cent and that can be extended to the bidi industry as well.

The production of bidis in India provides employment to nearly one crore people. A majority of the workers are women who live in Naxalite areas, where no alternative job opportunities exist.

"This is why it is becoming critical to reduce the tax on bidi or else the industry will face the risk of being counter-productive to the government's 'Make in India' initiative. This is because it may lead to an infiltration and dependency on cheap Chinese cigarettes" added Dr Ashwani Mahajan, National Convenor, Swadeshi Jagran Manch.