Budget 2017: Government mulls tax on junk food and sugary drinks

A proposal has been made by a group of secretaries on health, sanitation and urban development to tax junk foodand sugar-sweetened beverages in the upcoming Budget 2017 , reported Times of India.

The 11-member group also suggested that the money collected with tax should go to the health services.

“In our presentation to the PM, we suggested higher taxes on junk food and sugary beverages because consumption of such products is growing fast and fuelling several lifestyle diseases like obesity, diabetes and heart disorders. We have also suggested that revenue earned from such tax be invested in health schemes,” said a member of the group.

Such a proposal has been in the pipeline for aver a year now. Also, the government did form an inter-ministerial committee to discuss the proposal to impose strong measures like higher taxes and restrictions on endorsements and advertisements of such products on TV.

The FSSAI (Food Safety and Standards Authority of India) is already working on mechanisms to regulate consumption of junk food. This is crucial given the growing disease burden in India,” health secretary C K Mishra said, adding the ministry was in support of the proposal made by the group of secretaries.

According to the World Health Organisation, obesity in India has risen one-and-a-half times in the last quarter-century. Heart diseases and diabetes together result in 28 per cent of all deaths.

In July 2014, the Indian government increased the tax on sugar-sweetened beverages by 5 per cent, hoping to curb consumption.

Sales of aerated beverages increased 10 per cent in 2014, according to the Indian Beverage Association. This was before the tax was increased. However, sales of aerated beverages declined 10 per cent between April and September 2015.

A 330 ml of serving contains 36 grams of sugar, which is nine tablespoon. A teaspoon of sugar has about 16 calories, which makes it to 144 calories in one serving.

Over the past two years, the soft drink industry has seen a value growth of 11 per cent compound annual growth rate (CAGR) and a volume growth of 5 per cent CAGR. In total, 1.25 billion people in the country drink 5.9 billion litres of soft drinks in a year, said a report in Nielsen.

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