Government Bans E-Cigarettes But Not Tobacco, Who Stands To Gain?

The Logical Indian Crew India

September 20th, 2019 / 2:13 PM

E-Cigarette Ban Nirmala Sitharaman

Image Credits: Financial Express

The Centre on Wednesday issued an ordinance to ban manufacture and sales of e-cigarettes and other electronic nicotine devices across the country. The decision was announced by Finance Minister Nirmala Sitharaman following a Cabinet meeting chaired by PM Modi.

It has come to the government’s notice that many youngsters are taking up smoking who would otherwise refrain themselves from smoking tobacco cigarettes.

Government Cites US Data

The government’s observations are not incorrect considering the fact that the sale of Electronic Nicotine Delivery Systems (ENDS) have gone up. While addressing the media Sitharaman cited a US report that there has been a 77 per cent rise in students’ consumption of e-cigarettes. She also pointed out that between 2011 and 2016 in the United States the e-cigarette consumption among students witnessed a 900% increase.

One of the reasons the popularity among the youth is that e-cigarettes are considered to be less harmful than conventional cigarettes. 

But the government thinks otherwise. “We don’t agree that ENDS is a harm reduction device. Secondly, the Global Adult Tobacco Survey (GATS) data shows there’s a decline in the number of smokers, with only about 10% of the population smoking cigarettes in India. Actually the young population is being targeted as customers for ENDS,” said Preeti Sudan, Union health secretary.

In 2019 the Indian Council of Medical Research (ICMR) paper on ENDS had suggested that e-cigarettes and similar technologies that encourage tobacco are hazardous for an active as well as the passive user. 

The ICMR had advocated the complete prohibition of e-cigarettes.

But the Government’s justification of E-cigarettes being harmful has more to it. The government had been facing hurdles in the form of court cases against the move since ENDS were not declared as ‘drugs’ in the country’s drug regulations.

Cigarette Stocks Skyrocket

As soon as Sitharaman announced the Cabinet’s decision, the stocks of cigarette manufacturing companies skyrocketed. The government recorded a notional gain of around Rs 1,000 crore during Wednesday’s trading hours by the virtue of their shareholding in Cigarette manufacturing companies.

The top gainers were  Godfrey Phillips India, ITC and VST industries. 

The government has 28.64 per cent holdings in ITC Ltd. Its share rose by 1.03 per cent Rs 2.45 apiece, to close at Rs 239.60 apiece on Wednesday. 

The government through Life Insurance Corporation, holds 16.32 per cent of shares, while it owns 7.96 per cent of shares through Specified Undertaking of Unit Trust of India. 

Other government entities such as General Insurance, New India Insurance, Oriental Insurance have a total of 4.36 per cent. The total gains of all the above entities are said to be Rs 859 crore, reported the Indian Express.

Is Cigarette Smoking Less Harmful?

The government’s move to ban one form of nicotine and not the other raises a question as to is the traditional nicotine stick less harmful than its electronic version.

The answer is no. According to the Indian Express report which quoted the health ministry source said that the total nicotine consumption seemed to remain ‘unchanged’ among the ENDS consumers and cigarette consumers.

Nicotine in any form is harmful and should not be consumed. It doesn’t matter whether one chews its, inhales it or smokes it.

But the government banning one and not the other raises many questions, especially with the stock rise. 

Meanwhile, social media users had a field day after the announcement. 

Also Read: Acche Din For Railway Employees! Government Announces 78-Day Wage Bonus


Written by : Shubhendu Deshmukh

Edited by : Shweta Kothari

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