Trends indicate that smokers hit by the rising prices have shifted to so called down market options like bidis and Gutkas, as heavy tax slabs have failed to kill their urge to smoke resulting in an increase in total tobacco consumption.

"High rates of taxation on cigarettes are forcing consumers to shift to cheaper and alternate forms of tobacco consumption. As a result, overall tobacco consumption is increasing, as the price of other tobacco products is very low," says Udayan Lal, Director, Tobacco Institute of India (TII).

According to a report by the health ministry, India is home to 100 million bidi smokers and around 8 lakh people in the country die due to tobacco consumption annually with 6 lakh deaths caused by bidis alone.

"It's not that the government is unaware of the facts about the growing bidi industry. The highly labour intensive nature of the industry, which provides large-scale employment, gives it a powerful voice and that could be one of the reasons why tax rates are so low," says Lal.

"And also there is a highly decentralized system on manufacturing and distribution of bidis. There are thousands of bidis factories and no reliable data on their production or consumption," Lal adds.

Statistics by the ministry reveal that about 15 per cent of tobacco consumption in India is in the form of cigarettes while 53 per cent is smoked as bidis.

"Unlike the rest of the world, where, on an average, cigarettes account for as much as 90 per cent of the total tobacco consumed, in India cigarettes represent only 15 per cent of total tobacco consumption. The balance 85 per cent of tobacco consumption is in the form of traditional tobacco products like bidis, chewing "khaini", gutka, etc," says Lal.

Cigarettes contribute 85 per cent to the total excise revenues collected from the tobacco industry, amounting to Rs 8,500 crore, according to Tobacco Institute of India (TII).

Pointing out that the bidi consumption is very high in northern India, particularly in Rajasthan, Haryana, Punjab and UP, with the ratio of bidis to cigarettes sometimes being as high as 24:1, he says, "Bidis are more harmful than cigarettes because they go out more often than cigarettes and are filled with small amounts of low-grade tobacco."

Studies have also shown India's 4.4 million full-time bidi rollers the majority of whom are rural women and children who roll bidis by hand at home and are paid low wages were more likely to contract anaemia, asthma and TB than other non-smokers not involved in bidi production.

"It is an industry that is growing. More than 800 billion bidis are sold in India each year compared with 100 billion cigarettes sold annually. Easily available and comparatively cheap, the bidi is smoked predominantly by people on lower incomes," says Lal.

Adding that it is the high and discriminatory rates of taxation on cigarettes that are dictating the consumption pattern of tobacco products, Lal says, "Tax on bidis are currently just one-twelfth of the tax levied on non-filter micro cigarettes (purchased by the poor) and just 2 per cent of the tax on more expensive standard filters cigarettes. As a result bidis represent less than 6 per cent of India's total tobacco excise revenues."