Economic contributions of the bidi manufacturing industry in India
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Public Health Foundation of India, India
World Health Organisation - India, India
Publication date: 2018-03-01
Tob. Induc. Dis. 2018;16(Suppl 1):A692
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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.

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.

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.

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.