Smoking is a universally accepted evil. Few people would disagree with this statement and even heavy smokers claim to be aware of the perils of smoking and yet continue with this life-injurious habit without any change. The bold step taken by the Government of India to impose heavy fines on smoking in public places is a welcome decision in the light of the ongoing global warming and the increasing connection between smoking and tobacco-related deaths. The economic value of such a decision also has to be discussed to understand the onus shown by the Indian Government.
Since the per capita income of India is less than $1000 per year, the decision has considerable economic importance apart from its sociological stance of health campaigning. Economically, India is a poor country with several schemes for development and improvisation still waiting in the pipeline. One of the world’s poorest nations, India is also the second most populated country in the world right behind China. The devising of the new policy to effectively fine public smoking is one of the most surprising passed taken by the Indian Government which will have considerable economic impact in the long term.
It is widely refuted by smokers that any sort of rule or ban does not persuade them from smoking lesser or giving up tobacco smoking. However, observations suggest otherwise and in reality rules and bans have actually been successful in reducing the number of cigarettes smoked by a single person to such an extent that its reduction has been felt in the economy. (Fox, 2008) The drop in GDP and national consumption was felt strongly in the United States when public smoking bans were effectively applied to two major states – New York and California.
This was due to the reason that the contribution towards the GNP and GDP of tobacco products was significant and any change in this segment was reflected visibly in the economy. It is therefore a commendable act that India has understood the far-reaching implications of such an action and has decided to enforce this law. In a country where at least 250 million people consume tobacco products, at alarming rates, of which mostly are men, the decision to ban smoking in public places will reduce the number of cigarettes consumed in public places.
This will eventually lead to a substantially low number of cigarettes smoked each year in India; which will translate into sizeable shrinkage of the GDP. Perhaps tobacco can be metaphorically likened to be the fuel for the Indian economy. However, the reduction in the GDP, or rather the expected reduction in the GDP will be other cost savings. The amounts spent by the Health sectors and other NGOs in reducing pollution and combating global warming will decrease significantly.
Thus, there is a trade-off between the lost consumption in the GDP and the additional costs incurred for cleaning up the mess of smoking. The factors affecting the demand and supply of cigarettes will change with demand taking a leftward shift and there being a new equilibrium established at a lower price with a lower consumption of cigarettes. Normally, the demand for tobacco products is quite inelastic with price increases having only marginal reductions in the demand function.
However, with the introduction of the ban, the aggregate demand will decrease considerably towards the left and result in lower price equilibrium. In conclusion, the article describes a very important move that could change the Asian picture for global warming since India is the leading nation in air pollution.
Works Cited
Fox, M. H. (n. d. ). The Economic Impact of Smoking Bans. Retrieved October 22, 2008, from Drug Awareness: http://www. emporiansfordrugawareness. com/cleanair/documents/2005_Economic_Impact_of_Indoor_Smoking_in_Lawrence. pdf