JUNK FOOD TO COST MORE WITH ‘FAT TAX’

If Prime Minister Narendra Modi gives his thumbs up to a recommendation made by a team of country’s top bureaucrats recently, a fat tax on junk food will become a reality. The additional revenue that the government will earn from levying the fat tax should be diverted to the health budget, a group of secretaries has recommended in its recent presentation.

CONSUMPTION OF FOOD HIGH IN ADDED SUGAR, SALT AND SATURATED FATS IS SEEN AS ONE OF THE MAJOR REASONS BEHIND THE INCREASE IN LIFESTYLE DISEASES

NEWDELHI: If Prime Minister Narendra Modi gives his thumbs up to a recommendation made by a team of country’s top bureaucrats recently, a fat tax on junk food will become a reality.

Concerned over spurt in lifestyle diseases such as diabetes and hypertension, fuelled by junk food, a group of secretaries constituted by the PM to give budget ideas on health, sanitation and urban development sectors have recommended “imposition of additional taxes on foods with added sugar, salt and saturated fats.”

The additional revenue that the government will earn from levying the fat tax should be diverted to the health budget, the group which among others also had health secretary CK Mishra and Indian Council of Medical Research (ICMR) DG Dr Soumya Swami nathan said in their presentation .“This will help increase the public spending on health which is just 1.16% of the GDP now,” said a senior government official. The group has also recommended increasing the public spending on health to 1.5% of GDP by 2019.

“Consumption of food high in added sugar, salt and saturated fats is seen as one of the major reasons behind the increase in lifestyle diseases. To discourage people from eating junk food, we have recommended imposition of an additional tax on such food items. But a final call will be taken by the Prime Minister,” said a secretary who was part of the group.

If approved, such food products will attract a higher rate of tax under the proposed Goods and Services Tax, an official added. However, if the proposal gets accepted, implementation will be a big challenge.

Last June, the Kerala government proposed imposition of 14.5% tax on food items such as pizza and burger served in branded restaurants.

Besides, the group of secretaries also recommended prioritizing health research. It recommended making ICMR nodal agency for coordination and harnessing all health research

Bureaucrats cited that there is an overlap of research done on health sector by different government institutions. “There is limited and scattered funding with 80% going towards payment of salaries and buildings,” said an official.