In God’s own country, a reformative measure was introduced for healthy and happy living. In the Indian context, the southern state of Kerala is known as God’s own country. It has been called thus thanks to a slogan projected and widely publicized by the state tourism department aimed at showcasing the state’s immense potential of tourism.For a healthy Kerala
Aimed at controlling obesity levels, policy makers in Kerala have hammered the point that a tax on unhealthy food and beverages could slow the rising rates of obesity
Kumkum Chadha
In Gods own country, a reformative measure was introduced for healthy and happy living. In the Indian context, the southern state of Kerala is known as Gods own country. It has been called thus thanks to a slogan projected and widely publicized by the state tourism department aimed at showcasing the states immense potential of tourism.
Kerala in any case is easily among the most beautiful states on the southern tip of India. It is also a major tourist destination in the country.
Gods own country is a phrase used by New Zealanders to describe their homeland. Some other countries, mainly Australia and some American regions also adopted it.
Kerala got it as part of an ad campaign. The gamble paid off and it did wonders to tourism in the state.
Currently, its policy makers have ushered in a happy but controversial measure that has clear divisions of approval and dissent. With one stroke Kerala outdid the other Indian states in its attempt to emerge as the healthiest in the country.
Early this week, the state government introduced what it explained as a fat tax on fast foods.
The state Finance Minister has announced a fat tax of 14.5 per cent on fast food including burgers, pizzas, pasta, doughnuts and sandwiches sold at quick delivery chains and other branded restaurants.
This is a first of its kind move in India. It is likely to impact chains like McDonalds and Dominos.
Simply put the fat tax would raise the cost of a medium chicken pizza from rupees 350 to 400.
The tax is part of Left front governments initiative to shore up revenues of a cash strapped state. The measure is expected to bring in merely rupees 10 crore annually.
During the last regime headed by the UDF, revenues had gone down by four percent in five years. The UDF or the United Democratic Front was a Congress led alliance of political parties in Kerala. In the recent elections, the UDF lost power. While the then ruling party was charged with bad fiscal management for the revenue downslide, it was also rapped for very low tax collection in the last five years.
However, one cannot ignore that the crisis in the agricultural sector was a major factor in things being the way they are. Add to this the fact that layoffs in Gulf countries stifled the people and adversely affected their purchasing power. A large number of people from Kerala work in Gulf countries. Thanks to the oil revolution, the Gulf came to be seen as a land of plenty that beckoned cheap labour. The Keralities headed just there.
Aimed at controlling obesity levels, policy makers in Kerala flag several studies and surveys to hammer the point that a tax on unhealthy food and beverages could slow the rising rates of obesity in the same way as taxing cigarettes leads to decrease in the number of smokers.
In a bid to placate food-chains, the state government also said that fast food restaurants could pass on the burden of the new tax to consumers if they wished. Either way it would hurt sales given that retailers are already losing out to new options in food that are threatening the existence of fast food chains. There are arguments and counter-arguments on the fat tax given that fast food in Kerala is not so popular. There are only a handful of fast food restaurants throughout the state, even though its ranking in child obesity is very alarming.
There is a view that Kerala could take a lead and have a demonstration effect on other states which could replicate and gain from the Kerala experience: a copy cat effect so to say. There are ifs and buts to the move. In some sections the move has been hailed while in others it is a thumbs down.
The advantages are that the fat tax would necessarily encourage people to choose healthier foods which in turn would mean improved health and lowering the risk of disease. That apart, it would encourage a supply of foods that are low in fat and sugar.
On the flip side, it is being argued that the move is a knee jerk reaction. it is being argued that it is tough to know which food deserve a fat tax and which does not. Fast food apart, many Indian snacks have more calories than a burger or a pizza. A samosa, a kachori and even the oil dripping Kolkatta loochi for instance are laden with fat. Leaving out sugar-sweetened beverages and white sugar, for instance, is also being frowned upon.
Interestingly, the BJP led government in the Centre was toying with the idea of imposing a sin tax on sugary carbonated drinks. The move was deferred owing to the possibility of some of the worlds biggest beverage companies closing shop and moving out. Coca Cola and Pepsi are some of the companies producing such drinks.
If Kerala is hastening the death of pizza and burgers in Gods own country, Bihar axed the samosa a few months ago by announcing a similar tax on it. Except instead of calling it a fat tax like Kerala, it dubbed it as a luxury tax. This northern state of India has also taxed sweets that cost more than Rs500 per kg. One of the reasons for the move was Bihars dip in the states revenues from the new ban on alcohol sale.
High rates of taxation, it is argued, usually lead to a change in consumption patterns.
Yet the Denmark example is being cited to drive home the point that the experiment had failed there. Denmark had levied a fat tax for products with more than 2.3 per cent saturated fat but it was scrapped after a year. Denmark introduced a fat tax in 2011 but repealed it by 2013 when it found consumers shopping across the border for high fat goods. It has been more successfully employed in countries like Mexico, Hungary and some 33 states in the US.
Hungary taxes foods high in sugar, salt and fat. Mexico taxes sugary drinks, breakfast cereals and sweets. In the US, battles are being fought over taxes on sugary drinks. Philadelphia became the first major city in the US to introduce a soda tax.
The results from Mexico are encouraging as they have shown a fall in the consumption of sugary carbonated drinks, and five per cent in calorie-rich junk food since its introduction some two years ago. Mexico also provide proof that levying additional taxes on non-essential food items that are rich in fat or calories can effectively alter food choices. The country witnessed a 5.1 per cent dip in consumption levels in foodstuff that had more than 275 kcal/100 g energy density following the imposition of an 8 per cent levy in 2014. Experts warn against throwing caution to the winds and burning ones fingers like Denmark. As against this they suggest mid course corrections to battle obesity and ensure that the fat tax wins rather than loses.
The core issue is the way one sees the tax: a glass half full or half empty. If one sees the tax as one that is health centric and aimed at public good, then there are many takers for it but if one sees it as a governments revenue mopping exercise then it defeats the do-good factor and merely remains a revenue model.
Amid the raging debate is the key question: Is fat tax an idea whose time has come or is it one that will be battered to death? And more importantly will Gods own country go up the Mexico way or like Denmark beat a hasty retreat?
The writer is a senior Indian journalist, political commentator and columnist of The Independent. She can be reached at: ([email protected])
