India’s latest Household Consumption Expenditure Survey (HCES) has surfaced a deeply unsettling contradiction. At a time when the state is expanding publicly funded healthcare and social protection, tobacco consumption is rising sharply—especially among poorer households. This collision between addictive consumption and welfare expansion carries serious implications for public health, fiscal sustainability, and social policy.
What the HCES data reveals about tobacco use
The Household Consumption Expenditure Survey 2023-24 shows a sharp rise in tobacco spending over the past decade. Adjusted for inflation, per capita expenditure on tobacco increased by 58 per cent in rural India and 77 per cent in urban areas between 2011-12 and 2023-24.
While tobacco accounts for about 1.5 per cent of monthly per capita consumption expenditure (MPCE) in rural areas and 1 per cent in urban India—figures that may appear modest—the real concern lies in its widening reach. Tobacco-consuming households have expanded dramatically across both geographies, indicating that use is becoming socially normalised rather than marginal.
The rapid spread across rural and urban households
In rural India, tobacco-consuming households rose from 9.9 crore to 13.3 crore over just a decade, now covering nearly 69 per cent of all rural households. Urban India witnessed an even faster rise, with such households increasing by nearly 59 per cent to reach almost 46 per cent of the total.
Tobacco is no longer confined to specific occupations, regions, or social groups. Its spread across both rural and urban India suggests a mainstreaming of consumption patterns that public health policy has failed to arrest.
Gutkha’s rise and changing consumption patterns
The composition of tobacco use has shifted sharply. In rural areas, the surge is driven primarily by gutkha and leaf tobacco. The share of rural households consuming gutkha has jumped nearly sixfold—from just over 5 per cent to more than 30 per cent. Gutkha alone now accounts for 41 per cent of all rural tobacco expenditure.
Urban India, often presumed to be more health-aware, shows a worrying convergence. Cigarettes remain the most consumed tobacco product in cities, but gutkha use has spread rapidly, now present in nearly 17 per cent of urban households.
Regional concentration and social normalisation
Geography sharpens the crisis. Gutkha consumption is heavily concentrated in India’s central belt—Madhya Pradesh, Uttar Pradesh, Bihar, Chhattisgarh and Rajasthan—where prevalence far exceeds the national average. In rural Madhya Pradesh, over 60 per cent of households consume gutkha, while Uttar Pradesh has crossed the 50 per cent mark.
More troubling is the urban mirror effect. Nearly half of urban households in Madhya Pradesh consume gutkha, and several other states report rates well above one-third. Parts of Northeast India also show above-average prevalence. Even southern states, though relatively better placed, report significant penetration, indicating that no region is immune.
The class dimension: tobacco and inequality
The survey underscores a stark class gradient. Tobacco consumption in India is increasingly concentrated among poorer households. In rural areas, more than 70 per cent of households in the bottom 40 per cent of the income distribution consume tobacco; in states like UP, MP and Bihar, this exceeds 85 per cent.
Poor households not only consume tobacco more widely but also spend a higher share of their limited MPCE on it. In urban India, the inequality is sharper: over half of the bottom 40 per cent households consume tobacco, compared to less than 37 per cent among the richest 20 per cent. Among the urban poor, gutkha use remains disproportionately high.
Health consequences and the NCD burden
The public health implications are severe. The Ministry of Health and Family Welfare estimates that tobacco use causes nearly 13 lakh deaths annually in India. Tobacco is a leading risk factor for non-communicable diseases such as cancer, cardiovascular ailments, respiratory illness and hypertension.
According to the World Health Organization, non-communicable diseases now account for 63 per cent of all deaths in India, placing sustained pressure on the healthcare system.
When welfare expansion meets moral hazard
The current moment is particularly fraught because rising tobacco use coincides with expanding public healthcare coverage. Ayushman Bharat was designed to shield vulnerable households from catastrophic health expenditure. With over 42 crore cards issued and nearly 12 crore families covered, it has significantly reduced out-of-pocket spending.
However, declining private health expenditure alongside rising tobacco use creates a classic moral hazard. When preventable, consumption-driven diseases are treated largely at public expense, the fiscal burden increasingly shifts to the state, threatening the long-term sustainability of welfare programmes.
Weak fiscal and regulatory counterweights
Despite the health burden, tobacco products contribute only about 2.4 per cent of gross tax revenue. Proposed duty hikes, such as those under the Central Excise (Amendment) Bill, 2025, are steps forward but insufficient on their own.
Regulatory failures persist. Surrogate advertising—often using pan masala or “silver-coated cardamom” branding—continues openly, with celebrity endorsements undermining public health messaging. Enforcement gaps have allowed cheap, addictive products like gutkha to proliferate.
A deeper welfare contradiction
Perhaps the starkest signal of policy failure lies in household budgets. Among the rural bottom 40 per cent, spending on pan, tobacco and intoxicants exceeds spending on education. This undermines the state’s broader claims on human capital development, nutrition and intergenerational mobility.
A welfare state cannot simultaneously subsidise healthcare for tobacco-induced illnesses while allowing addictive consumption to erode investments in education and wellbeing.
What to note for Prelims?
- Key findings of HCES 2023-24 related to tobacco consumption.
- Rural–urban differences in tobacco and gutkha use.
- Link between tobacco use and non-communicable diseases.
- Basic features of Ayushman Bharat.
What to note for Mains?
- How rising tobacco use undermines fiscal sustainability of public healthcare.
- Class and regional dimensions of tobacco consumption in India.
- Moral hazard issues in welfare expansion.
- Need for integrated taxation, regulation and public health strategies.
