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Modi Government Is Considering A 'Fat Tax' On Junk Food And Sugary Drinks

"We have also suggested that revenue earned from such tax be invested in health schemes." 

16/01/2017 2:36 PM IST | Updated 16/01/2017 6:25 PM IST
Amit Dave / Reuters

The Modi government is considering raising taxes on junk food and sugary drinks and this "fat tax" could be included in the 2017-2018 Budget, slated to be presented on 1 February.

The Economic Times reported today that a 11-member group including secretaries of the health, sanitation and urban development had met with Prime Minister Narendra Modi and advocated for a "fat tax," which could play a role in countering diseases such as diabetes and obesity.

The Hindustan Times reported that the group of secretaries had recommended "imposition of additional taxes on foods with added sugar, salt and saturated fats."

"In our presentation to the PM, we suggested higher taxes on junk food and sugary beverages because consumption of such products is growing fast and fuelling several lifestyle diseases like obesity, diabetes and heart disorders. We have also suggested that revenue earned from such tax be invested in health schemes," a member of the group told ET.

A senior government told HT, "This will help increase public spending on health, which is just 1.16% of the GDP now."

A study published in the Lancet Journal last year found India to be among the top five countries with an obesity problem. India is home to over 40 percent of the global underweight population, but it also the third most obese country in the world, with 41 million obese people.

Last year, Kerala became the first state in India to impose a "fat tax" of 14.5 percent on burgers, pizzas, doughnuts and tacos served in branded restaurants. In 2016, Philadelphia became the first major city in the United States to impose a soda tax.

But implementing a "fat tax" could be a problem. The Hindustan Times pointed out that the Denmark was forced to roll back a similar tax in 2011, with people going in for cheaper alternatives.

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