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Kerala has announced 14.5% ‘fat tax’ on food like burgers, pizza, pasta, sandwich, donuts sold in fast food chain. This is analysed as a two-pronged strategy for
Effect of ‘fat tax’ on various stakeholders
The children and new generation are more addicted to fast food. Typically, fast food are luxury products which display conspicuous consumption pattern and seen as style statement or glamorous for youth.
Short term effects
Long term effects
However, if there is not much decline in consumption, there might be rise in inflation.
Context of decision
To increase revenue and encourage healthy food habits. It is an innovative initiative of the government to encourage MNCs and fast food chains to work upon the nutritional content of the food products and come up with better nutritionist food. This will provide them bargaining power to ask for tax incentives in future.
Five fronts
Other examples
Demark and Hungary have also tried for similar kind of taxation. Bihar in January had ‘samosa tax’. The other states may follow the footsteps. The decision has to be taken as ultimately it is a good decision that any product not good for health be attached to higher taxes.
Potential for value added products
It is not going to have negative impact on food processing industry with heathy products. However, the fattening food products industry will have to incur more expenditure on increased taxes as well as research.
India’s food processing industries are at a very nascent stage. The product offering should be such that can be sold in domestic or export market. It is not a disincentive to the FDI as India has a large market and their products can be catered to large population. Thus, there are lot of lucrative options for them to innovate in healthy food option.
Standardisation of nutritional content and food
It is a broader objective in the broader parlance of WHO. All this is done in sync with advocacy of WHO. Healthy food is necessity of the present and generations to come. This is the rationale behind such decision. The only challenge facing is that how to bring change in the eating habits of the young people. It is a win-win situation for various stakeholders in the value chain:- government, consumers, MNCs.
Conclusion
Taxes on products like alcohol or cigarette is to dissuade the consumption of such products. If young generation has to be encouraged with healthy options, such decisions can be helpful in short run. In long run, comprehensive and holistic approach is needed.
Time management is big issue at present. Not only young generation but children and adults chose food that is quick, tasty and easily available. Hence, it is now highly crucial to launch a mission in form of ‘Healthy India’. Talking to new generation, creating the environment and making them understand the importance of healthy body and healthy mind for a healthy life. It is especially important to sensitise the young generation.
Healthy food must become part of the curriculum. Negative impacts of such fast foods have to be known and spread. No country is allowed to mess with health and education. If such is the case, the country has unsustainable future.
Connecting the dots:
‘Taxing is not a permanent solution, behavioural change is the way ahead’. Consider the statement’s validity wrt to ‘fast food taxes’ levied.
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