Tax ‘HFSS’ foods, view it as a public health imperative
- The consumption of High Fat Sugar Salt (HFSS) foods is a major risk factor for health issues such as obesity, diabetes, and high blood pressure.
Key Facts
- World Bank Data, 2019
- 70% of overweight and obese people globally reside in Low- and Middle-Income Countries, with a 55% rise in rural areas.
- Non-Communicable Diseases (NCDs) burden in India has increased from 38% in 1990 to 65% in 2019.
- The global burden of diseases study shows that annually, 1.2 million deaths in India can be attributed to dietary risks alone.
Economic Impact and Dietary Shift in India
- The economic impact of overweight and obesity in India was estimated at $23 billion in 2017 and is projected to rise to $480 billion by 2060.
- The ultra-processed food sector in India experienced a 13.4% CAGR between 2011 and 2021.
- Sales of snacks and soft drinks in India exceeded $30 billion in the past year, indicating a concerning dietary trend.
Global Practices and Need for HFSS Tax
- Globally, many countries have implemented taxes on High Fat Sugar Salt (HFSS) foods to combat obesity.
- 16 countries including Denmark, France, Hungary, Mexico, South Africa, the UK, and the US have dedicated taxes.
- India's Kerala state introduced a 'fat tax' in 2016, later incorporated into the Goods and Services Tax (GST) in 2017.
Market Failures and Externalities
- Market failures associated with HFSS consumption contribute to negative externalities (societal costs) and internalities (consumer harm due to limited understanding).
- HFSS taxation can address societal burdens by curbing detrimental consumption habits, leading to reduced healthcare expenditures.
Designing Effective HFSS Tax
- HFSS tax should not be viewed primarily as a revenue-raising tool.
- It is a means to incentivize industry reformulation towards healthier alternatives.
- Differentiated tax rates based on nutritional quality can encourage product reformulation and make healthier choices more affordable.
- Current GST rates on ultra-processed foods in India do not align adequately with nutritional content.
Public Health Imperative
- HFSS taxation in India is not just an economic concern but a public health imperative.
- Well-designed taxes can act as a deterrent, promote healthier choices, prompt reformulation, improve public health and reduce the burden on the healthcare system.
Comprehensive Approach
- The HFSS taxation should be combined with measures like promoting nutrition literacy and effective food labelling.
- This is to create a more potent tool to combat the rising epidemic of overweight and obesity, fostering a sustainable and equitable food system.