In­dia’s Real and Deadly To­bacco Prob­lem A Re­treat for Hol­lande And a Loss for France

Leaf-wrapped and string-tied bidis— not cig­a­rettes—are the way lo­cals light up La­bor unions have again flexed their mus­cles— and the gov­ern­ment has once more caved

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Start­ing in April, the gov­ern­ment of In­dia will re­quire that cig­a­rette packs be largely cov­ered in graphic warn­ing la­bels. That’s smart; in other coun­tries, such warn­ings have ef­fec­tively pushed smok­ers to quit. The trou­ble is that cig­a­rettes aren’t In­dia’s big­gest to­bacco prob­lem.

Most In­di­ans who smoke light up a much cheaper, un­fil­tered prod­uct called a bidi: shred­ded to­bacco wrapped in a tendu, or ebony, leaf and tied with a string. Pop­u­lar among the poor—a pack can cost as lit­tle as 10¢—bidis in 2009 ac­counted for 85 per­cent of smoked to­bacco in In­dia. They have lower to­bacco con­tent than cig­a­rettes, but more nico­tine, tar, and car­bon monox­ide. Stick for stick, they’re dead­lier.

Yet suc­ces­sive gov­ern­ments have shied away from dis­cour­ag­ing bidi smok­ing. The new law re­quires warn­ing la­bels on only one side of bidi packs. And bidis are barely taxed. As of 2013, the ex­cise bur­den on bidis barely topped 5 per­cent; the World Health Or­ga­ni­za­tion rec­om­mends 70 per­cent. (Na­tional ex­cise taxes on cig­a­rettes, at less than 40 per­cent of the re­tail price, could stand to be some­what higher, too.) Hand­made bidis are taxed even less than ma­chine-made ones, and those made by the small­est pro­duc­ers are ex­empt al­to­gether. This en­cour­ages a sprawl­ing ru­ral in­dus­try in which women roll bidis at home for lit­tle pay.

De­fend­ers say higher taxes would make bidis un­af­ford­able to the poor­est In­di­ans. But that’s pre­cisely how a tax would ben­e­fit pub­lic health. In­dia has the world’s sec­ond-largest pop­u­la­tion of smok­ers af­ter China—more than 100 mil­lion peo­ple —and more than a mil­lion to­bacco-re­lated deaths each year. In 2011 the Min­istry of Health and Fam­ily Wel­fare es­ti­mated that the eco­nomic cost at­trib­ut­able to to­bacco use had reached $22.4 bil­lion, more than the cen­tral and lo­cal gov­ern­ments spent on health care that year.

Yet in In­dia, un­like in the U. S. and Europe, the num­ber of smok­ers con­tin­ues to grow. And fewer than 5 per­cent French Pres­i­dent François Hol­lande re­cently came up with some good pro­pos­als for re­form­ing the coun­try’s no­to­ri­ously rigid la­bor laws. Most of them never made it into the bill pre­sented to his cab­i­net on March 24. It’s a lost op­por­tu­nity his coun­try will have cause to re­gret.

The orig­i­nal plan, strongly sup­ported by Finance Min­is­ter Em­manuel Macron, wouldn’t have scrapped the totemic 35-hour work­week law en­tirely, but it would have made life much eas­ier for France’s be­lea­guered em­ploy­ers—loos­en­ing the rules on work­ing hours, re­strict­ing union pow­ers, and mak­ing it eas­ier for com­pa­nies to dis­miss work­ers they don’t need. Light­en­ing these bur­dens would have boosted em­ploy­ment and lifted the econ­omy.

The re­treat was un­nec­es­sary. French vot­ers aren’t im­pla­ca­bly op­posed to eco­nomic re­form. Macron is the gov­ern­ment’s most pop­u­lar politi­cian by far. And ever since Ni­co­las Sarkozy was elected pres­i­dent in 2007 with a man­date to re­form, it’s been clear that there’s a con­stituency for change. Yet protests by unions and stu­dents were enough to make the gov­ern­ment back down.

Sooner or later, these re­forms will have to be taken up again. Unions rep­re­sent only about 8 per­cent of French em­ploy­ees, but their statu­tory role as co-man­agers of France’s health and so­cial se­cu­rity sys­tem, and as rep­re­sen­ta­tives of French em­ploy­ees (whether they’re union mem­bers or not), gives them grossly dis­pro­por­tion­ate power. Lay­offs, of­fice moves, and petty man­age­ment de­ci­sions are sub­ject to their re­view. The rules bind com­pa­nies with 50 or more work­ers: No won­der so many stop hir­ing at 49.

Hol­lande’s ear­lier pro­posal was mod­er­ate, even to a fault. In di­lut­ing it al­most to noth­ing, he’s de­nied France its best chance to cre­ate jobs and boost growth. <BW>

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