New Delhi: A new working paper by members of the Economic Advisory Council to the Prime Minister (EAC-PM) has flagged what it calls an “uncomfortable truth India can no longer afford to ignore”—tobacco consumption is rising sharply across rural and urban India.
In rural India, tobacco-consuming households rose from 9.9 crore in 2011-12—accounting for 59.3 percent of all rural households—to 13.3 crore in 2023-24 or 68.6 percent, reflecting a 33 percent increase in absolute terms.
Urban India fared even worse. Tobacco-consuming households increased from 2.8 crore (34.9 percent of urban households) in 2011-12 to 4.7 crore (45.6 percent) in 2023-24—a 59 percent surge in numbers and more than a 10-percentage-point increase in share.
The working paper, ‘Rise in Tobacco Consumption and Policy Implications’, was released last week. Authored by EAC-PM member Shamika Ravi and a young professional Partha Protim Barman, it draws on unit-level data from the National Sample Survey (NSS) 68th Round (2011-12) and the latest Household Consumption Expenditure Survey (HCES) 2023-24.
“Tobacco consumption is rising fast, spreading wider, and embedding itself deeper into the lives of poorer households—just as the state expands publicly funded healthcare. This collision of trends is not accidental, and it carries serious implications for health outcomes, fiscal sustainability, and social policy,” the paper says.
Apart from the rise in the number of households consuming tobacco, the paper notes that spending on it has also gone up. After adjusting for inflation, per capita expenditure on tobacco grew by 58 percent in rural areas and 77 percent in urban areas between 2011-12 and 2023-24. “Tobacco now accounts for around 1.5 percent of monthly per capita consumption expenditure (MPCE) in rural areas and 1 percent in urban areas,” the paper says.
The paper underlines rising tobacco use as both a public health crisis and a fiscal risk. Citing Union health ministry estimates, it notes that nearly 13 lakh deaths in India are attributable to tobacco each year. “Tobacco consumption is one of the main factors of increasing Non-Communicable Diseases (NCD) in India,” the paper notes, adding that smoking tobacco exacerbates lung cancer, chronic obstructive pulmonary disease and heart disease, while smokeless products like gutkha are linked to oral and esophageal cancers.
At the same time, paper highlights that government spending on healthcare is increasing. Government healthcare expenditure grew from 29 to 48 percent of total health expenditure between FY2015 and FY2022, while out-of-pocket spending declined.
This, the paper argues, creates a potential “classic moral hazard problem of insurance”, as people take on more risk or become careless when someone else takes care of the cost. “In case of health insurance, when government takes care of healthcare costs, people may feel less urgency to avoid unhealthy practices,” the paper says.
Consumption patterns of tobacco
Gutkha consumption in rural India has exploded. The share of rural households consuming gutkha rose from just 5.33 percent in 2011-12 (89 lakh households) to 30.45 percent in 2023-24 (5.96 crore households) a staggering 565 percent increase.
In urban India, gutkha consumption also grew sharply from 3.07 percent in 2011-12 to 16.84 percent in 2023-24.
The report describes the rise in gutkha consumption as “very alarming”, noting that it now accounts for 41 percent of total rural tobacco expenditure—the highest among all tobacco products.
Cigarette consumption has also surged. In rural areas, the incidence rose from 4.81 percent to 11.20 percent. In urban India, it increased from 8.41 percent to 18.05 percent. Cigarettes now account for 47 percent of total tobacco expenditure in urban areas, the highest among any other tobacco products.
In contrast, bidi consumption has declined slightly. In rural India, the share of households consuming bidi fell from 26.85 percent to 23.18 percent. “As monthly per capita consumption expenditure has increased, people started to move away from bidi to more packaged and branded tobacco items like cigarette and gutkha,” the paper says.
Statewise trends
State-level data reveals sharp regional patterns. In rural areas, Tripura reports the highest tobacco incidence among 96.4 percent of households in 2023-24, followed by Arunachal Pradesh (94.3 percent), Mizoram (92.7 percent), and Meghalaya (89.8 percent). Among large states, Madhya Pradesh (89 per cent), Bihar (87 percent) and Uttar Pradesh (83.3 percent) also show high prevalence.
In tobacco consumption, urban trends mirror rural patterns especially in the North-East belt. Mizoram leads with 91 percent of urban households consuming tobacco, followed by Tripura at 89.8 percent. Among larger states, Bihar (75.6 percent) and Madhya Pradesh (72.5 percent) stand out.
The data shows a completely different trend in southern states both in urban and rural areas. Only 22 percent of urban households in Kerala show incidence of tobacco consumption in 2023-24; the share rises to 27.4 percent in rural areas. Similarly, Tamil Nadu has only 25.3 percent and 36.3 percent of urban and rural households consuming tobacco, respectively.
Tobacco consumption by class
The burden of tobacco consumption is heavier among poorer households. In rural India, 70.2 per cent of households in the bottom 40 per cent of the consumption class reported tobacco use in 2023-24, compared to 63.4 per cent among the top 20 per cent of the consumption class. In urban areas, 52 per cent of the bottom 40 per cent households consume tobacco, compared to 36.6 per cent among the top 20 per cent of the consumption class.
The paper underlines inequality as well, with higher tobacco consumption reported from the bottom 40 per cent of the consumption class and lower among its top 20 per cent both in urban and rural areas.
The paper also draws attention towards spending patterns. In rural India, the bottom 40 per cent of households spend 4 per cent of their monthly per capita consumption expenditure on pan, tobacco and intoxicants, compared to just 2.5 per cent on education.
(Edited by Nardeep Singh Dahiya)
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