J.D.

BIRLA INSTITUTE (MANAGEMENT SECTION)

NAME: ROLL NO.: SECTION: SEMESTER: SUBJECT: TOPIC: MENTOR:

DIVYUSH GOENKA 51 A BBA (5th SEMESTER) TERM PAPER TOBACCO INDUSTRY IN INDIA Mr. SUMANTA BHATTACHARYA
Term Paper submitted in partial fulfillment Of the requirements of the Graduate Degree BACHELOR IN BUSINESS ADMINISTRATION

J.D.BIRLA INSTITUE at the JADAVPUR UNIVERSITY at KOLKATA

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The Controller of Examination, Jadavpur University, Kolkata.

Respected sir,

This research work has been conducted by me and is an original work. The references used have been mentioned in the bibliography. This research is a partial fulfillment of the requirement for the BBA degree to be awarded by the Jadavpur University.

Yours faithfully,

(DIVYUSH GOENKA)

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DECLARATIONS:
To include plagiarism and ethical issues statements and word count is a formal requirement. I declare the following: That the material contained in this term paper is the end result of my own work and that due acknowledgement has been given in the bibliography and references to ALL sources, be they printed, electronic or personal. That unless this term paper has been confirmed as confidential, I agree to an entire electronic copy or sections of the term paper to being placed on the e-learning portal, if deemed appropriate, to allow future students the opportunity to see examples of past term papers. I understand that if displayed on the e-learning portal it would be made available for no longer than five years and that student would not be able to print off copies or download. The authorship would remain anonymous. I agree to my term paper being submitted to a plagiarism detection services, where it will be stored in a database and compared against work submitted from this or any other school or from other institutions using the service. In the event of the service detecting a high degree of similarity between content within the service this will be reported back to my supervisor and second marker, who may decide to undertake further investigation that may ultimately lead to disciplinary actions, should instances of plagiarism be detected. I declare that ethical issues have been considered, evaluated, and appropriately addressed in this research.

SIGNED:

DATE: NAME: ROLL NO/ BATCH: MENTOR:

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ABSTRACT
This term paper provides details about the tobacco industry that occupies a prime place in the Indian economy on account of its considerable contribution to the agricultural, industrial and export sectors. India is the second largest producer of tobacco in the world. My term paper also witnesses the changes in production, export and import of tobacco in our country on the basis of market share, yield per hectare, area of cultivation, population, and wholesale price index. It also covers the history of the industry, the initiatives taken by the Indian Government against the tobacco industry, the challenges and problems faced and the growth prospects of this industry. The research has been done on the basis of the various journals and the research papers. My term paper even stresses on the numerous problems faced by the tobacco industry in its day to day working which in turn challenges its survival like the manufacturing, particularly of bidis, is also a source of employment and hence of income for a large number of people. Thus any attempts to control the use of tobacco would need to take into account the economic impact on these sectors.

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ACKNOWLEDGEMENT

A project can be comprehended as a supplementary , long term educational assignment necessitating personal initiative that is planned , devised and contemplated by an either an individual or a group of individuals. Hence, in lieu of this statement I extend my deep sense of gratitude and indebtedness to my Director Dr. Asit Datta for his initiative for the preparation of this paper. I would like to thank Mr.Sumanta Bhattacharya for his guidance and support for continuous improvement of this term paper. I am thankful to our librarians for allowing me to access library resources, books and other reading material for the preparation of this term paper. I am also thankful to all the authors and institutions that have spend their time in writing about the subject of my term paper.

I would like to thank all my friends and colleagues from college for their great help and valuable hints to complete my term paper.
Last but not the least I would like to thank my family for his support and encouragement, for without him, my project would not have been successful.

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SERIAL NO.
1.

INDEX
INTRODUCTION

PAGE NO.
7

1.1 OBJECTIVES

1.2 SCOPE OF THE INDUSTRY

2.

LITERATURE REVIEW

9-14

2.1 LITERATURE REVIEWED

15-16

3.

PROBLEMS STATEMENT

17

4.

DATA ANALYSIS

18-22

5.

CONCLUSION

23

6.

RECOMMENDATIONS AND LIMITATIONS

24

7.

ANNEXURE

25-39

8.

BIBLIOGRAPHY

40

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INTRODUCTION

(CH. 1)

Tobacco is an agro based product processed from the fresh leaves of plants in genus Nicotiana'. Tobacco is widely available for sale in dried and cured forms and is often smoked (tobacco in the form of a cigar or cigarette, or in a smoking pipe, or in a water pipe or a hookah. Tobacco can also be chewed, or sniffed into the nose in the form of powdered snuff). The term tobacco industry connotes to those companies engaged in the growth, preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-related products. All the methods of consumption of tobacco result in the absorption of nicotine in varying amounts into the user's blood stream. Prolonged use of tobacco or tobacco products may result in significant risks of developing various cancers as well as strokes, and severe cardiovascular and respiratory diseases. Chewing tobacco has been a tradition in India for centuries. Of the total amount of tobacco produced in the country, around 48% is in the form of chewing tobacco, 38% as bidis, and only 14% as cigarettes. Thus, bidis, snuff and chewing tobacco (such as gutka, khaini and zarda) form the bulk (86%) of India's total tobacco production. In the rest of the world, production of cigarettes is 90% of total production of tobacco related products. Tobacco is a principal cash crop of National importance. It has been playing a prominent role in the development of Nation's Economy. Although the cultivation of Tobacco is restricted to 0.3% of the total cultivated area, it provides employment to large number of people on the one hand. On the other hand, it makes significant contribution to National Exchequer by way of excise revenue and foreign exchange earnings. Tobacco being a labour intensive crop provides employment to more than 60 lakhs people who are engaged in the farming curing, redrying, packaging, grading, manufacturing distribution, export and retailing activities. The bidi industry which provides employment to around 44.00 lakhs essentially unskilled rural folks mostly women is also arresting the influx of rural labour to urban centers. The per capita consumption of cigarettes in India is merely a tenth of the world average. This unique tobacco consumption pattern is a combination of tradition and more importantly the tax imposed on cigarettes over the last 2 decades. Cigarette smokers pay almost 85% of the total tax revenues generated from tobacco. India ranks 4th in the total tobacco consumption in the world. But India's cigarette consumption ranks 11th in the world.

The Indian tobacco industry

India is the second largest producer of tobacco in the world after China. However, India holds a meager 0.7% share of the US$ 30 billion global trade in tobacco. Despite being the second largest producer, India is only the ninth largest exporter of tobacco and tobacco products in the world. Out of the total tobacco produced in India, only one-third
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is flue-cured tobacco suitable for cigarette manufacturing. In India, three major cigarette players dominate the market, primarily ITC with 72% market share, Godfrey Phillips with 12% and VST with 8% share of the market.

OBJECTIVES

(CH. 1.1)

The primary objective of this dissertation is to study and analyze the growth of the tobacco industry. The study envisions bringing into light the phases of the growth of the Indian tobacco industry and how this growth has benefited India when it comes to revenue generation, employment generation, etc. To analyze the major players of the market. A study on the Indian Tobacco industry with special reference to its production and exports.

SCOPE OF STUDY

(CH. 1.2)

The opportunities for productivity enhancement in tobacco growing would appear to be more limited than those in the tobacco industry. Tobacco growing will thus continue to occupy many people. But how their number will develop in the future is hard to say with precision. Stagnant demand for tobacco makes it likely that, worldwide, the number will go down. Just where this will occur depends on the circumstances of each country and region. People involved in the production of high quality tobaccos at competitive cost of the type for which demand prospects are good would appear to be in a more favorable position than others hopefully. But whatever changes do take place, they are bound to occur slowly. Given an opportunity I would really like to extend my term paper to a full project so that I can find out with my research as to what is in store for this industry in the near changing future and how does it effect our Indian economy on the basis of excise revenue and export generation.

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Literature Review (CH.2)

BRIEFING ABOUT DIFFERENT TYPES OF TOBACCO Cigarettes In India cigarette manufacturing industry is in organised form. There are 25 cigarette manufacturing companies producing most of the well-known brands of cigarette in the country. Kolkata, Mumbai, Vadodara, Ghaziabad, Bangalore, Saharanpur, Munger, Allahabad, Jalandhar and Hyderabad are the important centres of cigarette manufacturing in the country.The total annual capacity is about 9,648 crores of cigarettes. Over half of the cigarette leaf produced in the country is purchased by the Indian Leaf Tobacco Development Company for sale in domestic market and export. During 1975-76 the total value of cigarette export was Rs. 5.3 crores. U.K., Russia, UAR, Germany and Japan are the main importers of the Indian cigarettes. A Cigarette Tobacco Research Station has been set up at Guntur (Andhra Pradesh) to improve the quality of the products. Cigar Dindigul, Chennai and Tiruchchirappalli in Tamil Nadu are the main centers of cigar making in the country. Recently its manufacturing has also been started in West Bengal and Orissa. Mostly Virginia tobacco from Guntur and Tiruchchirappalli areas is preferred in cigar making. The quality of the cigar depends upon the leaf is wrapped on it. The process of cigar main involves rolling, pasting the stipends and heating at 150 to 160 of temperature to ensure safety from insects. Chillum This involves smoking tobacco in a clay pipe. Chillum smoking increases chances of oral cancer and lung cancer. A chillum is shared by a group of individuals, so in addition to increasing their risk of cancer, people who share a chillum increase their chances of spreading colds, flu, and other lung illnesses. A chillum is also used for smoking narcotics like opium. Beedi Beedi is a poor man's cigarette. Beedi making is a popular cottage industry in many parts of the country. Important centres are Jabalpur, Gondia, Nagpur, Kamptee, Bhandara, Pune, Sinner (Nashik), Nipani (Belgaum), Bhind and Mangalore. In Madhya Pradesh beedi making is a flourishing industry. Cheap tobacco with mixtures is used for beedi making. Most of this tobacco comes from Kheda and Vadodara districts of Gujarat and Belgaum district of Karnataka. Inferior variety of tabacco from Uttar Pradesh, Bihar, Andhra Pradesh and South Karnataka is also mixed up in small quantities. Leaves of tendu (Diospyros melanoxylon) and kachnal (Bauhinia racemosa), found in the forests of Madhya Pradesh, Orissa and Tamil Nadu are used as wrapping material. The

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annual production is around 700 crore bidis. India exported 5,800 kg of beedies valued at Rs. 3.2 crores in 1975-76 to Asian, African and European countries. Crushed and dried tobacco is wrapped in tendu leaves and rolled into a beedi. Beedis are smaller in size than the regular company-made cigarettes so more beedis are smoked to achieve the desired feeling caused by nicotine. Beedi smokers are at least at an equal risk of developing cancers as cigarette smokers due to use of smoked tobacco. Beedi making is a source of livelihood for many families. In some families, everyone including children helps make bedis. The frequent inhalation of tobacco lakes has similar effects as the actual use of the tobacco product. Therefore, these families have an increased risk of lung diseases and cancers of the digestive tract. And, addiction is common among these families. Hookah Hookah smoking involves a device that heats the tobacco and passes it through water before it is inhaled. It is not a safer way to use tobacco. The use of hookah was once on the decline, but it has increased in recent years. Hookah is thought to be a sign of royalty and prestige and is available in high priced coffee shops in flavours like apple, strawberry, and chocolate. It is marketed as a "safe" recreational activity, but it is not safe and is increasingly used by college students of both sexes. Use of tobacco in this form can result in tobacco addiction. Chutta smoking and reverse chutta smoking Chuttas are coarse tobacco cigars that are smoked in the coastal areas of India. Reverse chutta smoking involves keeping the burning end of the chutta in the mouth and inhaling it. This practice increases the chance of oral cancer. Cheroot Tamil Nadu (Chennai and Tiruchchirappalli) is important for cheroot industry in the country. The industry utilises superior quality tobacco mostly obtained from Tiruchchirappalli district of Tamil Nadu. The average annual production is about 2,500 crore cheroots. Hookah Tobacco It is an important smoke for rural folk in North India. There are two types of hookah tobacco: (i) mitha, and (ii) kadwa which are prepared by mixing the cured tobacco leaves with jelly obtained from semi-used molasses. Delhi, Lucknow, Gorakhpur and Rampur are important centers of manufacturing hookah tobacco. Tobacco or tobacco-containing products are chewed or sucked as a quid, or applied to gums, or inhaled. Khaini This is one of the most common methods of chewing tobacco. Dried tobacco leaves are crushed and mixed with slaked lime and chewed as a quid. The practice of keeping the quid in the mouth between the cheeks and gums causes most cancers of the gums, the most common mouth cancer.
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Gutkha This is rapidly becoming the most popular form of chewed tobacco in India. It is very popular among teenagers and children because it is available in small packets (convenient for a single use), uses flavouring agents and scents, and is inexpensive (as low as Re 1/-). Gutkha consists of areca nut (betel nut) pieces coated with powdered tobacco, flavouring agents, and other secret ingredients that increase the addiction potential. Gutkha use is responsible for increased cases of oral cancers and other disorders of the mouth and teeth in young adults. Paan with tobacco The main ingredients of paan are the betel leaf, areca nut (supari), slaked lime (chuna), and catechu (katha). Sweets and other condiments can also be added. The varieties of paan are named for the different strengths of tobacco in it. Some people think that chewing paan without tobacco is harmless, but this is not true. The International Agency for Research on Cancer (IARC) has established that people who chew both the betel leaf and the areca nut have a higher risk of damaging their gums and having cancers of the mouth, pharynx their gums and having cancers of the mouth, pharynx, oesophagus, and stomach. Paan masala Paan masala is a commercial preparation containing the areca nut, slaked lime, catechu, and condiments, with or without powdered tobacco. It comes in attractive sachets and tins, which are easy to carry and store. The tobacco powder and areca nut are responsible for oral cancers in those who use these products a lot. Mawa This is a combination of areca nut pieces, scented tobacco, and slaked lime that is mixed on the spot and chewed as a quid. The popularity of mawa and its ability to cause cancer matches that of gutkha. Its use is rising among teenagers and young adults in India. Mishri, gudakhu and toothpastes These preparations are popular because people believe incorrectly that tobacco in the product is a germicidal chemical that helps in cleaning teeth. Mishri is roasted tobacco powder that is applied as a toothpowder. Mishri users often become addicted and start applying it as pastime. Gudakhu is a paste of tobacco and sugar molasses. These preparations are commonly used by women and involve direct application of tobacco to the gums, thus increasing the risk of cancer of the gums. Tobacco-containing toothpastes, which are promoted as antibacterial pastes, are popular among children. This habit often becomes an addiction, and the children graduate to other forms of tobacco, thus increasing their chance for cancers.

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Dry Snuf This is a mixture of dried tobacco powder and some scented chemicals. It is inhaled and is common in the elderly population of India. Snuf is responsible for cancers of the nose and jaw. Chewing Tobacco Zarda, Qiwami, Danedar, Pan Masala are the important varieties of chewing tobaccos available in the market. To make chewing tobacco leaves are soaked in the lime water, dried, mixed with scents and chemicals. Recently chewing pan masala is gaining popularity in youngsters and lower section of the society both in urban and rural areas. The harmful chemicals used in such pan masalas have increased the occurrence of deadly mouth and throat diseases including cancer. Delhi, Kanpur, Lucknow and Varanasi are main centers. The Central Tobacco Research Institute, Rajahmundry conducts fundamental research on tobacco. Similarly there are specialised research institutes for cigarette at Guntur, for Bidi at Anand, for cigar and cheroot at Dindigul, for chewing tobacco at Pusa (Bihar), and for hookah and snuff tobacco at Firozpur.

Gutka haul in Gujarat (The HINDU, AHMEDABAD, September 12, 2012)

Gutka worth Rs.2.5 lakh was seized by the State Food & Drug Control Administration on Tuesday, the first day of the ban on the tobacco product. The maximum seizure was reported in Surat (7,632 pouches), Rajkot (7,000) and Ahmedabad (105 kg) among other places, said a top official. Violation of the ban attracts at least six months imprisonment and fine up to Rs.5 lakh.

Students say no to tobacco ( The HINDU, TAMIL NADU TIRUCHI, September 13, 2012 )
An anti-tobacco rally highlighting the consequences of tobacco consumption was taken out by NCC cadets of Jamal Mohamed College on Tuesday.The awareness rally was taken out by the 2(TN) BN NCC Infantry cadets of the college.Colonel K.Ashokan, officer commanding, HQ 15 Sector Rashtriya Rifles, Signal Company, flagged off the rally at the college.The rally was taken out through Toll Gate, Head Post Office and Central Bus Stand, before it culminated at the college.Khader Mohideen, principal, presided and Lieutenant Muzammil, NCC officer, 2 (TN) BN of Jamal Mohamed College organised.

ITC will be able maintain margins: IIFL Wealth (Economics Times Aug 17, 2012, 10.43AM IST, senior fund manager|Prashastha Seth|ITC Ltd.|ITC|India Infoline|IIFL Wealth|et now , In a chat with ET Now, Prashastha Seth, Senior Fund Manager, IIFL Wealth, India Infoline, shares his views on ITC.)

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ET Now: What do you make of yesterday's selling in ITC, the fact that IDFC has come out with a report and they clearly indicated that the global tobacco industry is currently going through a rough patch and Indian tobacco industry will follow that same path? Prashastha Seth: Our view is slightly different. Our view is that in India 70% of the sales happen in the loose forms, so I do not think there will be a big impact of the pictorial warnings, if and when they come in India on sales of ITC. What we are seeing is that the sales in terms of volumes continuing to be flattish and that is what we expect going forward as well. But we believe that companies like ITC will be able to raise prices and maintain their margins. So to that extent, we would not be as worried on the outlook of the company has, what the report yesterday would suggest.

China would buy large quantity of tobacco from India:Kamalvardhan Rao (Times Of India Oct 4, 2011, 12.35am IST, Tobacco Board|Kamalvardhan Rao|China )
GUNTUR: Tobacco Board chairman Kamalvardhan Rao on Tuesday exuded confidence that China would buy a large quantity of the commodity from India. Addressing mediapersons after his three-day extensive tour of China, Rao said he was happy that China was showing interest in Indian tobacco.China, which produced 2,300 million kgs of tobacco, needs more of the commodity for internal consumption and Indian tobacco mixes well with their tobacco, he said. "That is why China prefers Indian tobacco," he said adding, that a Chinese trade delegation would visit India in a couple of months.Rao said though India exported 800 million kgs of tobacco valued at Rs 4,400 crore in 2010-2011, this year there may be slight decline in the exports.

INITIATIVES TAKEN BY INDIAN GOEVRNMENT AGAINST TOBACCO INDUSTRY FROM 1990 To 2009
1990: Central Government issued directive for prohibiting smoking in public places, banned tobacco advertisements on National Radio and T.V. channels, advised State Governments to discourage sale of tobacco around educational institutions and mandated display of statutory health warning on chewing tobacco products. 1991: Regional and National Consultations on Tobacco or Health 1991: Central Government directed the Central Board of Film Certification to comply with the Cinematograph Act of 1952 1995: The Parliamentary Committee on Subordinate legislation of the Tenth Lok Sabha examined the rules framed under Cigarette (Regulation of Production, Supply and Distribution) Act, 1975 and made specific suggestions for stronger provisions to achieve better results in tobacco control 1995: Expert Committee on the economics of tobacco use constituted by the Central Ministry of Health.
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1999: High Court of Kerala announced ban on smoking in public places 1999: Ministry of Railways banned sale of cigarettes and beedis on railway platforms and in trains 2000: Central Government banned tobacco advertisements on cable television 2001: Supreme Court of India mandated a ban on smoking in public places. 2001: Ministry of Railways imposed ban on sale of gutkha on railway station, concourses, reservation centres and in trains 2001: The National Human Rights Commission of India (NHRC) convened a South-East Asia Regional consultation on Public Health and Human Rights, and advocated tobacco control as an essential measure to protect human rights. 2001-2003: Ban on Gutkha production and sale of gutkha and paan masala containing tobacco or not containing tobacco in states of Tamil Nadu, Andhra Pradesh, Maharashtra, Madhya Pradesh, Bihar and Goa using the provision of the Prevention of Food Adulteration Act. 2003: The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 2007 & 2008: The Ministry of Health and Family Welfare launched the pilot National Tobacco Control Programme in 2007 in 9 states of the country covering 18 districts. In 2008, it was extended to 42 districts across 21 states. It includes setting up of state tobacco control cells, sensitization of stakeholders, training programmes, cessation initiatives and development of IEC materials among other steps. 2008 & 2009:Most recently, all public and workplaces have been declared smoke free following the rules which came into effect from 2 October 2008. In addition, picture health warnings have become mandatory on all tobacco products from 31st May 2009. ( Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pdf)

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LITERATURE REVIEWED
Research Papers

(CH.2.1)

According to Tobacco use in India: prevalence and predictors of smoking and chewing in a national cross sectional household survey by Rani M, Bonu S, Jha P, Nguyen SN, Jamjoum L published in the year 2003 the main objective of the research was to estimate the prevalence and the socioeconomic and demographic correlates of tobacco consumption in India. The conclusion of the research was an agenda to improve health outcomes among the poor in India must include effective interventions to control tobacco use. Failure to do so would most likely result in doubling the burden of diseases-both communicable and noncommunicable-among India's teeming poor. It even stated that there is a need for periodical surveys using more consistent definitions of tobacco use and eliciting information on different types of tobacco consumed. The study also suggested a need to adjust the prevalence estimates based on household informants.

According to The economics of global tobacco control by Prabhat Jha, senior scientist and Frank J Chaloupka, professor of economics published on 5th August, 2000 , the aim of the research was the economics of the global tobacco usage and control. The outcome of the research was that the threat posed by smoking to global health is unprecedented, but so is the potential for preventing millions of smoking related deaths with highly effective policies. A comprehensive tobacco control policy is not likely to harm economies and is required to be made in near future.

According to the Global and regional estimates of the effectiveness and cost-effectiveness of price increases and other tobacco control policies by M. Kent Ranson, Prabhat Jha, Frank J. Chaloupka, Son N. Nguyen published in Received 7 May 2001: accepted 13 August 2001, the objective of this study was to provide conservative estimates of the global and regional effectiveness and cost-effectiveness of tobacco control policies, using a static model of the cohort of smokers alive in 1995, they estimated the number of smoking-attributable deaths that could be averted by: (1) price increases, (2) nicotine replacement therapy (NRT), and (3) a package of non-price interventions other than NRT. The conclusion of this paper was that tobacco control is cost-effective relative to other health interventions. The analyses suggest that tax increases would be cost-effective. Non-price measures are also cost-effective in many settings. Measures to liberalize access to NRT, for example, by changing the conditions for its sale, are likely to be cost-effective in most settings. However, individual countries would need to make careful assessments before deciding to provide subsidies for NRT and other cessation interventions for poor smokers. As with all cost-effectiveness analyses, there estimates were a subject to considerable variation in actual settings, notably in costs. Thus,

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the conclusion even stated that local cost effectiveness studies were required to guide local policy.

According to Women, Tobacco, and Cancer: An Agenda for the 21st Century Working Group by U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health, National Cancer Institute published in July 2004, the research was conducted to develope a better understanding of the biological, psychological, and behavioral mechanisms and processes associated with womens and mens responses to nicotine exposure. It further believed that it was critical to develop a better prevention and cessation interventions for addiction and to prevent and treat tobacco-related cancers. The conclusion of this research was that the spectrum of tobacco control and prevention disciplines should be implemented. Greater emphasis must be placed on translating knowledge into effective program and policy interventions that can be applied to all populations, especially populations of women at greatest risk for tobacco use and tobacco-caused disease. It even suggested the reduction, and ultimately elimination of tobacco use and tobacco-caused disease among women is possible.

According to Research on Tobacco in India (Including Betel Quid and Areca Nut) by Cecily Stewart Ray, Prakash Gupta and Joy de Beyer published in August 2003, the research was conducted to show the impact of tobacco on youth in general and children, on the fact that many youngsters resort to smoking and intake of tobacco because of severe peer pressure and social obligations. The research further focuses on the teachings in schools and colleges, the prevailing environment and surrounding which increases the intake of tobacco. The conclusion of the research was the believe that intake of tobacco can be reduced if health education on the dangers of tobacco was provided. Furthermore it stressed on the fact that counseling should be provided at all levels. Regular campaigns should be held to aware the society specially the rural people about the ill effects of tobacco.

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PROBLEMS / PROSPECT STATEMENT

(CH. 3)

Manufacturing, particularly of bidis, is also a source of employment and hence of income for a large number of people. Thus any attempts to control the use of tobacco would need to take into account the economic impact on these sectors.

Tobacco industrys continuous resistance to strong tobacco control laws or regulations. Violation of Add ban through: (a)Surrogate methods (Red & White Bravery Awards-GPI) (b)Brand stretching (Wills Life Style Apparel-ITC) (c) Sponsorship of events (Formula 1 news in print media-Marlboro) Violation of ban on smoking in public places due to: (a) Lack of awareness among stakeholders (managers of restaurants, hotels etc.) (b) Low compliance levels among the management of public places (c) Low motivation at Health Ministries at State Level Violation of provision allowing point-of-sale advertisement (a) Display board specifications being violated (b) Health warning area specified on this board has been reduced by the industry

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DATA ANALYSIS (CH.4)

TABLE 1: Excise Revenue (Rs. In Millions) for the year 1960 to 2011 GRAPH 1: Excise Revenue (Rs. In Millions) for the year 1960 to 2011 Observation: Positive sloping curve which is increasing at an increasing rate, but the excise revenue is increasing at a faster rate than the increase of the export revenue. Furthermore, there is a constant increase from the year 1960 to 2011 (the highest being Rs. 14804 million in the year 2010-2011).

TABLE 1.1: Export Revenue (Rs. In Millions) for the year 1960 to 2011 GRAPH 1.1: Export Revenue (Rs. In Millions) for the year 1960 to 2011
Observation: Positive sloping curve with a steep positive sloping curve from the year 1990-1991 to 2010-211. There is a major difference over a span of 51 years the highest being Rs.16050 crore and lowest being Rs. 160 million. As compared to the excise revenue , export revenue is also increasing at an increasing rate but with a lower intensity.

TABLE 1.2: Area (1000 Hectares) for the year 1960 to 2011 GRAPH 1.2: Area (1000 Hectares) for the year 1960 to 2011 Observation : The graph showing the area of production of tobacco over the span of last 51 years from 1960 to 2011 clearly indicates variation over the year. The graph is not constant with fluctuations over the years for eg. Firstly, it increases (1961-1970) , remains constant (1971-1981) and further decreases (1981-1990). It is also been clearly observed that there is a heavy downfall in the area ( hectares) for the year 1991 to 2000 , difference being 120,000 hectares.

TABLE 1.3: Production (Million Kgs) for the year 1960 to 2011 GRAPH 1.3: Production (Million Kgs) for the year 1960 to 2011 Observation: It is observed that there is constant fluctuation in the graph which depicts production of tobacco represented in million Kgs.While production increases from the year 1960-1991 there is a major downfall in the year 1991 to 2001. Following the year of major downfall, there is increase in production from 2001 to 2011 which is 210million kgs.

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TABLE 1.4: AREA, PRODUCTION, EXCISE & EXPORT REVENUES FOR THE YEAR 1960 TO 2011 GRAPH 1.4: AREA, PRODUCTION, EXCISE & EXPORT REVENUES FOR THE YEAR 1960 TO 2011 Observation: The graph shows that excise revenue is increasing at an increasing rate, but the it is increasing at a faster rate than the increase of the export revenue. Whereas for the export revenue there is a major difference over a span of 51 years the highest being Rs.16050 crore and
lowest being Rs. 160 million. As compared to the excise revenue, export revenue is also increasing at an increasing rate but with a lower intensity. The graph even shows the area of production of

tobacco which firstly increases (1961-1970), secondly remains constant (1971-1981) and thirdly decreases (1981-1990). It is also been clearly observed that there is a heavy downfall in the area ( hectares) for the year 1991 to 2000 , difference being 120,000 hectares. In Production it is observed that there is constant fluctuation in the graph. Following the year of major downfall in 1991 to 2001, there is increase in production from 2001 to 2011 which is 210million kgs.

TABLE 2: Production ( Million Kg ) and Export ( Million Kg ) for the year 1999 to 2010 GRAPH 2: Production (Million Kg) and Export (Million Kg) for the year 1999 to 2010
Observation : The graph shows a comparison between production of tobacco and export of the produced tobacco in million kilograms for the ten years period from 1999 to 2010. For the first five years of observation, it has been observed that the production is not constant as it keeps on increasing and decreasing. For the last five years of observation, it is clearly depicted that the exports are increasing a faster rate than the production, being production almost constant from the 2007 to 2009 and again increasing in the following year. Increase in export quantity (mill kg) is much higher than the increase in the production of tobacco. Comparison between the production (mill kg) of tobacco and its export (mill kg) shows that over 10 years exports has increased by 79% which is more than double the increase of the production which is 37%.

TABLE 3: Production (Million Kg) and Yield (Kg per Hectare) for the year 1999 to 2010 GRAPH 3: Production (Million Kg) and Yield (Kg per Hectare) for the year 1999 to 2010
Observation: With the reference to table no. 3 and the graph no. 3, we can observe that the production is not constant since 1999 to 2010, it keeps increasing decreasing or remain constant. In comparison to production the yield per hectare even fluctuates. From 1999 to 2001 the production has decreased but the yield per hectare has increased. From 2001 to 2005 yield per hectare and production are proportionate which is whenever the production is increasing the yield per hectare is increasing and vice versa. But again from the year 2005 to 2006 the yield per hectare has decreased regardless of the increase in production. From 2005 to 2009 the production is constant but the yield per hectare has Page | 19

decreased first and then increased n remain constant for the last two years (2008 and 2009). In the last year of observation (2009 to 2010) the yield has increased and there is also increase in production. Production (mill kg) increase over the 10 years is less than the increase in yield (kg/hectare). The yield per hectare of tobacco has increased from 1210 kg/hectare to 1800kg/hectare which is about 48% increase and is higher than increase in production (mill kg) which is 37%. As per the figure one can make out that there is no significant relation among the two variables.

TABLE 4: Production (Million Kg) and CigaretteProuction (In Million Pieces) for the year 1999 to 2010 GRAPH 4: Production (Million Kg) and Cigarette Prouction (In Million Pieces) for the year 1999 to 2010
Observation: With reference to table no. 4 and graph no. 4 we can clearly state that with the increase in production of tobacco there has been always an increase in the production of cigarette. Except for the year 2001to2002 in which though the production of tobacco increased but the production of cigarette decreased.

TABLE 5: Production (Million Kg) and Wholesale Price Index for the year 1999 to 2010 GRAPH 5: Production (Million Kg) and Wholesale Price Index for the year 1999 to 2010 Observation : With reference to table no. 5 and graph no. 5 it can be observed that the wholesale price index of tobacco has 2/3rd increase over the decade as compared to production increase which is less than half. It even shows the comparison between the production (mill kg) of tobacco and its wholesale price index that over 10 years WPI has increased by 77% which is more than double the increase of the production which is 37%.

TABLE 6: Production (Million Kg) and Area Under Cultivation (Million Hectare) for the year 1999 to 2010 Observation: With reference to table no. 6 we can observe that production has increased from 524million kgs to 720million kgs but astonishingly the area under has decreased 0.43million hectare to 0.36million hectare.

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TABLE 7: Production (Million Kg) and Taxes for the year 1999 to 2010 GRAPH 6: Production (Million Kg) and Taxes for the year 1999 to 2010 Observation: With reference to table no.7 and graph no.6, we can observe that production has increased by 37% and taxes have increased by 76% which is more than double. There has been a constant increase in the taxes with the increase in the production till 2005 but after 2005 the taxes have been lowed with constant production. Similarly, the taxes have started to rise again after 2008 till 2010 with production even increasing.

TABLE 8: Production (Million Kg) and Population for the year 1999 to 2010
Observation: With reference to table no.8, we can observe that population is always increasing a greater speed than the production of tobacco; earlier the production was fluctuating with increase in population. In the years 2005 to 2009 the production has remain constant though the population has increased.

TABLE 9: Production (Million Kg) and Per Capita Income ($) for the year 1999 to 2010 GRAPH 7: Production (Million Kg) and Per Capita Income ($) for the year 1999 to 2010 Observation: Shows a comparison between the production (mill kg) of tobacco and the per capita income (in $) shows that over 10 years (1999-2010) production has increased by 37% but the latter has increased more than 5 times.

TABLE 10: Production (Million Kg) and Cost of Production Per Hectare (Rs.) for the year 1999 to 2010 GRAPH 8: Production (Million Kg) and Cost of Production per Hectare (Rs.) for the year 1999 to 2010
Observation: With reference to table no.10 and graph no.8, we can observe that in the year 2000-2001 and similarly in the year 2002-2003 thought the production decreased but the cost of production has increased in both cases. From 2004 onwards the cost of production had been always increasing despite on production being constant in the years 2005, 2006, 2007, 2008, 2009.

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TABLE 11: Production (Million Kg) and Cost of Cultivation per Hectare (Rs.) for the year 1999 to 2010 GRAPH 9: Production (Million Kg) and Cost of Cultivation per Hectare (Rs.) for the year 1999 to 2010 Observation: With reference to the table no.11 and graph no. 9, we can draw a comparison between the production and cost of cultivation. Cost of cultivation has been always rising despite of the downfall of production in the years 2001, 2002 and 2003.

TABLE 12: Production (Million Kg), Sales (In Million) and Market Share for top four tobacco companies of India for the year 1991 to 2002 GRAPH 10: Production (Million Kg), Sales (In Million) and Market Share for tobacco companies for the year 1991 to 2002 Observation: With reference to table no.12 and graph no.10 we can make out that the maximum production, maximum sales and market share belong to ITC firstly, followed by Godfrey Phillips India ltd., thirdly VST and then GTC, the major four companies of the Tobacco in India, in comparison to other tobacco companies.

TABLE 13: Production (Million Kg) and Sales (Rs. In Millions) for the year 1991 to 2002 GRAPH 11: Production (Million Kg) and Sales (Rs. In Millions) for the year 1991 to 2002 Observation: With reference to table no.13 and graph no.11 we can make out that the maximum production, maximum sales and market share belong to ITC , GFI, VST and GTC , the major four companies of the Tobacco in India , in comparison to other tobacco companies. We even can observe that in all the years of observation ITC has more than 50% share of total production and sales of the top four companies.

TABLE 14: Market Share of the major four companies of tobacco in India for the year 1991 to 2011 GRAPH 12: Market Share of the major four companies of tobacco in India for the year 1991 to 2011 Observation: With reference to the Table no. 14 and pie chart ( graph no.12), it is very much clear that maximum market share is with ITC (72%) followed by Godfrey Phillips with 12% and VST and GTC with 8% each, when taken into account the top four major companies of Indian Tobacco Industry.
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Conclusions

(CH.5)

Tobacco occupies a prime place in the Indian economy on account of its considerable contribution to the agricultural, industrial and export sectors. India is the third-largest tobacco exporter in the world. India is exporting tobacco in more than 80 nations, over all continents. There is a constant increase in the excise revenue from the year 1960 to 2011 (the highest being Rs. 14804 million in the year 2010-2011).
As compared to the excise revenue, export revenue is also increasing at an increasing rate but with a lower intensity. The yield per hectare of tobacco has increased from 1210 kg/hectare to 1800kg/hectare which is about 48% increase and is higher than increase in production (mill kg) which is 37%. Wholesale price index of tobacco has 2/3rd increase over the decade as compared to

production increase which is less than half.

Export of tobacco has increased by 79% which is more than double the increase of the production which is 37% in India. Per capita income of the economy as increased by more than 5 times from 1999-00 to 2009-10.

With the increase in tax rate the production is not affected.

Manufacturing, particularly of bidis, is also a source of employment and hence of income for a large number of people.

ITC has more than 50% share of total production and sales amongst the top four companies
Maximum market share is with ITC (72%) followed by Godfrey Phillips (12%) and VST and GTC (8%) each, when taken into account the top four companies of Indian Tobacco Industry.

At present the Indian Tobacco Industry is providing livelihood to more that 25 million people
by indulging them in tobacco production and distribution across the country.

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RECOMMENDATIONS (CH.6)
Tobacco industry is one of the few industries which earn India a good amount of revenue and foreign earnings. Hence it should be taken care of as India is one of the major exporters of tobacco in the world. There is a huge demand for Indian tobacco in the world and as we have seen and concluded from the research production is an important factor of exports, hence it should be seen that the production is enough so that it can be exported. Cost of cultivation and cost of production together constitute the price of tobacco and both are significant factors for the industry, therefore they should be kept in control so as to maintain competitiveness in the world market. The Indian tobacco farmers are paid very less as compared to other countries. Steps should be taken to improve this situation as it leads to decrease in efficiency. The major manufacturers must devise cost effective export strategies for increased revenue and success. The government should take proper steps to see that it warns its customers of the ill effects of the consumption of tobacco but at the same time should see the sales and exports does not pay price for that.

LIMITATIONS
This research has faced a lot of limitations due to time, words and resource constraints.

No primary data has been collected, the research has been based on secondary data due to which the facts and figures used may vary and might not be that accurate too. Secondly, the Indian tobacco industry is a huge industry and therefore all aspects of the industry cannot be covered properly. The focus was mainly on the exports and production of tobacco and the various factors affecting it. Certain area like taxation and consumption could not be covered due to lack of time and resources. Thirdly, literature review had to be covered in a very precise manner to avoid overshooting of word limit. This restriction also had affect on other sections of the project.

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ANNEXURE

(CH.7)

TABLE 1: Excise Revenue (Rs. In Millions) for the year 1960 to 2011
YEAR 1960-1961 1970-1971 1980-1981 1990-1991 2000-2001 2010-2011 EXCISE REVENUE (Rs. In Million) 540 2284 7553 26957 81824 14804

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f GRAPH 1: Excise Revenue (Rs. In Millions) for the year 1960 to 2011

EXCISE REVENUE (Rs. In Million)

90000 80000 70000 60000 50000 40000 30000 20000 10000 0

EXCISE REVENUE (Rs. In Million)

Source: Refer to TABLE NO. 1

TABLE 1.1: Export Revenue (Rs. In Millions) for the year 1960 to 2011
YEAR 1960-1961 1970-1971 1980-1981 1990-1991 2000-2001 2010-2011 EXPORT REVENUE (Rs. In Million) 160 320 1400 2630 9034 16050

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f

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GRAPH 1.1: Export Revenue (Rs. In Millions) for the year 1960 to 2011

EXPORT REVENUE (Rs. In Million)

18000 16000 14000 12000 10000 8000 6000 4000 2000 0

EXPORT REVENUE (Rs. In Million)

Source: Refer to TABLE NO. 1.1

TABLE 1.2: Area (1000 Hectares) for the year 1960 to 2011
YEAR AREA (1000 Hectares) 1960-1961 1970-1971 1980-1981 1990-1991 2000-2001 2010-2011 400 450 450 410 290 390

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f GRAPH 1.2: Area (1000 Hectares) for the year 1960 to 2011

AREA (1000 Hectares)

500 400 300 200 AREA (1000 Hectares)
100

Source: Refer to TABLE NO. 1.2

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TABLE 1.3: Production (Million Kgs) for the year 1960 to 2011
YEAR PRODUCTION (Million Kg's) 1960-1961 1970-1971 1980-1981 1990-1991 2000-2001 2010-2011 310 360 480 560 490 700

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f GRAPH 1.3: Production (Million Kgs) for the year 1960 to 2011

PRODUCTION (Million Kg's)

800 700 600 500 400 300 200 100 0

PRODUCTION (Million Kg's)

Source: Refer to TABLE NO. 1.3

TABLE 1.4: AREA, PRODUCTION, EXCISE & EXPORT REVENUES FOR THE YEAR 1960 TO 2011
YEAR 1960-1961 1970-1971 1980-1981 1990-1991 2000-2001 2010-2011 AREA (1000 Hectares) 400 450 450 410 290 390 PRODUCTION (Million Kg's) 310 360 480 560 490 700 EXCISE REVENUE (Rs. In Million) 540 2284 7553 26957 81824 14804 EXPORT REVENUE (Rs. In Million) 160 320 1400 2630 9034 16050

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f

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GRAPH 1.4: AREA, PRODUCTION, EXCISE & EXPORT REVENUES FOR THE YEAR 1960 TO 2011

Area , Production, Excise & Export Revenue

80100 75100 70100 65100 60100 55100 50100 45100 40100 35100 30100 25100 20100 15100 10100 5100 100

AREA Hectares) PRODUCTION (Million Kg's) EXCISE REVENUE Million) EXPORT REVENUE Million)

(1000

(Rs. In (Rs. In

Source: Refer to TABLE No. 1.4

TABLE 2: Production ( Million Kg ) and Export ( Million Kg ) for the year 1999 to 2010
Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 PRODUCTION(MILL KG) 524 488 530 500 470 600 700 700 700 700 720 EXPORTS(MILL KG) 138 108 99 120 150 136 167 181 205 224 248

Source: www.indiastat.com
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GRAPH 2: Production (Million Kg) and Export (Million Kg) for the year 1999 to 2010

Production And Exports

PRODUCTION(MILL KG) EXPORTS(MILL KG) 700 524 488 530 600 500 470 205 224 248 700 700 700 720

138

108

99

120

150

136

167

181

Source: Refer to TABLE NO. 2 TABLE 3: Production (Million Kg) and Yield (Kg per Hectare) for the year 1999 to 2010
YIELD (KG PER HECTARE)

Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

PRODUCTION (MILL KG) 524 488 530 500 470 600 700 700 700 700 720

1210 1715 1400 1337 1300 1498 1481 1407 1750 1750 1800

Source: www.indiastat.com

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GRAPH 3: Production (Million Kg) and Yield (Kg per Hectare) for the year 1999 to 2010

2000 1500 1000 500 0

19 99 20 00 00 20 01 01 -0 2 20 02 20 03 03 -0 4 20 04 20 05 05 20 06 06 -0 7 20 07 -0 8 20 08 -0 9 20 09 -1 0

PRODUCTION(MILL KG) YIELD (KG PER HECTARE)

Source: Refer to TABLE NO. 3

TABLE 4: Production (Million Kg) and CigaretteProuction (In Million Pieces) for the year 1999 to 2010
Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 PRODUCTION (Million KG) 524 488 530 500 470 600 700 700 700 700 720 CIGARETTE PRODUCTION (IN MILLION PIECES) 82859 75094 60577 54991 50009 54747 75711 85747 85991 85918 89960

Source: www.indiastat.com

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GRAPH 4: Production (Million Kg) and Cigarette Prouction (In Million Pieces) for the year 1999 to 2010

Production of Tobacco and production of Cigaratte

CIGARETTE PRODUCTION (IN MILLION PIECES) 2008-09 2006-07 2004-05 2002-03 2000-01 720 700 700 700 700 600 470 500 530 488 524 PRODUCTION (Million KG) 89960 85918 85991 85747

54747 50009 54991 60577

75711

75094

82859

Source: Refer to TABLE NO. 4 TABLE 5: Production (Million Kg) and Wholesale Price Index for the year 1999 to 2010
Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 PRODUCTION 524 488 530 500 470 600 700 700 700 700 720 (MILLION KG) WHOLESALE PRICE INDEX 172.7083 177.05 190.65 202.6917 204.9583 212.8167 223.8 238.6333 262.8833 287.4917 305.5667

Source: www.indiastat.com

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GRAPH 5: Production (Million Kg) and Wholesale Price Index for the year 1999 to 2010

WHOLESALE PRICE INDEX

800 700 600 500 400 300 200 100 0 PRODUCTION (MILLION KG) WHOLESALE PRICE INDEX

Source: Refer to TABLE NO. 5

TABLE 6: Production (Million Kg) and Area Under Cultivation (Million Hectare) for the year 1999 to 2010
PRODUCTION (MILLION KG) Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 524 488 530 500 470 600 700 700 700 700 720 0.43 0.26 0.35 0.33 0.37 0.37 0.37 0.37 0.35 0.33 0.36 AREA UNDER CULTIVATION (MILLION HECTARE)

Source: www.indiastat.com

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TABLE 7: Production (Million Kg) and Taxes for the year 1999 to 2010
PRODUCTION (MILL KG) Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 TAXES 524 488 530 500 470 600 700 700 700 700 720 8.46 36.65 43.41 56.62 41.8 61.48 35.02 32.17 28.39 33.45 35.65

Source: www.indiastat.com GRAPH 6: Production (Million Kg) and Taxes for the year 1999 to 2010
PRODUCTION (MILL KG) TAXES 700 600 524 488 530 500 470 700 700 700 720

8.46

36.65

43.41

56.62

41.8

61.48

35.02

32.17

28.39

33.45

35.65

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Source: Refer to TABLE NO. 7

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TABLE 8: Production (Million Kg) and Population for the year 1999 to 2010
PRODUCTION Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 (MILL KG) 524 488 530 500 470 600 700 700 700 700 720 POPULATION 1014003817 1028610567 1029991145 1045845226 1049700118 1065070607 1080264388 1095351995 1129866154 1147995904 1166079217

Source: www.indiastat.com TABLE 9: Production (Million Kg) and Per Capita Income ($) for the year 1999 to 2010
PER CAPITA INCOME PRODUCTION (MILLION KG) ( in $ ) Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 524 488 530 500 470 600 700 700 700 700 720 450 455 460 470 530 640 750 850 990 1080 1180

Source: www.indiastat.com

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GRAPH 7: Production (Million Kg) and Per Capita Income ($) for the year 1999 to 2010

Production of Tobacco and Per Capita India

1400 1200 1000 Axis Title 800 600 400 200 0 PRODUCTION (MILLION KG) PER CAPITA INCOME ( in $ )

Source: Refer to TABLE NO. 9 TABLE 10: Production (Million Kg) and Cost of Production Per Hectare (Rs.) for the year 1999 to 2010
COST OF PRODUC TION PER HECTAR PRODUCTION (MILLION Kg) E ( Rs.) Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 524 488 530 500 470 600 700 700 700 700 720 27387.6 27865.7 28716.99 29910.3 28962.85 30908.95 36738.32 37944.42 38876.78 39288.9 39978.85

Source: www.indiastat.com

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GRAPH 8: Production (Million Kg) and Cost of Production per Hectare (Rs.) for the year 1999 to 2010

PRODUCTION OF TOBACCO AND COST OF PRODUCTION OF TOBACCO

COST OF PRODUCTION PER HECTARE ( Rs.) 2008-09 2006-07 2004-05 2002-03 2000-01 720 700 700 700 700 600 470 500 530 488 524 PRODUCTION (MILLION Kg) 39978.85 39288.9 38876.78 37944.42 36738.32 30908.95 28962.85 29910.3 28716.99 27865.7 27387.6

Source: Refer to TABLE NO. 10

TABLE 11: Production (Million Kg) and Cost of Cultivation per Hectare (Rs.) for the year 1999 to 2010
COST OF CULTIVATION PER HECTARE (Rs.) 289765.7 258897.5 263853.7 283276.56 291424.14 308409.16 350706.23 383904.94 395786.6 401250.7 407125.8

Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

PRODUCTION(MILL KG) 524 488 530 500 470 600 700 700 700 700 720

Source: www.indiastat.com

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GRAPH 9: Production (Million Kg) and Cost of Cultivation per Hectare (Rs.) for the year 1999 to 2010

PRODUCTION OF TOBACCO AND COST OF CULTIVATION OF TOBACCO

COST OF CULTIVATION PER HECTARE (Rs.) PRODUCTION(MILL KG)

2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00

720 700 700 700 700 600 470 500 530 488 524 308409.16 291424.14 283276.56 263853.7 258897.5 289765.7

407125.8 401250.7 395786.6 383904.94 350706.23

Source: Refer to TABLE NO. 11 TABLE 12: Production (Million Kg), Sales (In Million) and Market Share for top four tobacco companies of India for the year 1991 to 2002
Companies

Production (IN MILLIONS) Sales (Rs. IN MILLION) Market Share (%) 1991-1992 1967-1997 2001-2002 1991-1992 1967-1997 2001-2002 1991-1992 1967-1997 2001-2002 ITC Ltd. 32953 46093 53551 22307 49270.7 80135.8 62.4 75.2 80.6 Godfrey Phillips India Ltd. 15802 12896 8857 6704.9 8037.1 8994.9 18.8 12.3 9 VST Industies Ltd. 14900 13545 8990 5089.1 5368.8 6499.8 14.2 8.2 6.5 GTC industries Ltd. 1866 8344 7214 1558 2502.1 3584.6 4.4 3.8 3.6 Total 70563 83078 88000 35739.7 65358.2 99381.4

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f

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GRAPH 10: Production (Million Kg), Sales (In Million) and Market Share for tobacco companies for the year 1991 to 2002

120000 100000 80000 60000 40000 20000 0 1991-1992 1967-1997 2001-2002 1991-1992 1967-1997 2001-2002 1991-1992 1967-1997 2001-2002 GTC industries Ltd. VST Industies Ltd. Godfrey Phillips India Ltd. ITC Ltd.

Production Sales (Rs. IN Market Share (IN MILLIONS) MILLION) (%)

Source: Refer to TABLE NO. 12 TABLE 13: Production (Million Kg) and Sales (Rs. In Millions) for the year 1991 to 2002
Production (IN MILLIONS) Sales (Rs. IN MILLION) 1991-1992 1967-1997 2001-2002 1991-1992 1967-1997 2001-2002 ITC Ltd. 32953 46093 53551 22307 49270.7 80135.8 Total of the major four companies 65521 80879 78612 35659 65178.7 99165.1 Total 70563 83078 88000 35739.7 65358.2 99381.4 Companies

GRAPH 11: Production (Million Kg) and Sales (Rs. In Millions) for the year 1991 to 2002
300000 250000 200000 150000 100000 50000 0 1991-1992 1967-1997 2001-2002 1991-1992 1967-1997 2001-2002 Total of the major four companies ITC Ltd. Total

Production (IN MILLIONS)

Sales (Rs. IN MILLION)

Source: Refer to TABLE NO. 13

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TABLE 14: Market Share of the major four companies of tobacco in India for the year 1991 to 2011
Market Share ITC 72% Godfrey Phillips 12% VST 8% GTC 8%

Source: Report on Tobacco Control in India , Ministry of Health and Family Welfare Government of India , Edited by K.Srinath Reddy , Prakash C. Gupta , http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pd f GRAPH 12: Market Share of the major four companies of tobacco in India for the year 1991 to 2011

Market Share
ITC Godfrey Phillips 8% 12% 72% 8% VST GTC

Source: Refer to Table No.14

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1. 2. 3. 4. www.indiastat.com www.ebscohost.com
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(CH.8)

http://cghr.org/wordpress/wp-content/uploads/Global-and-regional-estimates-of-theeffectiveness-and-cost-effectiveness-of-price-increases-2002.pdf 5. http://planning.cancer.gov/library/2004_wtobacco.pdf 6. http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/28 1627-1095698140167/Ray-ResearchOn-whole.pdf 7. http://timesofindia.indiatimes.com/business/budget-2012/pre-budget/Budget-2012-13Tobacco-products-set-to-get-costlier/articleshow/12268464.cms 8. http://indiabudget.nic.in/ub2012-13/cen/dojstru1.pdf 9. http://www.thehindu.com/health/policy-and-issues/article3781957.ece 10. http://www.cbec.gov.in/customs/cst2012-13/chap-24.pdf 11. http://www.searo.who.int/LinkFiles/Tobacco_Free_Initiative_NewsletterVol_3No2.pdf 12. http://mohfw.nic.in/WriteReadData/l892s/911379183TobaccocontroinIndia_10Dec04.pdf 13. http://isid.org.in/pdf/tobacco_1.pdf 14. http://www.indianindustry.com/trade-information/indias-tobacco-export.html 15. http://www.bestindiansites.com/tobacco/ 16. http://www.agriculture-industry-india.com/agricultural-commodities/tobacco.html 17. http://www.financialexpress.com/news/fdi-in-tobacco-industry-banned/602062/ 18. http://www.business-standard.com/india/news/govt-bans-fdi-in-cigarettemanufacturing/391345/ 19. http://www.whoindia.org/LinkFiles/Tobacco_Free_Initiative_03Chapter-06.5.pdf 20. tobacco-industry_1349911 21. Business Week (BW). 22. Financial Times (FT). 23. Jha, P.; Chaloupka, F. (eds.). 2000. Tobacco control in developing countries, Oxford, Oxford University Press. 24. (Tobacco) Company Annual Reports (AR).Various companies, various years. 25. Tobacco Journal International (TJI). See in particular the articles by Marcelo G. Crescenti. 26. CMIE(CENTRE FOR MONITORING INDIAN ECONOMY) 27. www.indiantobacco.com 28. TOBACCO BOARD OF INDIA 29. www.opppapers.com/tobacco industry-analysis-india-page37.html 30. www.equimaster.com/indian tobacco industry-a view 31. www.indiabudget.nic.in 32. Reddy SK, Gupta PC. Report on tobacco control in India. New Delhi, India: Ministry of Health and Family Welfare, Government of India; 2004 33. Rani M, Bonu S, Jha P, Nguyen SN, Jamjoum L. Tobacco use in India: Prevalence and predictors of smoking and chewing in a national cross sectional household survey. Tob Control 2003;12:e4. 34. http://www.tobaccoatlas.org/growing.html 35. http://www.tobaccoatlas.org/growing.html

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