Banning Gutkha – Will It Work

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The Supreme Court of India passed a law in December 2010 banning the sale of gutka in India in plastic sachets as of March 1, 2011.[1] Gutka is the most popular form of smokeless tobacco consumed in India and contains areca nut and other stimulants which dissolve into a red juice that has to be expectorated after chewing. It is marketed widely in India with sales on track to cross $9 billion by 2014. That’s huge volume given that a sachet costs between one and five rupees (or two and ten cents).

Research demonstrates that certain smokeless products, like snus in Sweden, are less risky than cigarettes and smoked tobacco and therefore considered a preferable alternative to smokable tobacco products. Unfortunately, by some accounts, the combination of tobacco and areca nut in gutka may be more harmful than smoking, leading to a significantly higher incidence of oral cancer among users and other side-effects. [2]

And the popularity of Gutka is rising. Healis, a public health research institute, surveyed 1,500 Mumbai residents aged 13 to 15 and found that double the students identified themselves as tobacco chewers versus a decade ago.

Gutkause is not limited to India. It is predominant among South Asian immigrants to the United States. Some American cities, including New York (with a heavy concentration of South Asians) have banned flavored tobacco to specifically target gutka and other similar smokeless products.

Although well intentioned, are these bans on the sale of gutka likely to be effective?

Policy makers might be sobered by the results of a natural experiment banning the sale of gutka in the state of Maharashtra in India. The state government of Maharashtra imposed a ban on the manufacturing and sale of gutka in August 2002 after a survey by the Indian Dental Association found that 10 to 40 percent of school and 70 percent of college students in Mumbai (the capital of Maharashtra) chew gutka. The ban was overturned in August 2004 by the Supreme Court. We analyzed data in the India Human Development Survey (IHDS), a nationally representative survey of 41,554 households in 1,503 villages and 971 urban neighborhoods across India conducted from November 2004 – October 2005, to study the effect of the ban on gutka consumption. The IHDS survey found that 88 percent of the respondents in Maharashtra used chewing tobacco, one of the highest usage rates in the country. Thus one of the lessons from the Maharashtra experiment was that the ban had little impact in altering people’s behaviors. At least as many, if not more, consumed chewing tobacco as did before the ban. While we have no data to show whether the ban was “successful” in restricting people from buying gutka, economic theory clearly suggests that banned items often find their way to the underground market where they are valued much higher than when they were freely available. As an example, another Indian state, Gujarat, has had a decades long ban on the sale of alcohol within it’s borders. However, it is widely known that truckloads of liquor are smuggled into the state every day from the neighboring states of Maharashtra, Rajasthan and Madhya Pradesh. The bootleggers make loads of money and are never short of cash![3]

So what might work? The striking, though perhaps not surprising finding from the IHDS survey is that gutka consumption was lowest among the highest literacy states, such as Kerala and Goa. In fact, when we parsed the data by dividing households into different income groups (using income as a proxy for education), we found that households in the highest income groups had the lowest average consumption of chewing tobacco. Hence, education and information likely serve as better deterrants to the spread of oral cancer than outright bans.

A ban on gutka consumption would also infringe on the personal choice of individuals. A better solution would be to help individuals make more informed choices. Governments in India and the U.S. may be more successful by diverting the funds they would spend on enforcement to educating citizens, especially school children, about the harmful effects of chewing tobacco. Easily enforceable regulations such as the prominent listing of all the carcinogens such as chromium, nickel, arsenic, lead and tobacco-related nitrosamines as well as tobacco warning labels with graphic images of mouth cancer on gutka packets could be initiated to create awareness about the dangers associated with its usage.

[1] Prohibiting the use of plastic sachets is intended to make the product more expensive and therefore less affordable for low income consumers.


Disclaimer: The views expressed in this writing are solely of the authors and do not necessarily reflect the views or policies of League of India, its Editorial Board or the business and socio-political interests that they might represent.

Rohan Poojara

Rohan Poojara is a researcher in the economic policy group of the American Enterprise Institute, a Washington DC based think-tank, where he writes frequently for the Enterprise Blog. He also manages the Foreign Policy Association's Southeast Asia blog. Rohan received his undergraduate degree in economics and business administration at Washington and Lee University while also spending a year abroad in the accounting and finance department of the London School of Economics.

Aparna Mathur

Aparna Mathur is an economist who writes about taxes and wages. She has been a consultant to the World Bank and has taught economics at the University of Maryland. Her work ranges from research on carbon taxes and the impact of state health insurance mandates on small firms to labor market outcomes. Her research on corporate taxation includes the widely discussed coauthored 2006 Wages and Taxes paper, which explored the link between corporate taxes and manufacturing wages.

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