The key findings of the study state that a 10 percent increase in cigarette prices will lead to almost a three percent decrease in consumption and a seven percent increase in government revenues.
It also said that cigarette excise can be increased by as much as 370 percent of present levels, leading to a 54 percent decline in consumption and 115 percent increase in revenue.
"The current tax rates of tobacco products are not only low, but the tax structure of tobacco products are complex and tax governance poor.
"As a result, tobacco taxes and therefore prices have not deterred tobacco consumption.
"Significant potential exists to hike tax rates in India to reduce tobacco consumption and mop up revenue to the government which is presently fiscally-challenged," said Sakthivel Selvaraj, senior public health specialist, economics and financing, PHFI.
