Context: In India, unhealthy eating habits are rapidly growing, and there is a need for higher taxes on High Fat Sugar Salt (HFSS) foods to help reduce their consumption.
About HFSS foods:
- It may be defined as foods (any food or drink, packaged or non- packaged) which contain low amounts of proteins, vitamins, phytochemicals, minerals and dietary fiber but are rich in fat (saturated fatty acids), salt and sugar and high in energy (calories) that are known to have negative impact on health if consumed regularly or in high amounts (Ministry of Women and Child Development).
Need to tax HFSS foods:
- Public health concerns: According to a World Bank report of 2019, worldwide, 70% of all overweight and obese people live in Low- and Middle-Income Countries.
- Economic burden: Obesity’s cost in India was $23 billion in 2017, potentially rising to $480 billion by 2060. This highlights the economic impact of unhealthy diets.
- Revenue generation: Can generate revenue for governments, which can be allocated to development of social sector.
- Growing consumption: India, the world’s largest sugar consumer, has seen snack and soft drink sales triple, exceeding $30 billion. This indicates a worrying rise in HFSS food consumption.
Initiative taken to reduce consumption of HFSS foods:
- Eat Right Movement, 2018 : Launched by FSSAI, to improve public health in India and combat negative nutritional trends to fight lifestyle diseases.
- GST rates on ultra-processed foods: Tax on sugar-sweetened beverages (SSBs) with a 28% GST rate and 12% compensation cess.
- Kerala’s Fat Tax: In 2016, Kerala introduced a ‘fat tax’, which later merged into India’s Goods and Services Tax in 2017, which later got subsumed into India’s Goods and Services Tax in 2017.
Global Initiative:
- Colombia’s “junk food law” on ultra-processed foods, providing a model for other nations.
- Over 60 countries have implemented taxes on sugary drinks.
- Countries like Denmark, France, Hungary, Mexico, South Africa, the UK, and the US have specific HFSS food taxes.
Way forward:
- HFSS taxation in India should prioritize enhancing public health rather than being perceived solely as an economic or fiscal policy.
- The promotion of nutrition literacy and effective food labelling is crucial.
- There is a need for a nutrient-based tax model, involving higher taxes on products high in fat, sugar, and salt.
- HFSS food tax can be both non-regressive and fiscally neutral.