The total economic costs attributable to tobacco use from all diseases in the country in the year 2011 for persons aged 35-69 years was Rs 1,04,500 crore, according to a study
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The biggest shareholder in the country’s largest tobacco company, ITC, is none other than the government of India. And now, a group of eminent citizens is agitating for this to change. Their argument: Given the harmful effects of tobacco and the government’s strong anti-tobacco message, its investments in tobacco companies are antithetical to its aim of reducing tobacco consumption.
A public interest litigation (PIL) admitted in the High Court of Bombay has asked the court to direct the government to divest its holdings in tobacco companies among which the Kolkata-headquartered ITC and Hyderabad-based VST Industries are the most prominent. It also wants the court to prohibit the government from making fresh investments in tobacco companies.
Filed by a group of eminent citizens that includes R Venkataramanan, the managing trustee of Tata Trusts, and Sumitra Pednekar, the widow of Satish Pednekar, the former home minister of Maharashtra who died of throat cancer, the PIL argues that these investments violate Article 21 of the constitution that guarantees the right to life for every citizen.
The petitioners were represented by MZM Legal and Avishkar Manu Singhvi.
An ITC spokesperson declined to comment on the matter.
The government of India, through its insurance arms Life Insurance Corporation of India, General Insurance Corporation of India, the New India Assurance Company, Oriental Insurance Company Limited and Specified Undertaking of the Unit Trust of India (SUUTI), holds 30.25 percent in ITC according to its latest shareholding pattern. The New India Assurance Company holds 1.7 percent in VST Industries. The four insurance companies and SUUTI have been made a party to the case as have the insurance regulator IRDA and the Union ministry of health. The petition argues that ITC is primarily a tobacco company as 47 percent of its revenue and 85 percent of its profit come from the sale of cigarettes.
India’s ministry of health in a 2014 study titled the Economic Burden of Tobacco Related Diseases in India stated that the total economic costs attributable to tobacco use from all diseases in the country in the year 2011 for persons aged 35-69 years was Rs 1,04,500 crore. This was 12 percent more than the combined expenditures of state and central governments in 2011-12.
The petitioners would like to see the Rs 1,07,000 crore value of the government stake in ITC -- an amount that it describes as “locked up”-- to be used to provide a Rs 1 lakh insurance cover for every family in India.
The increased pressure on the government comes at a time of declining investments in tobacco companies worldwide. In Australia as many as 35 superannuation funds have decided to run tobacco-free mandates since 2012. In May 2016, the AXA Group, an insurer, decided to divest 1.8 billion euros in tobacco industry assets.
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