Doctors and Health Professionals Appeals for Introducing Regulations on Sale of Smokeless and Other Untaxed Tobacco Products

* Regulations on manufacturing, distribution and sale of non-virginia tobacco can enhance Government revenues in the range of Rs 35,000 Cr – Rs 40,000 Cr protecting health of youth 

Shram, a self-help group working in collaboration with doctors and professionals working in the field of health and education to build awareness against tobacco and alcohol abuse, appeals to Dr. Harsh Vardhan, Minister of Health & Family Welfare and Smt. Nirmala Sitharaman, Minister of Finance to regulate the unorganized manufacturing, distribution and sale of smokeless and other non-virginia tobacco in India to curtail its widespread consumption, protecting health of citizens  and bring it under a taxation structure.

Smokeless tobacco in India is currently used majorly for unorganized manufacturing of chewing tobacco, gutka, pan masala variants, zarda and others. These products are widely available and consumed by the poorer section in India due to their affordability and accessibility in the absence of any regulations and taxation. According to a study published in BMC Medicine, India accounts for 70% of deaths globally caused due to chewing of smokeless tobacco. The need for regulations to curtail their use is even greater during COVID-19 as this variant of tobacco is mostly chewed and spat thereby aiding the spread of the virus. The requirement for regulations is driven further by the fact that India, as per the research, is a hotspot for smokeless tobacco consumption. 

While India has an expansive set of rules and laws to restrict and regulate tobacco used in cigarettes and cigars at par with international norms, smokeless tobacco products and variants do not fall under this umbrella despite being 85% of the tobacco grown in India across 15 states. This largely unorganized and unregulated sector sees consumers of all age groups with the average age of tobacco consumers being as early as 17.4 years, according to Global Adult Tobacco Survey. The survey also found that close to 30% of tobacco users across India used smokeless tobacco yet this remains a sector away from the purvey of any rules and regulations. 

The debilitating state of the smokeless tobacco sector demands a regulatory structure akin to that in place for other tobacco products. If smokeless tobacco is traded or processed through auction platforms governed by the Tobacco Board of India or via APMCs then it will ensure fair pricing and ample taxation. Regulations will also ensure that manufacturers do not evade taxes in this highly unorganized sector. 

Placing an appeal for introducing a regulatory framework for trading of smokeless tobacco, Dr. Pranasmita Kalita of Shram said, “Smokeless tobacco industry in India is majorly an unorganized sector that sees producers, manufacturers and distributors take advantage of it being outside the ambit of any regulatory or taxation structure. This has led to wide exploitation of labour and massive tax evasion. The need of the hour lies in putting in place the government taking into account this crisis and introduce policies and laws to regulate and ensure legally taxed trading of smokeless tobacco and its products. Suitable taxation on non-virginia tobacco can bring in revenue to the Government in the range of Rs 35,000 crores to Rs 40,000 crores approximately.”

Steps to tackle the sale, manufacturing and production of smokeless tobacco is of utmost importance now, during COVID-19 as products derived from this category of tobacco are chewed and spat instead of being swallowed or breathed in. A definitive regulatory policy and subsequent taxing can play a hand in curtailing its widespread consumption.  

$215 b losses for UK banks, says Moody’s report

UK banks are less than half way through posting £240 billion ($398 billion) of losses on loans and securities, a reflection of the country’s economic weakness, according to Moody’s Investors Service.

British banks are likely to record losses of at least £130 billion, in addition to £110 billion lost since the beginning of the credit crisis in 2007, Moody’s said in a report on Monday.

The company expects the sustained weakness of the UK macroeconomic environment to feed through into higher loan arrears with ensuing pressure on profitability and capital, it said.

British taxpayers have provided about £1.4 trillion of support to banks, becoming the biggest shareholder of Royal Bank of Scotland Group and Lloyds Banking Group, while seeking to shore up capital eroded by writedowns. British banks have raised about £120 billion of capital from the beginning of the credit crisis to mid-2009, Moody’s said. “We have been underweight on the banks for some time”, said Dave Bradbury who helps manage $6 billion at Canada Life in London.

Agencies

Will US debt increase by $2 trillion in 2009?

The US national debt is expected to jump by as much as $2 trillion this year, thus putting more pressure on the American economy, a leading daily here said.

At present, the country's debt stands at nearly $10.7 trillion. Of this $3 trillion is held by foreign investors , with China ($652.9 billion) and Japan ($585.5 billion) being the top two creditors.

The soaring national debt would saddle taxpayers with huge new interest payments for years to come, the Washington Post said.

"Some analysts also worry that foreign investors, the largest United States creditors, may prove unable to absorb the skyrocketing debt, undermining confidence in the US as the bedrock of the global financial system," the Post wrote.

The newspaper said economists from across the political spectrum have endorsed the idea of going deeper into debt to combat the worst ever economic crisis since great depression of last century.

They argue that even with an increase of $2 trillion national debt, the United States is in relatively good financial shape as compared to other industrial nations.

Japan's public debt equalled 182% of its GDP in 2007 and that of Germany was 65%, the newspaper said referring to a forthcoming report by Scott Lilly, a senior fellow at the Centre for American Progress.
Even a $2 trillion increase would push the US debt to about 53 of the overall economy. This is "only a few percentage points above where it was in the early 1990s," Lilly was quoted as saying by the newspaper.

Source: Agencies

US credit card cos losses could top $70 billion in 2009

Credit card companies have little to celebrate as many analysts brace for 2009 to be one of the worst years on record for consumer credit.

Losses for the industry could top $70 billion, but it is hard to predict how bad the pain will be.

US consumers have never before been so deeply in debt. There was nearly $1 trillion of credit and charge card debt outstanding as of October, up more than 25 per cent since 2003, according to the US Federal Reserve. That is in addition to $10.54 trillion in mortgage debt.

Unemployment, already at 15-year highs, is expected to rise to its highest levels since the early 1980s, when credit cards were not nearly as widespread.

In short, there's more debt than ever and fewer people are able to pay it.

"In many ways, we're in uncharted territory," said John Williams, an analyst at Macquarie Research.

Major credit losses are big trouble for Citigroup Inc, Bank of America, and other card issuers such as American Express Co and Discover Financial Services, which have seen their shares lose up to 80 per cent of their value in 2008.

The United States is not standing idly by. Citigroup received $45 billion of taxpayers' money in October and November. Bank of America has received $25 billion. American Express, which became a bank holding company, got approval last week to receive $3.4 billion from the taxpayer-funded Troubled Asset Relief Program.

Lenders, seeing potential big losses, are trying to protect themselves by tightening credit availability, which leaves consumers with fewer options.

This year's holiday shopping season was the worst since at least 1970, according to a report from the International Council of Shopping Centers.

"It is hard to see the light at the end of the tunnel," Williams said.

NOWHERE TO HIDE

No credit card company is safe. According to Citigroup analysts, more than one-fourth of the credit card portfolios of Citibank, Bank of America Corp, Capital One Corp, and Discover are subprime, which could lead to further losses.

Meanwhile, American Express is heavily exposed to troubled markets with high default rates such as Florida and California, and JP Morgan Chase & Co has to digest the portfolio of failed savings and loans company Washington Mutual.

Together, these six companies hold around 90 per cent of the total US outstanding credit card debt.

Citigroup and American Express have said they are tightening lending to mitigate their losses. JP Morgan and Bank of America declined to comment, while Capital One did not return calls seeking comment.

Credit card companies have reported increased losses. Discover, the No 4 US credit card network, posted worse-than-expected results in its fourth fiscal quarter, the first sign of the harsh deterioration of the industry, when the economic downturn picked up steam in October and November.

Discover almost doubled the money it set aside to cover credit losses. Analysts said its competitors would likely do the same in coming Credit Cards quarters, leading to lower earnings.

"Things have changed pretty rapidly in the last two months. I'm hopeful that we will see the worst in 2009, but I don't know yet," David Nelms, chief executive of Discover, told reporters in a recent interview.

Many analysts and credit card executives look at 2009 and remember the beginning of the mortgage crisis in early 2007, when lenders consistently underestimated what was coming up.

Said Chris Brendler, analyst at Stifel Nicolaus, "The risk is that things get much worse than expected."

Source: Agencies