Gutka Industry Ban

In: Business and Management

Submitted By vtumats
Words 5669
Pages 23
Candidate Name: Yashraj Shukla
Candidate Number: 002272-0143

Session: May 2014

Introduction:
Chewing tobacco, more commonly known as Gutka in India, is a social concern in India; specifically in the northern states of India. Due to gutka being a social concern the state governments in India have begun to place a ban against the production and consumption of gutka. A ban is an official order that prohibits something, in this case it prohibits the production and selling of gutka. Gutka is a sweetened mixture of chewing tobacco combined with a mixture of two types of nuts, betel and palm nut. State governments have imposed a ban on the consumption and production of gutka; however it has not been implemented by the central government of India.
According to the following table smokeless tobacco (such as gutka) is consumed by 25.9% of the population which would be approximately 329 million people. As gutka is sold at nominal prices it’s easier to obtain than the other forms of tobacco. This allows the lower income groups to purchase and consume gutka rather than other forms of tobacco such as cigarettes, pan masala etc. This is supported by Table 1.
Table 1

Current Population of India 2013

1.27 Billion1

Population Consuming Gutka

329 Million

Rural Population Consuming Gutka

29.3%

Urban Population Consuming Gutka

17.7%

People in rural areas tend to be from an economically backward society and thus do not possess the same amount of money as people living in the urban areas. Individuals in urban areas also consume gutka, though, usually as a cheaper alternative to cigarettes and pan masala.

Gutka is a product that, through its consumption, adversely affects a third party: society, without harming the producers. This is a social cost towards society and is defined as a negative externality in consumption, as consumers are…...

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