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Q. Kerala’s Fat Tax: Is imposing tax on junk food served in branded restaurants will alter consumer food preferences? Discuss.
Jul 13, 2016 Related to : GS Paper-2

Ans :

Introduction-

The Kerala government has proposed a 14.5% fat tax' on burgers, pizzas and other junk food served in branded restaurants. The move is aimed at making people more conscious about food choices and curbing obesity by discouraging the consumption of junk foods.

Will it alter consumer food preferences?

  • North American Country Mexico taxes on non-essential food items that are rich in fat or calories can effectively alter food choices. The country witnessed a 5.1% dip in consumption levels in foodstuff that had more than 275 kcal/100 g energy density following the imposition of an 8% levy in 2014. Sugar-sweetened drinks saw a 12% drop in intake at the end of the very first year the tax was introduced.
  • Paying high charge is definitely discourages the consumption of junk food and above example proves this point. To the some extent imposing higher taxes on junk foods alter the consumer food preferences and in this background it is welcome move direction.
  • Present move taxes only on food served in branded restaurants, consumed by the higher middle and upper classes, are a very tiny part of the problem of poor food choices for the State’s population.
  • It will impact on vary few population and keeps larges population out of its purview. Hence ignoring a wide variety of high-calorie food items and focussing on a few branded restaurants won’t serve the real purpose of fight against obesity. To contain the consumption of junk food government needs to adopt several measures.

Suggestions-

  • Government should set up a threshold limit for fat and/or calorie and tax all foods items that are above this limit and bringing sugar-sweetened drinks and refined products under the taxable product list should be a priority.
  • As Indians consumes a few times more than WHO’s recommended limit of 5 grams a day and most of it comes from packaged food items, hence packaged food items that have high salt content should be additionally taxed.
  • There are a number of food items sold in India that contain as high as 35-40 per cent of trans fats, hence there is need of charging a very high rate of tax on food items that contain trans fats.
  • Taxing bad foods should be accompanied by cross-subsidies of healthy and wholegrain food items.

Conclusion-

India is suffering from health issues like obesity and diabetes, which are results of consumption of junk foods. Taxing on these will definitely alter the consumption pattern, but taxation should include all those junk items instead of taxing only on junk food served in branded restaurants. Besides taxing there need of broad based approach like spreading awareness of consumption pattern, specific food policy etc.


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