Consider the following statements regarding rising tobacco consumption in India and its welfare-state implications: Statement I: The sharp increase in gutkha consumption among poorer households, as revealed by Household Consumption Expenditure Survey (HCES) 2023-24, intensifies fiscal pressure on publicly funded health insurance schemes by increasing the long-term burden of non-communicable disease (NCD) related claims. Statement II: Sin taxes on low-priced tobacco products such as gutkha have low price elasticity, meaning even significant increases in tax rates do not proportionately reduce consumption, thereby continuing to place a heavy burden on public-health costs. Statement III: An increase in real Monthly Per Capita Consumption Expenditure (MPCE) among poorer households offsets the public-health impact of higher gutkha consumption because improvements in overall consumption expenditure are generally associated with healthier lifestyle transitions. Which one of the following is correct in respect of the above statements?

Question

Accepted Answer

Only one of the Statements II and III is correct, and that explains Statement I.

Answer

Neither Statement II nor Statement III is correct.

Answer

Both Statement II and Statement III are correct, but only one of them explains Statement I.

Answer

Both Statement II and Statement III are correct, and both of them explain Statement I.

Download Single Question PDF

Share with Friends & Study Groups

Preparing for Economics?

Practice by Subject

Practice by Exam

Topic-Wise Solved Questions