Junk food, sugary drinks may attract higher taxes in Budget 2017

In the upcoming Union Budget 2017, junk food and sugar-sweetened beverages may attract higher taxes. With this move, the government will make an effort to curb the growing incidence of lifestyle diseases like diabetes and obesity.

The proposal was made by the group of secretaries on health, sanitation and urban development in a recent meeting with PM Narendra Modi to discuss budget proposals. The group has also suggested that proceeds from such higher taxes be used to increase the government's spending on health.

"In our presentation to the PM, we suggested higher taxes on junk food and sugary beverages because consumption of such products is growing fast and fuelling several lifestyle diseases like obesity, diabetes and heart disorders. We have also suggested that revenue earned from such tax be invested in health schemes," a member of the group, told ET.

The proposal for higher taxes on such products has been in the pipeline since April last year. The government had also constituted an inter-ministerial committee headed by the health secretary to deliberate on the proposal to impose stringent measures including higher taxes and restrictions on endorsements and advertisements of such products on TV, mainly during prime time .

"The FSSAI (Food Safety and Standards Authority of India) is already working on mechanisms to regulate consumption of junk food. This is crucial given the growing disease burden in India," health secretary CK Mishratold ET.