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India’s Southern Kerala State Imposes 'Fat Tax' on Fast Food

  • Anjana Pasricha

Fast food joints like McDonalds and Pizza Hut are a popular stop for Indians and is ramping up its presence in the country.

Fast food joints like McDonalds and Pizza Hut are a popular stop for Indians and is ramping up its presence in the country.

Customers in India’s southern state of Kerala will have to dig deeper into their pockets each time they want to order a juicy burger, a cheese-laced pizza or other fast food such as doughnuts and tacos.

Vowing to combat rising levels of obesity—Kerala has the second highest levels of obesity in the country—the state government is imposing a 14.5 percent "fat tax" on fast goods sold by branded restaurants such as McDonalds and Pizza Hut.

India's first 'fat tax'

Thomas Isaac, Kerala’s finance minister, says he took the cue from a handful of countries that have experimented with similar taxes.

Fast food joints like McDonalds and Pizza Hut are a popular stop for Indians and is ramping up its presence in the country.

Fast food joints like McDonalds and Pizza Hut are a popular stop for Indians and is ramping up its presence in the country.

India’s first such tax in the scenic, coastal state will only affect a small section of the country’s increasingly affluent middle class, whose appetite for Western-style fast food has grown over the last decade-and-a-half. The measure has attracted national attention as India confronts growing levels of obesity.

Critics question if it will actually deter people from getting their fix of junk food, and skeptics suspect it is probably meant to garner more revenue. Doctors and nutritionists, however, say it is a long overdue first step in that the country urgently needs to address its expanding waistlines.

Addressing obesity

With half of Indians under 25, worries center on young people in particular.

Anoop Misra, who heads the Center for Diabetes, Obesity and Cholesterol at Fortis Hospital in New Delhi, has watched with rising alarm as more and more people in their 20's and 30's walk into his clinic.

Strongly supporting the Kerala initiative, the doctor says, “We used to see diabetes 20 years back, diabetes in 50 or 40 years of age. Now we are seeing diabetes at 15 years of age, 18 years of age.” Misra says he hopes the rest of the country will take the cue from the state’s fat tax.

Global brands such as Pizza Hut, KFC and McDonald's have been ramping up their presence as the Indian fast food market grows exponentially while others such as Johnny Rockets, Burger King, Wendy’s and Barcelos have begun making forays. Fast food chains have not commented on the tax so far.

I-T engineer Gaurav Singh wants the government to focus on education and awareness instead of taxing fast food.

I-T engineer Gaurav Singh wants the government to focus on education and awareness instead of taxing fast food.

Money making initiative

The Kerala government has rejected suggestions that the tax aims to shore up its revenue, saying collections from such a tax will be small. Fast food outlets have a relatively small presence in the southern state compared to the north and the west.

Minister Isaac, who proposed the tax, says he simply sees it as a signal to move back to traditional healthy eating, a practice he says is “going out of fashion.”

While acknowledging the need to target unhealthy food, many in Kerala point to local, deep-fried, highly popular local snacks and foods that are often sold at wayside stalls and restaurants. The owner of a café in Kerala’s Kochi city, Isaac Alexander, says the format does not seem fair as it excludes such food.

“One food that is eaten widely in Kerala is the “paratha.” It is high in fat, high in refined flour; it is cheap," he said. "It can't be taxed because it is highly unorganized,” he said.

Raising awareness, not taxing

Doctors and nutritionists agree that the tax needs to target a range of Indian snacks rich in trans fats that are sold throughout the country often on wayside stalls, as well as sugary drinks.

“Is it enough? I don’t think so. We need to go much beyond the burgers and the doughnuts and the French fries,” says Sheela Krishnaswamy, a nutritionist who heads the Indian Dietetic Association in Bangalore. “It needs to be done more scientifically. It needs to be done at what percentage of fat in a food can the fat tax begin.”

Vijay Deoli sees no harms in an occasional outing with his family to have a burger.

Vijay Deoli sees no harms in an occasional outing with his family to have a burger.

A customer in New Delhi who is enjoying burgers with his family does not agree. Vijay Deoli says governments should focus on more urgent priorities like pollution.

“First you have to clear up the air, the water; many things are there," he said. "This is a small thing.”

Others say the government should focus more on raising awareness about fast food instead of using taxes to influence people’s choices.

“If you go by even developed countries, nowadays teachers or classrooms — they are training people, what should be eaten, and what should not be eaten,” says IT engineer Gaurav Singh.

Denmark, for example, scrapped a fat tax when it found that customers were picking up their quota of high fat goods from other countries.

Health experts agree that raising awareness is critical; but, Dr. Misra feels that education alone is not doing the trick.

“As I see every day, people, they are well aware of what is good and what is bad, they will [still] most of the time veer towards bad eating,” he said.

He compares the fat tax to a seatbelt law imposed some years back to force people to use seatbelts. “Everybody has a seatbelt. Previously nobody was wearing that, because there is a fine. So a certain amount of regulation has to be brought in to change the habits of the people.”

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