A Former Smoker’s Letter to PM

Why is a Merchant of Death & Disease made RBI Director?


Mr. Manmohan Singh
Prime Minister of India
South Block, Raisina Hill
New Delhi-110001

Dear Mr. Prime Minister,

Sir, greetings and salutations. Recent developments lead me to believe that you are willing to take the bull by the horns to solve India’s problems. I wish to bring to your kind attention, Govt. of India’s large-scale participation in equity funding and management of the cigarette industry, particularly Indian Tobacco Company Limited (ITC). It is strange and perverse that six public sector insurance companies and Unit Trust of India are among the top 10 shareholders in ITC, a company that is single-handedly responsible for the premature death of 422 Indians per day, or 3 deaths every 10 minutes. This is comparable to many Bhopal gas tragedies every month. As ITC has 80% market share of the Indian cigarette market, 5.5 crore Indians who smoke ITC’s cigarettes suffer from progressive loss of heart and lung capacity, and cancer of the throat and lungs.

Allow me to introduce myself. My name is Deepak Kumar. I am an advocate and a retired Commissioner of Customs, Central Excise and Service Tax. I am a former smoker. Thanks to my lifelong fondness of ITC’s Wills cigarettes, my voicebox was stricken by cancer, and after surgery, I now breathe from a hole in my throat. To speak, I close the hole with my thumb and force air into an artificial voicebox. I need a checkup every quarter to ensure that the cancer has not resurfaced. Here is a photo taken last fortnight during my checkup:

Sir, there are thousands like me all over India. About 5.7% of our 121 crore population, i.e. 6.9 crore persons, smoke cigarettes of various brands. Studies conducted over a 40-year period have revealed that 41-50% of smokers die between the ages of 35 and 69 years, compared to only 20% of non-smokers. For cigarette smokers, the age by which half have died is 8-10 years less than for non-smokers. Cigarette smokers constitute 80-90% of all lung cancer cases.

Sir, you would hopefully agree that it is a personal insult to people like me that huge amounts of money gathered from the Indian public as insurance premiums, is utilized for supporting ITC, which is a disguised multinational company selling cigarettes to 80% of India’s smokers? A massive chunk of ITC’s equity is held by British American Tobacco (BAT) Plc, the world’s second-largest tobacco company after Philip Morris. (BAT currently holds the distinction of being the largest multinational corporation by value of equity held in Indian businesses.)

The top brass of public-sector insurance companies, including LIC’s chairman Mr. D K Mehrotra, are on ITC’s payroll. As independent directors of ITC, they take home Rs 6-10 lakhs per annum for applying their management knowhow and sphere of influence to protect the interests of a company that promotes smoking! A majority of ITC’s independent directors are deeply linked with Insurance Regulatory and Development Authority (IRDA), General Insurers’ (Public Sector) Association of India, National Insurance Academy and the Insurance Institute of India? (See highlighted portions on page 31, and also pg 18-23 of ITC’s 2012 annual report: )

Sir, showering privileges on Mr. Y C Deveshwar, chairman of Indian Tobacco Company (ITC) Limited, is like a slap in the face to people like me who are the victims of tobacco. I refer specifically to three honours:

1) Earlier this month, Govt. of India nominated Mr. Y C Deveshwar, chairman of Indian Tobacco Company (ITC) Limited, as a director on the Central Board of Directors of the Reserve Bank of India.

2) In January 2011, Govt. of India awarded Mr. Deveshwar the Padma Bhushan, one of the highest civilian awards.

3) In 2007, the year before my cancer was detected, Mr. Deveshwar received the FICCI Outstanding Vision Corporate Triple Impact Award at your esteemed hands. It seems this award was in recognition of ITC’s “corporate vision to promote sustainable and inclusive growth” and “innovation to forge unique business models that synergise long-term shareholder value enhancement with the super ordinate purpose of creating greater societal capital”. High words of praise for a company that prematurely kills and permanently damages the health of its 5.5 crore loyal customers! Mr. Prime Minister Sir, I am dismayed that you consented to hand over this award.

When I see the above photo, I cringe in pain and shame. I feel ashamed of my country’s government. Sir, surely you and your cabinet colleagues must be aware that the Indian cigarette industry (consisting of ITC, VST, Godfrey Philips and Golden Tobacco) earns profits of about Rs 10,000 crore per annum while more-than-doubling the mortality of 6.9 crore Indians who are its loyal customers? In 2012, ITC raked in Rs 7,191 crore in profits before tax. Mr Deveshwar personally took home about Rs 9.85 crore by way of salaries, perks and commissions for masterminding this activity. Since when did such merchants of death become our role models and heroes in India?

The myth has been meticulously created that ITC Limited, captained by Mr. Deveshwar since 1996, is no longer a cigarette company, but a company that is in FMCG goods and many other industries. But the facts are otherwise. ITC’s Annual Report released in end-July show that cigarettes are ITC’s raison d’etre — the only reason for its existence. The bulk of its revenues are coming from cigarettes, and they are rising sharply year on year, despite your increasing VAT and excise duties on cigarettes.

ITC’s other FMCG businesses such as biscuits, snack foods, garments, notebooks and personal care products made consolidated losses of Rs 215 crores. Rs 7,191 crore of pre-tax profits earned from sale of cigarettes, and a further Rs 936 crore earned from paperboard, packaging and specialty papers used in cigarettes, are the lion’s share of ITC’s total profits of Rs 9,168 crore. See pg 182 of the annual report.

Sir, since cigarettes cannot be advertized, items like Sun feast biscuits and Classmate notebooks give this diabolical company the means to promote the ITC brand to the whole generation of growing children, who can later become cigarette smokers. “The flagship brand ‘Classmate’ is India’s leading student notebook brand with a distribution footprint of over 75,000 stationery retail outlets across the country,” says the annual report.

Insurance companies abroad prescribe elaborate lab tests to verify whether self-proclaimed non-smokers are telling the truth. But such is not the case in India. Here, our public-sector insurance companies and their empanelled doctors follow a policy of “don’t-ask-don’t-tell”.

Why? Because Life Insurance Corporation, with 12% shareholding, is ITC’s biggest shareholder, second only to the promoters Tobacco Manufacturers India Ltd? Because the six public-sector insurance companies, plus Unit Trust of India, in the top ten shareholders, are together holding a massive 34% of ITC’s shares? (See page 39 and 40 of the annual report.)

Mr. Prime Minister Sir, the entire insurance industry appears to have been bought over and asked to keep mum while people like me are maimed and killed by the cigarette industry.

The bottom-line is: Merely imposing high rates of excise duty and VAT, and banning cigarette advertisements, is not enough. Just as Gutka and pan masala have been banned, tobacco in all forms should be banned. Further, please direct insurance companies, UTI and other institutional investors to divest their shares in the cigarette industry. Also, please direct the Reserve Bank to drop Mr. Deveshwar from their board of directors. A merchant of death must not be elevated to positions of power and influence in the government.

Yours sincerely,

Deepak Kumar


Copy to:
Dr. D Subbarao, Governor of Reserve Bank of India
J Hari Narayan, Chairman, Insurance Regulatory & Development Authority
D K Malhotra, Chairman, Life Insurance Corporation of India
Chairman, Unit Trust of India
Y C Deveshwar, Chairman of ITC


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