Economic Survey 2025 Suggests ‘Health Tax’ on Ultra Processed Foods

Economic Survey 2025 strictly recommends ‘health tax’ on ultra processed foods as they cause serious health concerns when consumed in long terms. 

What are Ultra-Processed Foods?

Ultra-processed foods (UPFs) include carbonated beverages, chips, wafers, cookies, chocolates, candies, fries, sweetened cereals, etc. These are high in calories, salt, sugar and low in nutrients which adversely affect human health. These UPFs are widely marketed as ‘predigested foods’ enhanced with attractive packaging, preservatives, and artificial flavoring which are misleading to the consumers.

Highlights of the Survey 

The survey highlighted the need for stricter regulations, urging the Food Safety and Standards Authority of India (FSSAI) to define ultra-processed foods (UPFs) clearly, enforce proper labeling, and enhance monitoring. A key proposal includes imposing higher health taxes on brands that promote these unhealthy products.  

The economic survey also recommends in launching awareness programs in schools and colleges to educate young consumers about the risks associated with UPFs. Moreover, it also calls for stricter monitoring of branded products to ensure they comply with labeling and marketing regulations. Penalizing misleading advertisements and that the UPFs must be banned from schools, hospitals, and public places was also recommended amending to the laws of consumer protection.

India’s Consumption of Ultra-Processed Foods

India’s consumption of ultra-processed foods (UPFs) has drastically increased, rising from $900 million in 2006 to over $37.9 billion in 2019, according to a 2023 WHO report. Between 2011 and 2021, the UPF segment in India saw a steady annual growth rate of 13.7%. The Household Consumption Expenditure Survey (HCES) 2022-23 reveals that nearly 10% of food budgets in both rural and urban areas are spent on processed foods and beverages.

Several countries around the world like Brazil, Canada, and the UK, have adopted strict labeling and marketing regulations to limit the consumption of UPFs. Other nations like Denmark and Mexico have imposed taxes on unhealthy foods.

The survey concludes that self-regulation alone has not been effective in reducing UPF consumption, highlighting the need for stricter policies in India.

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