Finance Minister's Speech in Parliament: Is GST on Beedi Really Hurting Workers?

Finance Minister Nirmala Sitharaman clarified that there is no change in the tax incidence on beedi. Previously, beedi fell 28% slab under GST for demerit goods (like tobacco), which included a compensation cess. With recent GST reforms, the GST rate on beedis was reduced from 28% to 18%.

The GST Council deliberately kept beedi at 18% instead of 40% to avoid excessive hikes that could harm workers, despite health rationale for higher rates, countering public criticism that the government "reduced" beedi taxes.​​

Now, reverting to excise duty matches pre-GST levels exactly - not a single paisa more - ensuring no job losses for bidi makers while maintaining revenue stability as the cess phases out.

Under the returning excise regime, taxes match earlier levels - NCCD of Rs 1 per 1,000 handmade bidi units (Rs 2 for machine-made), plus nominal basic excise duty of 5 paise per 1,000 units (10 paise for machine-made), resulting in no paisa increase overall. She refutes claims of job losses, emphasizing unchanged rates ensure employment continuity for poor bidi workers.​

Welfare Measures for Bidi Workers

The Labour Welfare Scheme for beedi workers has three components - Health, Scholarship and Housing. The details are as follows:

Health: Health care facilities are provided through 10 hospitals and 279 dispensaries. Reimbursement is available for specialised treatments such as cancer, tuberculosis, heart diseases, and kidney transplantation.

Scholarship: Financial assistance is provided for the education of children of beedi workers from Class I to college/university, ranging from Rs 1,000 to Rs 25,000 per student per annum depending on the class/course.

Housing: A subsidy of Rs 1.50 lakh per beneficiary is provided for the construction of pucca houses under the Revised Integrated Housing Scheme (RIHS) 2016. RIHS has been converged with the Pradhan Mantri Awas Yojana.

In addition to this, schemes such as the Public Distribution System, Deen Dayal Antyodaya Yojana, PM SVANidhi, PM Kaushal Vikas Yojana etc. also support the welfare of beedi workers.