New Delhi: On World No Tobacco Day, CNN-IBN has accessed an RTI query that shows that government run firms have invested in companies like ITC and VST that depend majorly on tobacco for profits. This is in violation of an international treaty India signed in 2004. Anti-tobacco groups are questioning the nexus between the government and tobacco majors.
The documents show that the government-owned Life Insurance Corporation of India has invested in nearly a hundred crore shares (99,58,91,658 shares) in companies like ITC, VST Industries and DS Group. Tobacco products like cigarettes are a major source of revenue for these companies.
ITC's shareholder report of 2011 shows six of its top 10 shareholders are government agencies - LIC, New India Insurance, UTI, Gen Insurance Corporation of India, the Oriental Insurance Company and National Insurance Company Ltd.
It is a violation of the international treaty on tobacco control signed by India in 2004. The Framework Convention of Tob Control guidelines clearly state that the government is prohibited from investing in tobacco companies and from accepting donations from the industry.
ITC told CNN-IBN, "It will be erroneous, if not motivated, to consider ITC as a tobacco company given that nearly 57 per cent of its net segment revenue comes from non-cigarette businesses."
The government has admitted as much in this Rajya Sabha query. The Health Minister has also admitted that the treaty has been violated, and that there are other considerations at play.
Health Minister Ghulam Nabi Azad said, "The health ministry against any support to these areas but there are other ministries who like to mobilise the resources. They have their own interests, of course in the interest of the country also, their interest is to mobilise the resources. There is a double interest. On one side you are mobilising the resources through these units and on the other side, there is a bad impact on the health.
Anti-tobacco activists have been crying foul. Seema Gupta of VHAI said, "This is like two partners getting together against the public health. Obviously if the government is going to invest in ITC, it will favour ITC in a lot of its policies and programs and we see that all the time that the industry is interfering or blocking or weakening our legislations."
LIC said it was aware of the treaty. It said, "We have been gradually reducing our holding in respect of purely tobacco company that is VST Industries. In respect of ITC, it has diversified into FMCG, hotels, Agri Business, Paper boards and packaging etc. The revenue for non cigarette segments is more than 45 per cent."
Meanwhile, at least one million Indians die due to tobacco use each year.