Health Minister Harsh Vardhan's proposal to the finance ministry on increasing taxes on tobacco products in the upcoming budget was Wednesday welcomed by various health groups, who said the increase in taxes will help in safeguarding the health of the people.

Harsh Vardhan recently wrote to Finance Minister Arun Jaitley for an increase in tax on the retail price of cigarettes from 45 percent to 60 percent in the union budget to be presented in parliament July 10.

"Raising taxes on tobacco products is the single-most effective way to reduce tobacco use and save lives in India. All tobacco products in India are under-taxed," said Bhavna Mukhopadhyay of the Voluntary Health Association of India (VHAI), welcoming the move of the health minister.

She said that increasing taxes means increase in revenue, reduction in consumption and saving of lives. It will also reduce the state's burden of treatment cost.

The World Health Organisation (WHO) has recommended that the share of excise tax for tobacco products should be increased to 70 percent of the retail price.

"A tax increase that raises prices of tobacco products by 10 percent is estimated to reduce tobacco consumption by 4-5 percent. Essentially, as tax goes up, death and disease goes down. It is good for people's health and good for the economy," said Nata Menabde, WHO representative to India.

She said that raising taxes was one of the strongest weapons to fight tobacco and this was what the WHO Framework Convention on Tobacco Control mandates.

According to a combined study by the health ministry and WHO, it is estimated that the total economic costs attributable to tobacco use from all diseases in India in the year 2011 amounted to a staggering Rs.1,04,500 crore - 12 percent more than the combined state and central government expenditure on health care in the same year.

Pankaj Chaturvedi, head and neck surgeon at the Tata Memorial Hospital in Mumbai, says tobacco is the "cheapest poison in the market that getting cheaper every year".

"Tobacco taxes in India are not regularly adjusted for inflation, and over time tobacco products are becoming increasingly affordable, leading to one million deaths annually in India due to tobacco related diseases."

According to the Global Adult Tobacco Survey India (GATS) 2010, more than one-third (35 percent) of adults in India use tobacco in some form or the other.