Thursday, May 14, 2009

CORPORATE INCENTIVES FOR IMPROVED PUBLIC HEATH



More or less all agree that the health crisis facing the world to day is brought about by uncontrolled consumerism, thoughtless product expansion favoring obesity and CVD and mindless life style changes consequent to plenty of money in the hands of the consumers who do not exercise discretion in choosing foods that are good for them. From food industry's perspectives, the portfolio of products offered by them is based on their "saleability", not their health boosting ability and invariably these products have excellent organoleptic profiles liked and craved for by a majority of the consumers. It is true that a healthy product can never be as appealing as those rich in fat, sugar, carbohydrates, functional additives, natural or synthetic and made by not necessarily optimum processing conditions from health angle. A 100% nutritionally literate population can only demand healthy foods and the world is no where near that target yet. Most consumers are unaware of the consequences of over eating and eating of foods with 'empty' calories and they indulge in such foods for the sake of palate satisfaction. Under these conditions is it inevitable that world is left to its fate while those who have the wherewithal to arrest the trend ignore the writing on the wall non-chalantly?

Many nations do spend enormous money in supporting food programs that subsidize or offer free nutritionally balanced foods at least once in a day to stave off hunger and promote nutrition amongst some segments of vulnerable population. How far they serve the purpose is another matter. More over can a government take up the whole responsibility to protect the health of its entire population through bureaucratic muddles for which it is notorious? While supportive programs are useful when paid for by the taxpayer directly through the government for the benefits of most vulnerable population, who is going to "guide" the eating habits of well- to- do consumers? No matter how much voluntary efforts are channeled to promote consumption of' 'well-being' products, the impact is not likely to be dramatic. In India the food industry floated the grandiose organization called Protein Foods and Nutrient Development Association in sixties with the objective of promoting nutrition in a big way but very little has happened during the last 4 decades of its existence. In stead of resolving to voluntarily to manufacture 'well-being' products for the Indian consumers, the Association went for the all too familiar "seminar, workshop and symposium" mode for promoting the concepts for which there were no takers even amongst their own members!

It is in this context that one must admire the new initiative coming from the law makers of the US who wanted the industry to be roped in to promote well-being of, at least, its own employees. Taxation is a powerful tool in the hands of the governments to make or break the industry and it is unfortunate that many third world countries use taxation as a means of collecting revenues for profligate spending on non-productive activities. Under the new administrative dispensation in the US, a move is afoot to enact legislation that will give significant tax breaks to the industry if it promotes health and well-being amongst its employees. At present any welfare scheme promoted by an industry is not recognized by the government as bonafide expenditure in the balance sheet and the recipients will have to pay income tax on such special allowances. Thus if a particular industry reimburses to its employees expenditure on buying regularly healthy and nutritious foods, such payments are considered as part of the salary attracting taxes at the individual level. Under the proposed Bill being considered in the US these payments can be shown as valid corporate expenditure admissible for tax computation. Probably the US cannot delay such welfare schemes for long as its population is on the brink of a dangerous implosion of epidemic nature, caused by obesity, CVD, hypertension, diabetes, cancer and similar life style diseases.

Do we learn any lesson from the experience of this affluent country? Lulling ourselves into a false sense of comfort through garbled statistics which says we are far behind other countries as far these diseases are concerned, is a short sighted policy that can put our country in great peril in the coming years. Our taxation policy is most regressive and even food is not spared by both state and central governments as most of the processed foods attract one or the other tax making them dearer to the consumer. Repeated pleas during the last 6 decades by the industry and consumer groups to declare the food industry as a "zero tax" industry have fallen on deaf ears and how can we expect these governments to think in terms of a pro-active taxation policy to promote healthy foods? In stead of looking for luxury foods to slap taxes, it may be a better strategy to grade the foods based on their health protecting quality and besides exempting from all taxes, additional financial incentives should be offered for marketing such products. Dairy foods, low fat, low sugar and low salt products, high protein foods, nutritionally balanced products and others with stress on health must be exempted from the taxation net, irrespective of who buys them.

At the Corporate level the industry must be encouraged to put in place eateries exclusively for their employees manned by dietitians and nutrition consultants, enlist a product portfolio available in the market that are considered specialty health products and identify people with good health for special pay based on acceptable national health parameters like body mass index, effective control of illnesses, good dietary habits, regular health check ups etc. Such employees can be paid ex-gratia health allowance, all expenditures allowed as genuine corporate expenditure eligible for IT deduction.



V.H.POTTY
http://vhpotty.blogspot.com/

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