Introduction
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Introduction "I like to think of fire held in a man's hand. Fire, a dangerous force, tamed at his fingertips. I often wonder about the hours when a man sits alone, watching the smoke of a cigarette, and thinking. I wonder what great things have come from such hours. When a man thinks, there is a spot of fire alive in his mind--and it is proper that he should have the burning point of a cigarette as his one expression." A cigarette is a product consumed via smoking and manufactured out of cured and finely cut tobacco leaves, which are combined with other additives, then rolled or stuffed into a paper-wrapped cylinder generally less than 120 mm in length and 10 mm in diameter. The cigarette is ignited at one end and allowed to smolder for the purpose of inhalation of its smoke from the other which is usually filtered at the end and is usually inserted in the mouth. They are sometimes smoked with a cigarette holder. The term cigarette as commonly used, refers to a tobacco cigarette but can apply to similar devices containing other herbs, such as cannabis. They are colloquially known as 'cigs', 'smokes', 'ciggies', 'straights', 'cancer sticks', 'death sticks', 'coffin nails' and 'fags'. Cigarettes are proven to be highly addictive, as well as a cause of multiple types of cancer, heart disease, respiratory disease, circulatory disease and birth defects. A cigarette is distinguished from a cigar by its smaller size, use of processed leaf, and white paper wrapping. Cigars are typically composed entirely of whole leaf tobacco. Commercially manufactured cigarettes are relatively simple objects consisting mainly of a tobacco blend, paper, PVA glue to bond the outer layer of paper together, and often also a cellulose acetate based filter. In the beginning of the 16th century, beggars in Seville, Spain developed the first paper-rolled cigarettes when they collected discarded cigar butts, shredded them, and rolled them in scraps of paper. Although the Spanish elite first dismissed them as recycled garbage, these cigarillos, or little cigars, eventually gained popularity during the 18th century. Cigarette smoking spread to Italy and Portugal, and eventually to the rest of Europe and into Asia. Cigarettes were largely unknown in the English-speaking world before the Crimean War, when British soldiers began emulating their Ottoman Turkish comrades, who resorted to rolling their tobacco with newsprint. The cigarette was named sometime in the 18th century. During World War I and World War II, cigarettes were rationed to soldiers. During the second half of the 20th century, the adverse health effects of cigarettes started to become widely known and text-only health warnings became commonplace on cigarette packets. The United States has not yet implemented graphics-based cigarette warning labels, which is considered a more effective method to communicate to the public the dangers of cigarette smoking. Canada and Australia, however, have both textual warnings and graphic visual images displaying, among other things, the damaging effects tobacco use has on the human body. The cigarette has evolved much since its conception; for example, the thin bands that travel transverse to the "axis of smoking" (thus forming circles along the length of the cigarette) are alternate sections of thin and thick paper to facilitate effective burning when being drawn, and retard burning when at rest. Synthetic particulate filters remove some of the tar before it reaches the smoker. Companies like Marlboro a brand of Cigarette made by Altria which started manufacturing cigarettes in 1924 gave advertisements that Marlboro is a „women‟s cigarette‟ based on the slogan “Mild as May”. It became the most popular brand of United States in 2001. Marlboro became so popular that its sales never came down in the States and earned huge revenues. It started giving sponsorship to motor sports and racing cars. It was the main sponsor for Ferrari Formula One car and Yamaha in Super Bike Racing. It became famous globally till 2003 through Ferrari when it won the world championship of Formula One Racing. In mid-2006, special "racing editions" of Marlboro Red were sold in the UK, with a Ferrari-inspired design, although the Ferrari name and badge were not used. Mostly people smoke cigarettes for pleasure or because of frustration or problem. Once they start they get addicted to it. It is very difficult to overcome the habit of smoking till one becomes used to it. In foreign countries most of the people started smoking cigarettes because of celebrities smoking in films and serials. This gave a boost to the cigarette manufacturing companies by increase in their sales and also promotion of the product as the demand increased. Most countries in the world have a legal smoking age of 18. Seven exceptions are Austria, Belgium, Denmark, Germany, Portugal, the United Kingdom, and The Netherlands, where the age is 16. Since January 1, 2007 all cigarette machines in public places in Germany must attempt to verify the customers age by requiring the insertion of a debit card. Turkey, which has one of the highest percentages of smokers in its population, has a legal age of 18. Another curiosity is Japan, one of the highest tobacco consuming nations, which requires purchasers to be 20 years of age. However, due to the prevalence of cigarette vending machines in the most public of places the effectiveness of an underage ban is in doubt. In other countries, such as Egypt or India (especially Kerala) it is legal to use and purchase tobacco products regardless of age. Approximately 5.5 trillion cigarettes are produced globally each year by the tobacco industry, smoked by over 1.1 billion people, which is more than 1/6 of the world's total population. Many governments impose restrictions on smoking tobacco, especially in public areas. The primary justification has been the negative health effects of secondhand smoke. Laws vary by country and locality. In India the ban on tobacco and cigarettes has been implied since 2002, but still the companies continue to manufacture cigarettes as the smoking habits of the consumers do not change. Through sponsorship these companies try to publish their brand name and promotion of their product. Cigarette advertisement is also done through movies where the celebrities smoke cigarettes in the film. This also helps in brand and sales promotion. The Indian government is trying hard to impose strict actions against these advertisements and promotion. Even though by imposing strict tax rate these companies are able to continue their business as 1.1 billion people of the world consume cigarettes. In many parts of the world tobacco advertising and even sponsorship of sporting events has been outlawed. The ban on tobacco advertising and sponsorship in the EU in 2005 has prompted Formula One Management to look for races in areas that allow the tobacco sponsored teams to display their livery. As of 2007, only Ferrari retains tobacco sponsorship, continuing their relationship with Marlboro until 2011. In spite of the ill effects and health hazards people continue to smoke cigarettes for pleasure or because of habit. This habitual of the people helps the companies to overcome the ban and advertisement on cigarettes and tobacco. About the cigarettes Industry of India The Cigarette Industry is one of the oldest industries in India. It is an important agro-based industry. It is highly labour intensive and provides livelihood to about five million people directly and indirectly. Cigarette is an item falling under the First Schedule to the Industries (Development & Regulation) Act, 1951 and requires an industrial license. The cigarette industry has always been on the receiving end when it comes to imposition of taxes and duties in the financial budget of the country. The industry has been reeling under ever-increasing excise duties and innovative form of taxes like luxury tax. Also, due to the high taxes in the country, the competitiveness of the Indian cigarette manufacture is adversely affected in the global market. Its growth is being further stifled by the imposition of ban on smoking at public places and ban on advertisements. In addition to this, increasing awareness about harmful effect of smoking and lawsuits in western countries has made the entire scenario pretty gloomy for the industry. This leads to increased government regulation and public litigation and a reduced ability to promote the product. In such a scenario, cigarette companies in India are going in for unrelated diversification. Also, with the increasing threat to the tobacco industry as a whole and decreased consumption levels of cigarettes, need gaps in the market are being met by new products like non-tobacco beedi, paan- (betel leaf) flavored tobacco-free gum lets , and substitutes and tobacco patches like ‘Click’ which are targeted at the traditional cigarette consumer base. At present, there are 19 units in the organized sector engaged in the manufacture of cigarettes with a total installed capacity of about 147.377 billion pieces per annum. The production of cigarettes during 2001-02 was 60577 million sticks. During the current year i.e. 2002-03 (April 2002 to December, 2002) the production has been 43198.20 million sticks. In terms of volume, bids dominate the Indian market for tobacco products. India is the second largest producer of tobacco in the world after China. It produced 572 million kilograms of tobacco in 2002-2003. India only holds a meager 0.7% share of the US$30 billion global Import-Export trade in Tobacco, with cigarettes/cigarette tobaccos accounting for 85% of the Country's total tobacco exports. The tobacco industry holds tremendous potential for India. For the government, it means excise duties and export revenues, and for the Country in general, it translates into huge employment opportunities.