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Beyond distributional considerations, these findings show that political hesitation is further shaped by concerns that excise simplification and higher effective tax burdens could incentivise shifts towards illicit cigarette production, which operates outside the excise system and offers higher profit margins

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Area under cultivation: Tobacco (Lakh Hectares) Source: Prepared by the author using data compiled from the Reserve Bank of India The Tobacco Boards stated interest in encouraging farmers to shift to alternative crops sits uneasily alongside the simultaneous strengthening of the tobacco economy

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