Tax on Junk Food in Kerala: Strengths, Limitations, and Challenges

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About this sample


Words: 1866 |

Pages: 4|

10 min read

Published: Aug 4, 2023

Words: 1866|Pages: 4|10 min read

Published: Aug 4, 2023

Table of contents

  1. Introduction
  2. Fat Tax Policy on Junk Food
  3. Strengths and Limitations of the Tax on Junk Food
  4. Challenges of the Fat Tax
  5. Conclusion
  6. References


Kerala has the second highest obesity rate in India after the Northern state of Punjab. (Shannawaz, 2018). The obesity rates in the develop countries are higher in the rural than in the urban areas. However, in South Asian countries like India, the obesity rates are higher in urban areas. (Misra,, 2019). This paper examines the fat tax policy in the Indian State of Kerala, considering the strengths and the limitations as well as, analyzing the main challenges on policy design. The paper is divided into three sections: Fat tax policy explains the junk food culture in Kerala, and its relation to the Indian sociocultural context, and it includes a section on strengths and limitations as well as the challenges on designing the tax on junk food policy.

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Fat Tax Policy on Junk Food

In India, the level of processed and packaged food and beverages are low, nevertheless, there is a rapid increase of sweet, salty snacks and edible oil on the rise which are of more concerns to public health. The Southern state of Kerala in India is the first state to impose a fat tax of 14.5% on junk food in 2016, and the revenue generated from the Fat tax is approximately €1.3 Million. (Doshi, 2016). The fat tax accounted only for fast food chains, such as McDonalds and Dominos etc. and not inclusive of local businesses regardless of the kind of food they catered. Due to high obesity rates in urban Kerala, the fat tax targeted middle-income households. (Kuriakose, 2016).

The intension of the fat tax was to make people concision of the food they ate and their food choices. (Misra,, 2019). It is also important to note that diet and physical activity in South Asia are often influenced by traditional and cultural beliefs. (p.7). For example, in India, being overweight signified wealth, and chubby babies are perceived as healthy. (p.2). Indian women, regardless of the socioeconomic status were reported to be more obese than men. Few reasons include, imbalance diet, sequential and additive postpartum weight gain, decrease in physical activity during period, and the cultural and social concerns regarding women and outdoor physical exercise. (p.5).

South Asians in general engage in lower level of physical activities than the West. This could be due to the lack of exercise facilities, environmental pollutions, and social and security reasons (for women). (p.6). Nonetheless, enforcing policies on food control and security is not enough as the lack of access and availability of unprocessed food stands as the key factor towards ending malnutrition in all forms. (Law,, 2019). Designing the policy based solely on the financial tool will not prove the intended goal of healthy eating within the community, therefore, an inclusion of informational campaigns on nutrients, calorie and physical activity as well as education on a balanced diet can prove the overall, fat tax policy a successful design. (Kuriakose, 2016).

The first step towards designing the policy is defining policy in relation to what policy means to policymakers and how it is going to effect and affect them in everyday practices. (Hills, 2003). The policymakers also need to recognize what skills and knowledge base is needed to implement the policy faithfully. (p.268). The three lens of policy design is prevalent in the Keralan Fat Tax. The partisan and the bias knowledge of the Keralan Ministry of finance's political knowledge agenda on the fat tax was to promote local business and to encourage people to stick to traditional food. (Doshi, 2016). (Head, 2008). Therefore, it is essential to take into account the strengths and the limitations of the Keralan fat tax.

Strengths and Limitations of the Tax on Junk Food

The fat tax policy was designed to reduced obesity rates in Kerala and implemented using nudge theory. (Kuriakose, 2016). For example, an additional sales tax like VAT, and calorie tax was put on junk food, and subsidies on healthy food like vegetables and fruits. (p.2). Additional nudges like information on the front label packaging and restricted marketing were also included. (p.2). The nudge theory acted on persuasion and motivation towards a certain incentive, in this case, the goal to a healthy diet. (Peter, 2013).

India’s food labeling system encourages people with information on the sources and the constituents of the processed food they eat. For example, it allowed diabetics and others suffering from cardiovascular implications to make informed choices as the Indian government nudged people to make the right choice for them. (Kumar, 2018).

Ideally, the implementation of a fat tax should include a nutritional and physical activity measures, especially since markets are unsuccessful in allocating healthy preferences on diet and activities. (Kuriakose, 2016). Fat tax was designed on the assumption that unhealthy eating habits are the cause of obesity whilst, overlooking other ailments such as genetic, nutritional and disorders. (p.2).

Kuriakose (2016) argued policy aimed at the health benefits work better than fat tax. For example, the Danish Fat tax failed to take under consideration the fact content and therefore, could not achieve the intended health benefits. However, Mexico's battle with obesity ran through a portfolio of policies that included both financial and informational intervention that resulted in reducing the consumption of junk food. (p.3). Therefore, implementing fat tax on junk food alone will not explain or reduce obesity rates. The need for thorough and systematic research is essential. (Head, 2008).

The high revenue collected from the fat tax can be directed towards informational and educational design and advocacy. The information campaign could be organized within village sectors with the involvement of the village headmen and the elders, because it gives the community a level of trust if the new information is coming from within the community. (Peter, 2013). Head (2013) argued that public information campaign is a simple persuasion tool. The face to face interaction, rather than creating awareness through media platform is a more effective technique to eliminate any barriers between the politicians and the people. (p.609). Similarly, McConnell (2010) claimed that engagement of stakeholders in dialogue could lead to a successful policy. In taking into account the successful tips on policy design, it is important to understand the challenges faced when designing the policy.

Challenges of the Fat Tax

Apart from generating massive revenues, fat tax is short lived. (Cornnelson,, 2014). For instance, the success of the Danish fat tax for a few weeks, pushed a huge influx of cross broader purchase on fatty food. (p.19). Contradictorily, for food processing companies, the fat tax played out as an advantage. Adopting strategic pricing, factories had changed the quality of processed food, even the healthier option using cheap ingredients in order to generate profits. (p.21).

Without a substitute, ideally a healthier option to compensate, consumers continued to lean onto junk food. For example, consumers reduced the consumption of other food, including healthy food to be able to afford junk food. This income-effect posed as another challenge while designing the fat tax policy. (p.20).

The challenges involved in the cross-price effects can reinforce substitution effects that could overall effect the fat tax. For example, the fat tax on sugar beverages may lead to a successful decline, however, the substitution effect can affect the decline of other complementary sugar products such as Indian desserts, or ice creams. (p.20). Fat tax and a compensation of subsidies on healthier food seems to be a good option, however, people seem to respond to losses far more than the positive response to what they are gaining. Subsided on healthier food options, may result in an increase in consumers’ disposable income to purchase junk food. (p. 21). This is an example of Peter’s (2013) hyperbolic discounting. The initial aim of policy design should include perceptiveness from other disciplines such as anthropology, behavioral economic to gain a better understanding of how people make choices on what, where, why, who and how they get their food. Due to the complexity of policy designs and issues involved, policy makers need to look beyond statistic and pie charts. (Cornnelson,, 2014). The criticism of implementing behavioral approach is, it is often seen as weak. Motivating to change mindsets and behavior might lead the government to shove, rather than nudge. (Peter, 2013).

There is a contradiction in the coordination (Peters, 2018) of policy design since, the technical approach to problem solving is designed by a narrow circle of dominant actors, in this case, male parliament members designing fat tax, when the obesity rates are highest in women. (Head, 2008). The rationality is evolved and highly embedded in the patriarchal system in India, and the cultural and the social beliefs of femininity hindered women's role in physical activities. (p.4). Policy design is likely to fail if individual misunderstand the policy and lack the knowledge to implement and interpret it. The lack educational resources on policy and implementation skills also posed as a challenge. (Hills, 2003).


The fat tax lacked scientific knowledge, as most of the evidence gathered was from the statistic on obesity and nutrient-health complication. It overlooked cross-disciplinary especially, in relation to behavioral sciences to understand the roots and the behaviorism of consumerism culture. The nudge theory is based on the notion that State know best, and that it directed the people towards what the State thought was the right way. (Peter, 2013). Any misunderstanding of consumerism behavior could backfire and lead to implementation gap in policy design. (Hills, 2009).

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Heavy consumers of junk food were less responsive towards the fat tax, however, it affected the ones who were light to moderate consumers. So, the overall, targeted group was unresponsive towards the increasing in prices. On the bright side, all the additional revenues from the fat tax can be redistributed towards educational programs and information campaigns on healthy eating and balanced diet. (p.19). A good balance of combination between revenue food tax as well as an informational portfolio on healthy and balanced diets is likely to generate a much better outcome, and a stronger policy design.


  1. Cornelsen, L., Green, R., Dangour, A., & Smith, R. (2014). Why fat taxes won't make us thin. Journal of public health, 37(1), 18-23.
  2. Doshi, V. (2016, July 20).Tax on Junk food in Kerala leaves Indians with a bitter taste. The Guardian. Retrieved from
  3. Head, B. (2008). Three Lenses of Evidence‐Based Policy. Australian Journal of Public Administration, 67(1), 1–11.
  4. Hill, H. (2003). Understanding Implementation: Street Level Bureaucrats Resources for Reform. Journal of Public Administration Research and Theory, 13(3), 265–282.
  5. Law, C. et al. (2019). Purchase trends of processed foods and beverages in urban India. Global Food Security, 23, 191-204.
  6. Kuriakose, F., & Iyer, D. (2016). Tax Landscape and Public Health: A Critical Examination of Fat Tax in Kerala, India. India (November 18, 2016).
  7. Kumar, A., & Kalra, S. (2018). The Berlin Declaration: Benchmark for India. Journal of The Association of Physicians of India, 66, 84.
  8. McConell, A. (2010). Policy Success, Policy Failure and Grey Areas In-Between. Journal of Public Policy, 30(3), 345–362.
  9. Misra, A., Jayawardena, R., & Anoop, S. (2019). Obesity in South Asia: Phenotype, Morbidities, and Mitigation. Current obesity reports, 8(1), 43-52.
  10. Peter, J. (2013). All tools are informational now: how information and persuasion define the tools of government. Policy and Politics, 41(4), 605–620.
  11. Peters, G. (2018).The challenge of policy coordination, Policy Design and Practice, 1(1), DOI: 10.1080/25741292.2018.1437946
  12. Shannawaz, M., & Arokiasamy, P. (2018). Overweight/Obesity: An Emerging Epidemic in India. Journal of Clinical & Diagnostic Research, 12(11).
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Tax on Junk Food in Kerala: Strengths, Limitations, and Challenges. (2023, August 04). GradesFixer. Retrieved December 5, 2023, from
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