Kerala to Introduce ‘Fat Tax’: 14.5% to be Levied on Fast Food Chains like McDonald’s

The article refers to the Tax proposal on Fast Foods rich in fat and sugar by the Kerala State Government, India. The move is intended  to put restraint on the consumption of “Fat Foods” to check increasing obesity amongst the citizens – by making the foods expensive to discourage consumption.


Topics include Inelastic Demand, Addictive nature of goods, Demerit Goods, Market failure, Negative Externalities of Consumption.


Evaluation will cover advantages/effectiveness and disadvantages of taxation as a tool for Government Intervention, effectiveness of others tools like regulation and impact on the Consumers, Producers and Society in short term and long term.