HAVANA, Aug. 26 (UPI) -- Cuba will end its monthly handouts of subsidized cigarettes to 2.5 million people as part of a plan to modernize the economy, the government said.
Cuba's Council of Ministers, the country's highest-ranking executive and administrative body, "resolved to eliminate cigarettes from the rationed family basket as of September as part of the measures gradually being adopted to limit state subsidies," the government said in a statement.
Cigarettes "are not a primary necessity," the statement said.
The change affects Cubans born before 1956, who had received four packs of cigarettes a month for about 16 cents, or 4 cents a pack, "way below cost," the Havana Times reported.
Cigarettes normally sell for about 32 cents a pack at state stores.
Cuban President Raul Castro said last month Cuba's ration system would eventually be eliminated so he could reduce government spending and modernize the Caribbean island country's economy.
Monthly allotments of chickpeas, potatoes and sugar have already ended.
The moves are widely seen as a decision by Castro, who took over from his ailing older brother Fidel Castro Feb. 24, 2008, to break with traditions that were cornerstones of communist life in Cuba for decades, Britain's Daily Telegraph said.
The subsidies are a remnant of the Soviet era, when Moscow subsidized Cuban goods and sheltered markets for its imports.
Havana now allows Cubans to build and make improvements to their own homes and permits private contractors such as taxi drivers to run their own businesses, the Telegraph said.
Raul Castro also ended a ban prohibiting Cubans from owning computers and cellphones and gave them the right to rent cars and spend nights in hotels previously accessible only to foreigners.
Use of the U.S. dollar in business is now legal and tourism is now encouraged.
Cuba's 11 million people still get free healthcare, education and social security.