Firecracker ban: Losses worth crores likely this Diwali season for manufacturers as multiple states ban bursting, sale of firecrackers

Manufacturers in Sivakasi town of Virudhunagar district in Tamil Nadu produce over 90 per cent of firecrackers in the country,

Ease of Doing Business for MSMEs: The firecracker manufacturers are again staring at uncertainty during the upcoming Diwali season as multiple state governments including Odisha, Rajasthan, Delhi have announced a ban on the sale and bursting of crackers. Haryana too has reportedly taken a similar move for all NCR districts. Ban on firecrackers is, in fact, among the Delhi government’s 10-point action plan against pollution. Now manufacturers in Sivakasi town of Virudhunagar district in Tamil Nadu, which produce over 90 per cent of firecrackers in the country, are expecting a loss of around Rs 500 crore this year due to the ban in these states. The sector is comprised of micro and small enterprises.

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“The production this year is only 50 per cent of last year. Around Rs 3,000-crore worth of firecrackers were produced in 2020 and this year it would be around Rs 1,500 crore. After the ban, the impact would be around Rs 500 crore losses. If the ban continues for the coming years, we wouldn’t have any definite policy to manufacture. We were not prepared for the ban from these states. Firecrackers create pollution in the mind of people and not much in reality,” Sivakasi-based T Kannan, Director, Sree Balaji Fireworks told Financial Express Online. Kannan is also the General Secretary of The Indian Fireworks Manufacturers Association.

The Supreme Court back in 2018 had allowed the sale of low polluting green crackers with permitted decibel limits and emission norms while refusing a blanket ban on crackers across the country. Late last month the apex court had reportedly issued notices to some firecracker manufacturers, based on a CBI report, for allegedly using banned chemicals to make crackers. The court had earlier banned barium salt for manufacturing firecrackers.

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“We are not supplying goods to dealers in these states as they already have stocks left from last year. Green crackers were permitted in 2018 and since then we have been manufacturing green crackers only. The ask was also to reduce the 2.5 particulate matter to 25 per cent in crackers while it is now already down to up to 30 per cent in crackers being made since then. So it is quite controlled now. We are continuing to manufacture crackers for the livelihood of over 8 lakh workers associated directly or indirectly with the firecracker industry,” Ganesan Panjurajan, Director, Vinayaka Sony Fireworks Group and President, Tamil Nadu Fireworks and Amorces Manufacturers Association told Financial Express Online.

Ajay Kumar, a firecracker trader in Delhi’s Sadar Bazar area, said he is still having stock worth Rs 5 lakh in his warehouse for the last two years and it might lose its impact and color if it remained unsold for the coming few years. “We purchase goods every season a few months in advance, store it in warehouses outside Delhi and stock it in shops during the season that runs up to the new year. Every year the ban comes up few weeks before Diwali despite green crackers being legal for sale. Now, what would I do with the stock? Would the government purchase it from us and compensate for the loss?” Kumar told Financial Express Online.