SC ban on crackers in New Delhi sees Sivakasi's business hopes going up in smoke

First Published 10, Oct 2017, 4:24 PM IST
SC ban on crackers in New Delhi sees Sivakasis business hopes going up in smoke
Highlights
  • This will see a loss of almost 20 to 25% of the Rs 4,000 crore business in the cracker industry.
  • In Delhi alone, there are 450 permanent licence holders in addition to 1,000 temporary licences issued by the district magistrate.
  • Dealers also have to cope with the 28% GST slab, apart from the ban.

The firecracker ban came as a last-moment decision by the Supreme Court, which stares at a significant business loss in Tamil Nadu. Barely 10 days ahead of Diwali, the SC's ban on firecrackers in New Delhi came as a blow to the fireworks industry in Sivakasi, which is the main hub of buying and selling of crackers in India. 

According to the court order, sale of fireworks in Delhi and the National Capital Region has been banned till November 1. This will see a loss of almost 20 to 25% of the Rs 4,000 crore business in the industry, according to a report by the Times of India.  

The issue has been snowballing since last year alone, believe the firecracker suppliers in Sivakasi. Last year's pollution levels in New Delhi post-Diwali is still etched in the memories of the citizens, who are now reluctant to burn fire crackers for their own health. The government too is hesitant to let the same situation repeat this year. Thus, manufacturers point out that ever since the court banned fireworks in Delhi on November 11, 2016, supplies from Sivakasi to the Delhi market has taken a hit. P Ganesan of Sony Fireworks, said, "We could not send Rs 25 crore worth of fireworks meant for supply to the Delhi market."

However, that is not all. The order will also effect permanent and temporary dealers who are sitting on the stock piles from the previous year. For instance, Rajiv Jain, a major fireworks dealer in New Delhi said, "In Delhi alone, there are 450 permanent licence holders in addition to 1,000 temporary licences issued by the district magistrate."

He further added, "Within 27 days, Supreme Court has banned the sales suspending these licences with immediate effect. Without licences, we can neither transport nor return the stock to Sivakasi. We are sitting on a huge pile of unsold fireworks worth several crores of rupees."

The GST effect and other factors add to the woes

Tthe fireworks industry is already reeling under the effects of 28% GST, the highest slab.  A Asaithambi, president of Tamil Nadu Fireworks and Amorces Manufacturers Association, speaking to the TOI said, "we don't know how the dealers are going to react in the coming days."

That is not all. The industry is also affected by demonetisation, in addition to erosion of the local market due to consistent drought-like conditions. Illegal Chinese fireworks entering the Indian market is another reason to worry for the firecracker industry. This has already led to considerable downsizing. 

Small time dealers at a loss

Diwali is the only time when small-time dealers make some money. The ban is a huge setback since these dealers have already invested heavily on license and infrastructure. A dealer, Jaikishan said, "This is the time we make some money selling fireworks but the ban has put us in serious trouble and we don't know how to overcome it." 

Firecracker dealers opine that pollution in Delhi is not caused by firecrackers alone, but also smoke from automobiles. However, it is only the former that is at the receiving end. 

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