The months from May to August are the busiest for fireworks manufacturers in Sivakasi, often known as “Little Japan” for its inimitable work force, as they produce and dispatch crackers for Diwali, the festival of light.
But, the once thriving industry is probably facing its worst Diwali, which falls in the first week of November this year, in terms of orders – manufacturers say there has been a steep fall of at least 30% to 50% in terms of advance orders from dealers, especially those from the Delhi-NCR region and other northern states.
Supreme Court banning sales of crackers in the Delhi-NCR region just ahead of 2017 Diwali and another case in the apex court seeking a blanket ban on sale of fireworks across India are some of the reasons that manufacturers cite for the crisis that is looming large in Sivakasi. With cases pending, dealers are not willing to take risk by buying crackers from the manufacturers.
Even as the industry is battling cases in the Supreme Court, the government has dropped a bombshell in the form of draft rules for issuance of licence to shops that sell fire crackers.
The draft rules, which are yet to be notified, say the premises that sell crackers shall have storage area not less than 9 square metres and not more than 12 metres for 100 kg and 12 square metres and not more than 20 square metres from 500 to 1,200 kg of fireworks. The draft rules also mandate that it should be a single storied independent building and maintain three metres open to sky clearance from any structure or building.
The industry has often been accused of not following due safety measures though it is accident-prone. However, manufacturers say they are not against implementation of safety rules, but only seek practical, not impractical, solutions.
“As if the existing problems are not enough, the Union Commerce and Industry Ministry has come out with draft rules for cracker shops that are practically not feasible. If the draft rules apply for existing shops as well, more than 90% of them will have to down their shutters. If dealers don’t buy our crackers, where do we go?” asked K Mariappan, Secretary, Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA).
A P Selvarajan, Director of Sri Kaliswari Fireworks Private Limited, wants to know why the government released the draft rules when cases regarding ban on fire crackers are pending before the Supreme Court.
“What is the need to release draft rules when the court is hearing cases. We are not against safety measures and in fact we have always complied with directives on safety angle. But to target us is unfair and the timing of the release of draft rules is wrong,” he told DH.
P Ganesan, Director of Sony Fire Works, which is the market leader in fancy fire crackers, says the industry has never opposed implementation of safety rules.
“We are not against the rules. We only ask the government to make rules that are implementable. The new rules cannot be enforced in cities like Mumbai and Delhi. If all cracker shops are relocated to outside the cities, how would people go and buy them?” he asked.
Selvarajan adds if the draft rules are enforced, it would lead to a steady decrease in the sale of crackers as those living in the cities will not take the risk of travelling several kilometres just to buy fireworks.
Though orders for marriage, new year and other functions where crackers are used saw a marginal increase, the advance orders and payments for Diwali that keep the industry going is largely missing this year. The Rs 6,000 crore industry, which supplies 90% of the country’s fire crackers, largely depends on advance payments from dealers to begin production for the next festival season.
With the absence of such payments, many manufacturers have increased their working capital by borrowing from banks and other means to produce fire crackers for Diwali.
“But there are no takers for the fire crackers. No dealer wants to buy them since there is a general apprehension that the Supreme Court might spring a surprise just ahead of Diwali this year as well. Almost 90% of the goods that my firm produced at our own risk are still lying in our godowns,” Mariappan said.
He also said that the orders for Diwali stopped last October. “There were no specific orders for Diwali season,” Mariappan said.
However, Ganesan of Sony Fire Works says he has received many orders for Diwali, but is apprehensive of the fact whether the dealers will take them without a clarity on whether the court will allow or ban sale of crackers.
“The problem is dealers are not ready to buy goods from us. They can’t buy and store it in cities. Though I am hopeful that all-India ban is not feasible, we expect the court to make its stand clear as soon as possible,” he said.
The ban on sale of crackers in Delhi-NCR last year resulted in losses for several manufacturers who hold their fort in the region. Selvarajan, whose Kaliswari Fireworks sells crackers under ‘Cock’ brand, would lose 10% of its share if the ban in the NCR continues.
“If the ban on sale of crackers include Punjab and Haryana, we might lose 25% of our market,” Selvarajan said.
‘Government should step in’
Insiders feel that the industry is being targeted for no reason and false allegations that crackers are the only reason for Delhi’s pollution and air pollution in general are hurting the sector, which provides direct and indirect employment to 8 lakh people.
While acknowledging the “serious efforts” by Defence Minister Nirmala Sitharaman for banning Chinese crackers and taking steps to help the industry, manufacturers feel that the governments in Chennai and New Delhi were not doing enough to mitigate the crisis. They said despite Nirmala exerting pressure on the concerned in the government, the Centre is yet to file an affidavit in the Supreme Court spelling its stand.
“This shows that the government is not interested in helping us. We have met Commerce and Industry Minister Suresh Prabhu and Environment Minister Dr Harsh Vardhan thrice each. But our problems only compound with each passing day. We just want the SC to take a view soon,” P C A Asaithambi, President of TANFAMA, told DH.
T Kannan of Sree Balaji Fire Works Industries went a step ahead and called the attempts to ban fire crackers as an attack on “our culture.”
“Can anyone prove that fire crackers are the only reason for air pollution in Delhi? There are so many reasons, but everyone loves to target us. The Supreme Court cases have been a headache for us for the past few years. If at all a ban is enforced, we will
view it only as an attack on our culture,” he said.
Kannan and Mariappan appealed to the Centre to “hand-hold” the industry to ensure that it thrives.
Abolition of check posts
Post-GST, manufacturers say, unethical practices have increased in Sivakasi with many small-time firms suppressing value of goods by one sixth to one fourth of actual value, abnormal discount and manufacture of fireworks beyond permitted limits.
“With all check posts at the border of states abolished after GST, malpractices have increased,” Kannan said.