Apex court ban on firecracker sale burns industry

While for some this Diwali will be free of noise and smoke, for others such as Harjeet Singh and more than 1,000 big and small business owners in the capital, this festive season will be quite dark.
 
Left dumbfounded by the Supreme Court’s sudden ban on the sale of firecrackers in Delhi and the National Capital Region (NCR), Singh and several firecracker sellers like him have lost all hope of recovering their money.
 
On Monday, the court said its order of last November banning the sale of firecrackers in Delhi-NCR would continue till October 31. The court said its September 12 order temporarily lifting the stay and permitting the sale of firecrackers would be effective till November 1. Diwali is on October 19 and the order effectively means that no firecrackers will be available for purchase before the festival. Referring to the air pollution levels in Delhi-NCR during and immediately after Diwali last year, the apex court observed that due to the burning of firecrackers, "the air quality deteriorates abysmally and alarmingly and the city chokes thereby". The top court observed that the adverse effects of firecrackers during Diwali have been witnessed year after year and last year, it had led to the closing of schools in Delhi.

 

The court said further orders on this issue can be passed after assessing the situation after this Diwali.
 
In the heart of one of the largest wholesale markets in the country, New Delhi’s Sadar Bazaar, more than 1,000 people involved with the firecracker industry are looking at loss of seasonal business as well as revenue of more than Rs 700 crore. The firecrackers market in Delhi-NCR is Rs 2,000 crore.
 
Singh, who had last week applied for a licence to sell firecrackers during the festive season, is staring at a financial loss of more than Rs 6 lakh. But that is not his biggest concern. He does not know how to dispose his cracker stockpile. “Why did the police issue us licences in the first place? Now what will I do with the tonnes of crackers I have at my shop? I cannot even sell them to a supplier in another city as transporting them is banned,” said Singh, also the general secretary of the Sadar Bazaar Fireworks Association.

 
Firecracker retailers and wholesalers are likely to challenge the court decision in the next few days. “If nothing works out, we will throw all the firecrackers in the streets of the city. This is not how the judiciary should handle things. We have made investments here. They should have brought in a ban after Diwali for the next year’s festive season,” said Raman Handa, another fireworks seller in the area.
 
According to industry estimates, around 2,500 shops sell firecrackers in Delhi-NCR during the season. There are around 250 big and small wholesalers in the city who control most of the supply to the northern region. Dealers in Punjab and Uttarakhand buy the bulk of firecrackers from the capital.

 
The verdict will also deal a death blow to the Rs 4,000-crore industry in Sivakasi, Tamil Nadu. If the sale ban was extended to other major cities, the industry would be choked, said manufacturers.
 
Sivakasi units had factored in the risk and produced only 50 per cent of capacity — Rs 2,000 crore worth of firecrackers were made. Even this might not reach consumers, said industry sources, as several states had not issued the temporary retail licences required to set up shops during the festive season. Sivakasi units have not distributed firecrackers to the NCR this year.
 

The industry is afraid that similar cases will be filed in other states, too, and a wider ban may shut down the industry for good. "We may have to stop production after this Diwali," said K Mariappan, general secretary of the Tamil Nadu Fireworks and Amorces Manufacturers Association. “Already, demonetisation and the higher goods and services tax (GST) rate of 28 per cent for firecrackers have taken a toll on the industry. If other states also go the Delhi way, we may as well shut down the industry.” The tax was 2 per cent earlier for manufacturers and 12.5 per cent for dealers.

 
Around 800,000 jobs are created — 500,000 of which are indirect — during the season in Tamil Nadu. This number goes up to 8 million across the country.
 
There are 821 firecracker units in Virudhunagar district, Tamil Nadu. Sivakasi is the main hub in the district, which caters to around 80 per cent of the market. About 80 per cent of the sale happens on Diwali. Weddings and other festivals such as Christmas and New Year are the other sale avenues, according to Mariappan.
 
With inputs from PTI