29th April 2014

Courtesy: Business Standard

Sivakasi wants firepower to fight China rockets

Between April 7 and 16, the town of Sivakasi in Tamil Nadu wore a deserted look. Those 10 days saw manufacturing units in the hub of India-s firecracker industry going on an indefinite strike to protest both the steep increase in the various charges related to manufacturing explosives and the government-s inability to slow the import of Chinese incendiaries into the country.

While the industry lost an estimated Rs 15 crore a day during the period, the strike had the desired result - the Union ministry of commerce and industry invited industry representatives for talks on Monday, just three days before Tamil Nadu goes to the polls on April 24. The protest over the "User Fees Notice (Explosives)" issued by the Department of Industrial Policy and Promotion was withdrawn temporarily by the industry body, the Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA).

At the meeting, officials of the Department of Industrial Policy and Promotion agreed to follow the old rules for the time being. They told TANFAMA representatives to wait till the elections were over and the model code of conduct was withdrawn for any permanent solution to their grievances over the new rules and enhanced fees.

A participant at the meeting felt that the final fate of the ministry-s notification, which according to him is ultra vires, lies with the courts. He said that it was likely the issue would be taken to court once elections are over.

Sivakasi and the villages in the Virudhunagar district of the state produce around 80 per cent of the country-s fireworks. Around 300,000 people are engaged in the manufacture of firecrackers. On March 20, they were in for a shock when the steep revision of various fees was notified. The annual fee levied on storage of fireworks up to 200 tonnes was raised from Rs 15,000 to Rs 4 lakh, an increase of over 25 times, while the charges for storage of lesser amounts went up to Rs 66,000. The cost of a four-month competency certificate mandatory for a foreman of a manufacturing unit also went up from Rs 100 to Rs 3,000.

"The department has also relaxed various taxes prescribed for different categories of crackers," alleges K Mariappan, vice-president, TANFAMA. "All these steps clearly show they are laying a strong foundation for the free inflow of Chinese imports.