25th October 2014

Diwali 2014: Firecracker industry faces R 200 crore loss even after 15-20% price rise

New Delhi: As the market sets itself for the light festival "Deepavali" the prices of firecrackers also marked an increase from 15-20 percent. But, Indias cracker industry could not find enough relief despite the price rise. The cyclonic storm in Andhra Pradesh, Odisha, Jammu & Kashmir are considered as the reason behind this. Also, due to weak monsoon the rural areas of the agricultural based states registered a decrease in demand.

In India the annual turnover of firecracker industry is Rs. 3,000 crore and are mostly the domestic units are located in Tamil Nadu. Nearly 80 per cent of countrys total crackers are manufactured in Sivakasi, Tamil Nadu and its surrounding villages. However, manufacturing of firecrackers whether legally or illegally in other parts of the country and with the increasing import from China is reducing the influence of Sivakasis production in the market.

V Murthy, Director Jubilient Cracker Private Limited talking to Money Bhaskar said that this year the firecracker industry has faced 35% less demand as compared to previous year. However, before diwali good demand for crackers was seen in some areas still Sivakasi fireworks industry could not gain much as the manufacturing was closed due to rain.

Sivakasi presently has 728 firecracker manufacturing units out of which 200 are bigger units.
The total turnover of the industry is Rs. 3000 crore.
The cracker industry provides employment to nearly 3 lakh people.
Of these, 1.75 million people are directly linked to the industry.
According to Narendra Gupta, President Fireworks and General Traders Welfare Association, Delhi due to expensive raw material the manufacturing cost of firecrackers has increased. That led to an increase in the price of firecrackers this year. The impact of the increase in prices is seen in the demand for crackers.

The floods in Jammu and Kashmir paralyzed the business of Rs. 60 crore. While in Andhra Pradesh and Odisha cyclone incurred a loss of Rs. 110 crore to the industry. The demand for crackers mainly comes from Bihar, Jharkhand, Uttar Pradesh, Maharashtra, Punjab and Gujarat.

Approximate State Turnover
Bihar Rs. 240 crore
Jharkhand 110 crore
Uttar Pradesh Rs. 190 crore
Maharashtra Rs. 180 crore
Punjab Rs. 160 crore