29th April 2014

Courtesy: Business Standard

Adding to the burden

The changes in the fee structure have stumped the owners of the firecracker factories in Sivakasi. "We really dont know what to do and are surprised that the government has done something like this," says a senior industry representative. The Rs 3,000-crore business is labour intensive, and plagued by health and fire hazards. It has also been criticised in the past for being reliant on child labour. The industry was only now starting to modernise and install safety measures and induct safer technology. The additional costs under the new notification will now put further financial pressure on the manufacturing units.

As it is, Sivakasi is already wary of competition from China, the world-s largest producer of fireworks. According to Mariappan, last year around Rs 300 crore worth of firecrackers, most of them of the aerial type, were imported from China. He says, "We have received information that more orders have been placed this year by sellers and the import is expected to double."

The ministry of home affairs had written to all state governments in 2013, highlighting the dangers of smuggled Chinese fireworks that contain potassium chlorate, a compound banned in India, and the need to deal strictly with people found in possession of such fireworks.

TANFAMA was content that such a guideline would help protect it from the onslaught of the Chinese products. But the March 20 "User Fee Notice" was a bolt out of the blue. However, more than the increase in the rates, what alarmed the industry was the inclusion in the notice of the fee for an import licence for Class 7 explosives, that is, fireworks. This raised suspicions that the Petroleum and Explosives Safety Organisation, or PESO, which has so far never granted import licences for incendiaries, would now change tack. In its representations to the government, the fireworks industry has expressed apprehension that a new post has been created in the Nagpur office of PESO to process the applications for import and export of explosives and fireworks.

Ruing that the Explosives Act makes no distinction between explosives and fireworks, the industry has also demanded a separate set of rules to govern fireworks since the current legal guidelines are meant to govern high explosives and are, therefore, too stringent for fireworks.

Because China allows certain cheap chemicals, like potassium chlorate, for use in pyrotechnics there, the cost of production is low, unlike in India where the use of such raw materials is banned. "Chinese firecrackers are cheaper than Indian products, but they use hazardous compounds," says Siva Balan of Pooja Fireworks.

To check the flow of the Chinese products into the country, the industry has appealed to both Anand Sharma, Union commerce and industry minister, and EM Sudarsana Natchiappan, minister of state for commerce and industry, stressing the need to issue a public notice warning of punishment under Section 9B (1) of the Explosives Act to anybody trying to import, store and sell foreign fireworks.

TANFAMA will now have to wait for the elections to be over for any step regarding the withdrawal of the notification. Ironically, on May 16, when the poll results are announced, the victory of the winning candidates will be greeted, as usual, by the bursting of firecrackers. These will have been made, in all likelihood, in Sivakasi.