The combined impact of the 28% Goods and Services Tax (GST) and the campaign to make Deepavali a festival of light devoid of smoke and noise pollution has muted the sale of crackers in Mysuru.
Ahead of the Balipadyami slated for Friday, which is the big day of the three-day festival, traders engaged in the firecracker business were not optimistic about brisk sales. Wednesday and Thursday saw less-than-encouraging turnover for them.
“Firecrackers have a GST of 28% and this is one of the reasons for the relatively muted sales,” said Vijaykumar, a licensed trader who has set up shop at JK Grounds.
Another trader, who procured his merchandise from Sivakasi, said: “After two days, we have made sales of only about ₹50,000, as against the investment of ₹5 lakh. There is only one more day left.”
The 10-15% rise in costs, which happens every year because of inflationary trends, coupled with the GST of 28% has made crackers expensive. The other reason for poor sales is the growing environmental consciousness among people, particularly members of the new generation.
Suchaksh of Jupiter Crackers, whose family has been in the cracker business for generations, said sales are down by 50%. In fact, he said, some gift boxes are being sold at throwaway prices. “The 13-item box was being sold at a discounted cost of ₹100 this year, as opposed to ₹180 last year, and yet they have remained unsold,” he said.
Effect of NCR ban?
On Thursday evening, there were signs of sales picking up very slowly. Pankaja Suresh, another trader, said there is no mad rush for purchase, as was the case years ago. She attributed this partly to the recent Supreme Court ban on sale of crackers in the National Capital Region. “Though the ban is confined to Delhi, it has created a negative effect on the public,” she said.
There are nearly 60 licensed traders engaged in the sale of firecrackers in the city. The cost of procuring one truck load of crackers is ₹30,000. Besides, the traders have to pay ₹1 lakh as licence fee.
The bulk of the crackers are procured from Sivakasi in Tamil Nadu and, contrary to the popular belief promoted on social media, there is no trace of firecrackers from China.
Given the discouraging sales, a majority of the traders intend to dispose of their merchandise by cutting their losses. As such, even a 3-5% profit margin will be a dream for them.
Govt. stance flayed
Firecracker traders are in the doldrums over the muted sales — which they estimate to have fallen by 50% or so — this Deepavali season. But they are also cut up with the government for its “contradictory stance” on the business.
“First they invite tenders to establish shops and ask us to deposit ₹1 lakh as a non-refundable licence fee. Then they place advertisements in newspapers against the bursting of crackers,” said Pankaja Suresh, a trader at JK Grounds. “Didn’t the government know of the environmental implications of bursting crackers when it invited tenders for setting up licensed shops?”
The situation became tense on Wednesday when M.K. Somashekar, MLA, and his followers got embroiled in an argument over the issue. “Return our deposit fee and we will close down the shops,” said a licensed trader, one of the many desperate to cut their losses.
