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Another ‘Cracker’ NPA In The Making?
Representative image. (Allison Joyce/Getty Images)
The closure of firework factories in and around Sivakasi (in Tamil Nadu) is expected to create NPAs (Non-Performing Assets) in the banking sector, as reported by Business Standard. Banks, especially the PSBs (Public Sector Banks), will have to cover losses to the tune of Rs 16 Billion (Rs. 1,600 crores).
The Supreme Court in its 23 October judgement allowed for the sale of only ‘Green’ fireworks in Delhi/NCR. However, this is expected to put in jeopardy the livelihood of approximately 8 lakh workers supported by the cracker industry.
“We want to run the factory but cannot due to the court's order,” said E Mariappan of the Tamil Nadu Fireworks And Amorces Manufacturers Association (TANFAMA). He claimed that the sale of fireworks dropped by as much as 60 per cent following the SC order during Diwali. Thus, they are facing working capital shortages and are not able to repay their loans to the banks. “We fear whether we will be able to collect the money for whatever we have sold to the distributor.”
It should also be noted that the SC’s judgement left the vendors perplexed on what ‘Green’ crackers were and also, formulations for the same have not yet hit the markets.
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