Coasian Deepawali

Come Diwali, there seems to be an annual ritual over the last few years. It is about the ban of bursting crackers on the day of Deepawali. There seems to be a narrative that crackers are harmful to the environment and hence contribute to pollution. Given the rising pollution levels, it would be pertinent to reduce or rather stop bursting crackers as part of the individual efforts to curb the rise in pollution. While bursting crackers through their emissions are likely to create air pollution, there are others who contend the rise in noise or sound pollution. They contend bursting of crackers is harmful to ears. It also affects those who are ill or young kids. Some go the extent of bursting crackers affecting animals too. It is a different story that cracker bursting cause all these problems only on the day of Deepawali while no problems seem to be caused on other days of celebrations like celebrity marriages or New Year or even celebrations abroad for their different festive occasions. No doubt, this results in a sort of backlash often witnessed on social media by supporters of bursting crackers. What is interesting is the fact, that these debates or fights are concentrated in the run up to the festival of Deepawali. Deepawali minus crackers is almost like a Hamlet without the Crown Prince of Denmark. Therefore one needs to examine this issue at certain depth.

At the outset, the problem can be approached through the prism of Coasian economics. There are people who have a right to burst crackers. They have the inalienable right to do this. One cannot object to the same. Yet there are others who might be affected by bursting of the crackers. This segment could be people who are allergic to air pollution, patients who are suffering and thus their suffering aggravated by noise, kids who perhaps are affected among others. Therefore they too have a right to object to burst crackers. In the Coasian parlance, it has solved through negotiations. The ones bursting crackers must pay sufficient costs to cover up for the externalities they are creating for those who are affected by bursting crackers. At the same time, the alternative could be those who are allergic or affected by bursting crackers can compensate the willing so as to ensure the externalities are produced. Either way, there has to be a method of internalising the externalities. While this could be at one plane, there is another dimension. The question that arises is whether the ban is justified or not. Economics posits bans are never justified as they distort the markets and create avenues for parallel markets. These parallel markets result in revenue loss to the government through non-payment of taxes. Besides the government has to bear up the costs of enforcing the ban. The enforcement costs would have to be paid by the citizenry. Though  the costs would be diffused and hence not visible, nevertheless there are costs attached to the same.

Besides, the costs of enforcement, there also arises another Coasian problem of producers versus the ant-cracker lobby. The cracker production in India is a legal industry and they keep accepting the orders through the year. There is no doubt a strong spike during festivals like Deepawali. Producers have to factor the anticipated rise in demand and thus plan their production patterns by hiring extra employees, usage of more machinery, increased purchase and usage of raw materials and facilitating quick logistics to end-use points. Therefore, they need to eliminate uncertainty in demand. If the government were to impose the ban at the last moment, they too would get affected. Again the Coasian problem lies something like this. The government can act as an agency of public interest and if it believes that crackers are harmful can ban the sale of crackers. Yet what is missing is the production of crackers is not banned and remains legal while consumption is banned. This goes agains the very roots of economic thinking. The producers have the right to produce and the consumers have a right to buy. The government either has to compensate the producers for these distortions or has to compensate those who claim victim of cracker bursting.

In this attempted resolution, one wonders whether there is a genuine interest or would it be a case of moral posturing and one-upmanship. Each and every party remains silent on this issue till a couple of weeks or so remain for Deepawali. The courts which began by venturing into this a few years ago on the issue of pollution in Delhi are perhaps the worst culprits. The courts have simply refused to see the same as Coasian issue and instead viewed it from a very narrow prism. As highlighted before, a mother narrative emerges and gets ingrained in the minds of the people. Once the mother narrative gets ingrained (in this instant case of air and noise pollution being bad), a child narrative is introduced. The child narrative is the crackers cause pollution and hence not to be used. The prevailing wisdom ingrained through the mother narrative enforces a bias against the crackers.

The rightwing on the social media often sees this as a conspiracy against the Hindus. They might or might not be right though the past evidence from history does point out some merit in their contention. Yet they have hardly been able to build a counter narrative. For almost the whole year, they sit silent barring a few noises. The solution to this does not lie in blabbering on social media with a tinge of helplessness. The government cannot be expected to act unless there is some solid evidence to the contrary. The rightwing has hardly been able to build up evidence for its points or build towards a Coasian solution. The alternative of making it a political issue given the high stakes in Sivakasi, the hub of cracker manufacturing too seems absent by and large. The solution of Jallikattu was possible only through the political mobilization in Tamil Nadu.

As one observes the narrative, it seems to be in flow only around a very narrow period of time. Unless the rest of time is used to build counter narratives and challenge the existent narrative, the authorities are unlikely to be under pressure or would seek to go for a solution. The solution as suggested must be framed in Coasian terms to resolve the same. Everything else is secondary.