New Delhi: Growing environmental concerns and rising raw material prices have led to a 40 per cent decline in demand for firecrackers this Diwali, an Assocham study has claimed.

The chamber surveyed 250 firecracker manufacturers and 500 retailers in different parts of the country, including Chennai, Delhi, Mumbai, Kolkata and Lucknow, in its study.

The study said that environmental concerns and awareness about health hazards have led people to opt for either a cracker-free Diwali or less crackers.

It said the increase in raw material and fuel prices are expected to push up cracker prices by up to 50 per cent this festive season in comparison to the same period last year.

"This would lead to less demand for crackers, thus affecting the margins of producers," Assocham SecretaryGeneral D S Rawat said.

The rise in prices will force people to cut their budgets for firecrackers considerably, the study said.

Over half of the respondents in Delhi said they have been suffering losses over the last two years and their profit margins have been whittled down by over 40 per cent.