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Deepavali Legends
Deepavali is celebrated in commemoration of the destruction of the demon called Narakasura by Lord Krishna. As Lord Krishna killed Narakasura on the Chaturdasi day (the fourteenth lunar day). it is also known as Narakachaturdasi. The people of Dwaraka greeted Lord Krishna with illumination and rejoicing in honour of his victory over Narakasura. The darkness of the Chaturdasi night compelled them to use many lamps on the occasion, and subsequently the illumination became a part of this celebration.
Deepavali is supposed to be the day when King Rama's coronation was celebrated in Ayodhya along with Sita and Lakshman after his epic war with Ravana. Fireworks and festivities are an essential part of the occasion.

Another legend is that Vishnu gave the festival to the Vaisyas, who are traders, by tradition, and people who tend cattle and cultivate the land. It honors Lakshmi, the goddess of wealth and good fortune and consort of Vishnu. It is celebrated with worship, ceremonial displays of lights, and fireworks to chase away the spirits of the deceased. It is also a time for financial stock taking as well as for the exchange of gifts. The rich merchant communities of western India celebrate this festival in great style and throughout India all traders open new account books for the coming year on this day.
Another legend is associated with the King Bali (Maha Bali refer Onam festival). The king had a long and happy reign. To propitiate the gods he performed a Yagna (fire sacrifice). So successful was his Yagna that even the gods were terrified to appear before him and grant him a boon in the fear that what he might ask could be beyond their capacity to satisfy. To avoid embarrassment the gods sent one of them to King Bali's court in the guise of a sage. When the Sage reached King bali's court, Bali asked him to ask for anything he wanted. Facing the righteous King, the sage asked for space for three paces. This request seemed strange to all the courtiers, but king Bali granted it. Once the request was granted to him, the wily Sage, who was none but god in disguise, submerged the entire world (Mrityu-loka) with one step, with the second he submerged heaven (Swarga-loka) and for the third step; there was no respectable place to put his foot down and so he asked the bewildered Bali for some respectable place to this foot so that the boon could be fulfilled. Left with no alternative, the noble but exasperated King Bali offered his head for the purpose. To his surprise, the wily sage not only lost no time in placing his foot over King Bali's head, but also thrust Bali into the nether worlds (Patala-loka) which as per Hindu cosmogony is hell and lies below the surface of the earth.
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