WHICH FESTIVALS ARE CELEBRATED IN THE STORY AND WHY ARE THEY IMPORTANT TO THIS CHARACTERS

I can't recall every festival in the book. I do remember when Hari returns to his village before Diwali festival and he finds that his father has changed. Diwali is the festival of light over darkness and perhaps his father's new attitude is symbolic of this.

There are 2 festivals which were celebrated in The Village by the Sea. They are Coconut Day and Diwali.