Hey Priyanka, you may try some 'clay activity' fun with clay, and trust me, people really enjoy doing such activities. They can make diyas and paint them the way they want, and then you can ask the vendor to bake them. Alternatively, you may ask the vendor to provide some unbaked items, and employees will only have to paint them before baking (which the vendor will do). Employees will also feel good that they are making diyas of their choice. You may keep this activity going on for 2 hours in the evening.
It is simple, less messy, and cost-effective. If you want to add something as social responsibility, you may invite some orphan kids! In many such institutions, children make handmade candles, carry bags, small pouches, and some decorative items. You may try setting up a stall with their handmade items (and they will manage the counter), and believe me, the kids feel so good and happy when you appreciate their work and make a purchase. Employees also enjoy buying from them because it gives them a sense of joy and satisfaction that they have contributed to a little happiness in their lives.
Enjoy engaging employees and have a great Diwali.
Regards,