Hosting The Olympics: What it means for India?

Hosting the pinnacle of all sporting events - The Olympics, is an opportunity that has been widely deemed to be an extraordinary honour, and one that many Indians would be thrilled to see their country land. India recently delivered its best performance yet, at the Tokyo Olympics - bagging podium finishes in 7 categories, with 3 very close runner ups.  However, performing well in the event and hosting it altogether are entirely different prospects, and there are countless relevant aspects to examine in order to truly consider the latter. So, let’s take a deeper look at some and endeavour to analyse them. 

Is India “eligible”?

Conventionally, countries do not host the Olympics, cities do. The process starts with making competitive bids to the International Olympics Committee, getting approved to be part of the selection, then passing a rigorous ten-month audit that seeks to ensure that the essential requirements are met - which includes the ability to accommodate a tremendous number of tourists, journalists, and athletes, efficient transport infrastructure, ample security, and of course, facilities of the highest of standards for all the sporting disciplines. 

So, which Indian cities can potentially make the cut?

One venue that may spring to mind is the ambitious Sardar Patel Sports enclave in Ahmedabad. The Ahmedabad Urban Development Authority has invited proposals to conduct a ‘gap analysis' to assess the infrastructure in the city and suggest what more is needed to make it a potential venue for the Olympics, after which a report will be submitted to the state government for further action.

On the other hand, Delhi’s Deputy CM Manish Sisodia has also pledged to upgrade the city’s sports infrastructure to launch a bid for 2048. Though IOC has recently approved changes to allow multi-city and country-wide bids, India perhaps still needs to unify its efforts more and establish some clarity in prioritisation and direction of appropriate expenditure. 

Speaking of expenditure, where do we stand in terms of sports spending?

Although in recent times, we were seeing a paradigm-shift in the government’s approach to sports, the pandemic seems to have considerably stifled the efforts that were finally being steered towards expanding India’s mark in sports.  In 2016, ‘industry’ status was accorded to this sector, enabling private corporations to go beyond the Corporate Social Responsibility rhetoric and invest heavily in sports infrastructure: building amenities, sponsoring athletes, training facilities, etc.  Government initiatives like Khelo India, Fit Hai India are also nurturing a more ‘sports-friendly’ environment beyond cricket.  However, in the 2020-21 budget, GOI had allocated ₹2826.92 crores for sports, merely ₹50 crores more than the revised estimates for FY 2019-20. And, although the Modi government's flagship sports programme 'Khelo India' received a substantial hike of ₹312.42 crores, the National Sports Development Fund saw a reduction of ₹27.15 crores from ₹77.15 crores in 2020-21. Aside from more focused expenditure, India could perhaps also do with better-structured spending. For instance, our hockey teams’ commendable performance this year came after the Odisha Government’s sponsoring of the teams for the past 3 years: bringing home the first medal after 41 years needed vision, commitment, and long term strategy - something that can only be feasible across categories if each state emulates this and sponsors different sports, thus, helping build excellence in an efficient manner.

Promising trends: Cause to be hopeful? 

Sports governance in India is often hampered by bureaucracy and politics. While the autonomy of sports federations is crucial, their lack of accountability has a rather crippling effect on efficiency and key functions. Inept governance and financial irregularities are often blamed for our lack of competitive edge in sports other than cricket. On a positive note, however, in July 2016 the Supreme Court accepted the Lodha Committee recommendations with regard to the BCCI case, which included ineligibility of civil servants for leadership roles in sports federations. 

Moreover, following the footsteps of the BCCI, several sports federations and private organisations have contributed to the development of league-based tournaments on the lines of the IPL. The increasing traction gained by these sports leagues, and the resulting boost in sponsorships have opened up vast high-earning opportunities, which have gone on to encourage the youth to seek sport as a career.

India’s sheer population of 1.4 billion people and its overall demographic suitability (65% of population below 35), has caught the imagination of major global broadcasting corporations and sponsors alike.  Broadcast Audience Research Council (BARC) reported that rural India contributed 45% in the total sports viewership: A consistent trend across major sports extravaganzas. This demonstrates the latent potential of Indian markets. In addition, a large number of sports startups focused around sports infrastructure, data aggregation, education and training, etc., have also sprung up. 

Owing to these trends, the IOC president Thomas Bach, in 2018, indicated that India had the ‘potential’ to host the Olympics in the foreseeable future.  He recommended close contact with a "four-partite working group” which would include the IOC, Olympic Council of Asia, IOA and the sports ministry.  

Should this development be welcomed or viewed with caution? The next section deals with addressing this question.

How wise is hosting the Olympics economically?

Now, the general perception is that hosting the Olympic Games provides an unparalleled boost to the host economy by attracting unprecedented levels of FDI, and creating jobs across sectors like tourism, hospitality, etc. However, this is far from reality. Instead of prolonged periods of massive growth as expected, most economies have found themselves grappling with the ‘economic valley effect’: a huge surge in demand followed by a dramatic dip in economic activity.  Even developed economies find it difficult to put up with these costs and countries are left in tremendous debt. Poverty, malnutrition, homelessness, healthcare and an economy ravaged by Covid19, with a fiscal deficit way beyond targets,  is already plenty to deal with. And, economic realities shouldn’t overshadow blind passion. 

Geo-Political Statement 

Nevertheless, one cannot deny that hosting an event of the scale and stature as that of the Olympics is a matter of great prestige and should definitely be on the “To-Do” list of an aspiring super-power, like India. Hosting this truly global sporting event is in keeping with India’s long-standing vision of ‘Vasudhaiva Kutumbakam’ and would assert India’s centuries-old position of a ‘peaceful’ oasis in a conflict-ridden South Asia. Given the present scenario and with Australia claiming the 2032 Games, perhaps 2040, or even 2048 would be a good target for India. Inspiration can be drawn from the Japan 1964 Olympics. Within 2 decades of the nuclear bombings of Hiroshima and Nagasaki, not only did Japan survive, but it also rebuilt its economy to such an extent that it could host the Olympics; a move that elevated its status to an elite First-World Country, a peaceful haven, and a leading nation.  

That’s all for this week! We hope you liked it and would love to know your thoughts in the comment section. This article is written and curated by Nirupama Banerjee and Deeplata Deeksha Jha.

(Nirupama Banerjee is a 2nd year student pursuing B.Sc Economics(H) at St. Xavier’s College (Autonomous), Kolkata and a Junior Associate of the Xavier’s Finance Community.)

(Deeplata Deeksha Jha is a 2nd year student pursuing B.Sc Economics(H) at St. Xavier’s College (Autonomous), Kolkata and a Junior Associate of the Xavier’s Finance Community.)