With the scrapping of the 2014 Formula One Indian Grand Prix, speculation has been rife that the 2013 edition could be India’s last tryst with the marquee sport. Although there is some hope of the event returning in 2015, this would require significant lobbying on the part of promoters, Federation of Motor Sports Clubs of India, and the Indian government. That such an effort is worthwhile is beyond doubt. Against the backdrop of the current economic slump, retaining the Indian Grand Prix would bring myriad benefits to the economy.
There’s no denying that F1’s global reach has raised the country’s profile significantly. The Buddh International Circuit is the only one of its kind in the sub-continent to host the showpiece event. In fact, the track and the sports city coming up around it exemplify the kind of infrastructure development that F1 can catalyst. Add to this the booster shot that local tourism receives every time the Grand Prix is held. It’s a well documented fact that F1 fans are heavy spenders, which translates into more revenue for local hotels, restaurants, malls, etc. Having F1 in India could work in tandem with other measures to boost tourism, such as offering visas on arrival.
Of course, a certain gestation period is required during which F1 is allowed to grow and build its local fan base. In this regard, the government must step in and remove hurdles facing the Indian Grand Prix. Taxmen, for instance, make extraordinary and irrational demands on Grand Prix organisers, which they don’t face in any of India’s Grand Prix competitors. This is tantamount to killing the goose that lays the golden egg. Retaining F1 would be a huge advantage for Indian sports and help generate interest among youngsters. Who knows? The next Michael Schumacher could be among them.
India cannot sustain F1
There is a strong case to be made against Formula One today because the organizers want a bailout package from the government to keep the race going in India. The returns for giving the bailout are to come in the form of vague arguments about a boost to tourism and enhancement of national prestige. It is an unconvincing argument and if Formula One in India cannot sustain itself, it deserves to go.
The perilous state of government finances is well known. Over the last 15 months, it has taken considerable effort on the part of India’s economic policy making apparatus to keep international credit rating agencies from marking down sovereign rating. Public finance is under cons-tant scrutiny and expenditure of every rupee has to be weighed carefully.
In this context, it is inconceivable that any Indian government can seriously consider a proposal to provide a bailout for Formula One. Especially, when a bailout includes an intervention in tax policy to help Formula One. Look around the world and difficulties in sustaining this sport are obvious. Australia, with its greater experience in sustaining elite sporting events, is struggling to make a compelling economic case to keep supporting the Melbourne leg of Formula One.
A boost to tourism is an argument used to justify state support for Formula One. The current policy of extending the number of countries whose citizens can get a visa on arrival in India is more likely to boost tourism. If India’s inherent advantages have not been able to draw even half the number of tourists Singapore gets,motor racing is unlikely to do the trick. The last decade showed India’s global image received a boost when its economic performance improved. Hardheaded decisions are part of the improvement process and not caving in to well entrenched lobby groups.