The plethora of excitement surrounding the commonwealth games 2010 has long given way to the anger amongst the people of India. Though the games are seen as shiny new booty by the gold diggers, they have been quite successful in digging holes in the common man’s pockets.
Eight years ago when India won the bet, the official cost estimate was Rs 1,800 crore. The initial estimate has increased up to 523 percent. Now the official figure is Rs 10,000 crore while it is actually believed to be Rs 30,000 crore unofficially. And facing a cash crunch the Delhi government has resorted to widespread increase in taxes and reduction in subsidies to generate cash for the games.
The most necessary commodities like LPG, diesel, CNG, etc. have suffered a price hike, thus upsetting the general public. Plus recently, the Shiela Dixit led Delhi government has increased the road tax which in turn is irritating for the residents and commuters.
On the other hand the multinational companies, Indian tourism, media, hotel industry and even small scale manufacturers are benefiting from this sports extravaganza. The latest figures on foreign tourist arrivals in India suggest that the recent buoyancy in the hospitality and aviation industry may continue in the future as well. According to figures released by the ministry of tourism, revenues from foreign tourists rose to a new high of Rs 7,042 crore during December 2009. Two years ago, the corresponding figure was Rs 5,079 crore. Also, the number of tourists’ arrivals during the period jumped to nearly 6.5 lakhs from a little under six lakhs two years ago. Foreign tourists account for nearly 50% of the hotel industry’s revenues and are a key revenue driver.
Hotel companies foresee a further rise in room rates in the NCR region due to the Commonwealth Games. There has been a virtual race in the industry to set up properties in the NCR region. Investors need to keep this dynamics in mind while buying into stocks in this segment. Among hotels, the best bet could be companies such as Asian Hotels, Hotel Leela and EIH, which derive a significant chunk of their revenues from the NCR region. In the travel agencies segment, it will be prudent to focus on diversified players – Cox and Kings India, International Travel House and Trade-wings while in the airline industry, Spice Jet and Jet Airways appear to be better bets. [source]
There are some indirect beneficiaries of the commonwealth games too. Delhi has seen fast infrastructural development in the past few months. The under recognized sports have been gaining popularity lately and better equipments and facilities have been provided in the NCR to train the participants of the games. To prepare for the energy-usage spike during the Games and to end chronic power cuts in Delhi, the government is undertaking a large power-production initiative to increase power production to 7,000 MW. To achieve this goal, the government plans to streamline the power distribution process, direct additional energy to Delhi, and construct new power plants. In fact, the government has promised that by the end of 2010, Delhi will have a surplus of power.
The Delhi government is also planning a program to teach English to those who will be serving the tourists. These include auto rickshaw drivers, security workers, waiters, porters, etc. But on the dark side the ‘beautification’ has demolished hundreds of homes and the ‘repatriation’ of Delhi’s beggars has been seen as a silly act of pretending poverty doesn’t exist and portraying Delhi as Shanghai.
Thus, like everything else the commonwealth games have their pros and cons, but they are sure to bring in lots of foreign revenue and benefit the government, though at the moment its costing the common man his life and soul.
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