Sunday, August 8, 2010

Common wealth. What is more uncommon about it, the expenses, the speculations or the reactions?

Any event which is so big in itself  could not only add to the existing grwoth of  a developing nation like India but helps in generating more employment and other benefits . The Common wealth games are contributing to the livelihood of almost 300000 people (WSJ) employed in infrastructure and  other 200000 involved in services.

We know that the people employed in infrastructure would no longer will be working after the completion of the jobs but they have been involved since 2003 so lets account there presence till Oct-2010 and look at the future events taking place.

The stadiums might not be reused, but the equipments hired would be paid for, the stadiums would have tickets contributing towards their fixed cost (contribution), the roads being used and hence value for the money, the visitors coming in the country would stay in hotels (spend )and involve in other shopping around the town.

The basic economics suggest that any input by government favors a multiplier effect on the over all economy hence pump the economy with jobs and money. In a country like India the government investments still do not produce crowding out effect(as in case of developed nations) as in India  the private players  would still have lot of scope to take part.

It’s been estimated that a government expense in India results in a multiplier effect of approximately 1.8(WSJ). We know that after the approx 10000 millions expenses so far and over all revenues and expenditures to touch 2 billion approximately, the net multiplier will be approximately 4billion.

There are always possibilities of leakages in a system and so is the case of common wealth games and despite the uncommon large leakages happened what could possibly be done is manage the large event coming up not only for pride but also for the growth of the economy.

India won the bid to conduct an even which is so large and after having spent so many crores and expecting more to be spent are we looking back to withdraw it? Debate over it? or find a solution?


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