The world’s biggest sporting event kicked off in the city of love, Paris, on July 26th. More than 10,000 athletes are participating in the 2024 Olympics, and India is sending its largest-ever contingent of 117 athletes. Every time the world witnesses an Olympic event, a debate starts in India about whether it should take the plunge and host one.
A global sporting event like the Olympics costs billions of dollars and requires fulfilling a list of guarantees about venues, sustainability, and infrastructure provided by the International Olympic Committee (IOC).
Read on to learn more about the economic challenges, benefits, and path to hosting an Olympics in India.
What’s Happening?
In October 2023, Prime Minister Narendra Modi confirmed India’s bid for the 2036 Summer Olympic Games while inaugurating the 141st session of the IOC in Mumbai. Hosting an Olympic Games requires a massive investment in creating both sports and non-sports infrastructure.
According to the Oxford Olympic Study 2024, the average cost of hosting an Olympics is $8 billion.
According to Mint, the last three Olympic Games, i.e., 2012 (London), 2016 (Rio), and 2020 (Tokyo), have together cost $50 billion, exceeding the budgeted amount by 185%. This figure does not include costs for transportation and accommodation infrastructure, which are generally higher than the games themselves. Although 95% of sports in the Paris Olympics will be played in existing or temporary facilities, the cost of hosting the Olympics is $9 billion, which is much higher than the estimated amount.
Challenges of Hosting Olympic Games
One of the biggest hurdles in bidding for the Olympics is the huge cost involved in preparation and organisation. The country needs to have world-class sporting and non-sporting infrastructure, which can cost anywhere from $5 billion to $50 billion, according to a study by the Council on Foreign Relations, an American think tank. The 1976 Olympic Games in Montreal left a huge debt burden on the Canadian economy, and some economists explain that the 2004 Olympic event can be partially blamed for the Greek debt crisis.
Many people argue that the new infrastructure created for the Olympic Games will usher in a new era of economic growth and development. However, the past experiences of Rio (2016 Games) and Sochi (2014 Winter Olympics) suggest otherwise. The facilities created for the games are lying in shambles because of very high maintenance costs. Apart from this, there are several other concerns like the displacement of residents, gentrification, and environmental degradation.
Benefits of Hosting Olympic Games
The biggest benefit of hosting Olympic events is the economic growth and development it can bring. Almost 85% of the total budget is spent on creating infrastructure like stadiums, residential units, and transportation facilities. These outlast the games’ duration and can be immensely beneficial for the city’s economy. Moreover, a successful Olympic Games can significantly improve the country’s image and lead to increased FDI and tourism in the long run.
The Mint talks about a report by the University of Limoges’s Centre de Droit et d’Économie du Sport (CDES), which highlights the expected economic benefit to the Paris region from the games to be in the range of €6.7 billion to €11.1 billion over a 17-year period between 2018 and 2034. It has created more than 2,50,000 job opportunities around the Paris region and provided a boost to the local economy.
What’s Next?
Hosting an Olympic Games requires large-scale economic and strategic planning to ensure that the billions invested in creating infrastructure provide long-term benefits to the city and its residents. A proper marketing mechanism is essential to generate excitement among the masses and make the games a success. Moreover, a collaborative and consensus-based approach is necessary in a diverse country like India for sustainable and successful hosting.
With India’s recent informal bid announcement, the country could have nearly ten years to meticulously strategise and prepare for this monumental event, ensuring lasting advantages and a positive impact on the nation’s economy and global image.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*This article is for informational purposes only. This is not investment advice.
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