research paper- Suvarun Mazumder

Commonwealth games and its impact on the Delhi Economy Page 1
Submitted for the partial fulfilment for the award of Degree of
Bachelor’s in Economics to the faculty of NMIMS.
NMIMS’ SARLA ANIL MODI SCHOOL OF
ECONOMICS
2010 Commonwealth Games and it’s impact on the
Economy of Delhi
Name : Suvarun Mazumder (A036)
Submitted to : Professor Sneha Thayyil
Submitted on : 28th March, 2016

ACKNOWLEDGEMENTS
I would like to thank Mrs. Amita Vaidya (Associate Dean, SAMSOE) for providing me with
this unique and exciting opportunity to write a research paper. I would also like to thank Prof.
Sneha Thayyil, my mentor for this Research Paper for providing me with the opportunity to
work under her. Her constant guidance and inputs helped me create a viable structure for this
paper and focus on what is important. I would also like to thank Narsee Monjee Institute of
Management Studies (Sarla Anil Modi School of Economics) for providing me with the
necessary infrastructure and access to databases without which it would have been impossible
for me to complete this paper. I would also like to thank the creators of this course for giving
us the opportunity to do such a research paper and my friends for their constant support and
inputs.

ABSTRACT:
Followers of major sporting events such as The Olympics, The World cup vouch for the fact
that these events attract millions of wealthy tourists and visitors to the host nation thus
enhancing the brand image of that particular nation and with it a lot of other economic
benefits and hence, we see countries in a cut-throat competition to bag the responsibility of
hosting these major sporting events. However, there a lot of costs attached in organising these
spectacles, the magnitude of which is so large that it is unclear whether either the short or
long-term benefits would be enough to cover these extravagant costs. The following paper
looks at both the positive and the negative impacts that the Commonwealth Games 2010 had
on the economy and the image of Delhi as a city and its ability to host an event of this
magnitude in the near future. My main focus is to study the impact of the XIX
Commonwealth games on Delhi through a thorough study of various parameters like
infrastructure investment, tourism spending, revenue receipts, employment rate, etc. in Delhi
by analysing the data for these variables after it won the bid to host the 2010 Commonwealth
games.
Keywords: brand image, economic benefits, infrastructure, magnitude, developing.

TABLE OF CONTENTS
SL.NO PARTICULARS PAGE NO.
1. Introduction 5-8
2. Literature Review 8-29
3. Research Objectives 30
4. Data Collection 30
5. Methodology 30-33
6. Data Analysis and Inferences 33-41
7. Limitations 41
8. Conclusion 42
9. References 43-44

INTRODUCTION
"When you bring (Euro 2012) to Poland and Ukraine you change the life for the people. You
don't change only the life for one month of football, you change the life for the people
because there is a big boost for the country".
- Michel Platini, UEFA president
CNN, December 02, 2011
Sporting mega-events such as the summer and Winter Olympic Games or soccer’s World
Cup focus the world’s attention on the region hosting the event and are highly sought-after by
cities and countries around the globe. It would not be an exaggeration to suggest that the
competition among cities and countries to host these events can often be as fierce as the
competition among the athletes on the playing field. Over the past decade or two, developing
countries have increasing thrown their hats into the ring for a chance to host these mega-
events.
Sports in this modern world have become a very passionate as well as obsessive subject to
many. In the days preceding the 2006 FIFA football world cup, the theme of football bringing
the world closer and uniting different religions was a media favourite. A lot of experts or
academicians have also concluded that religious pilgrimages of the ancient times have now
given way to modern pilgrimages to such mega-sporting spectacles like The Olympics, Asian
Games, World Cups, etc. Therefore we come to the conclusion that these mega-sporting
events have indeed become spectacles and with the power of attracting millions and billions
of viewership it can be very beneficial to the host nation and provide them with a huge
amount of exposure. However, India had not made a mark on the world as a sporting nation
barring cricket and a handful of gifted individuals. India was languishing at the bottom of the
table if one looked at the population to the medals won by that country ratio by a pretty
handsome margin. The 1982 Asian Games which also hosted by Delhi had provided a much
needed boost to sports and sporting facilities in India but we are yet to stand up to or match
the international standards and the Commonwealth games also did a good job in bridging that
gap but the permanency of the impact still remains unambiguous and therefore, some
questions need to be answered before one can come to the conclusion that such events have
positive effects on the community of the host nation. Some of the hard questions that need
answering and also the reasons why I personally want to study this topic are that is such an
enormous amount of spending justified. One must not forget that the money that goes behind

funding these mega events is mainly procured from the public and the benefits felt and
realised should be enjoyed by all i.e. the society at large and not just by the cream of the crop
or the elite minority of the society. Other important questions that come to mind pertain to the
impact of the commonwealth games on the urban development of Delhi and if the games
would lead to unchecked and unplanned development in many sectors and if it would be
possible to sustain and maintain the infrastructural changes that happen as a result of the
Commonwealth Games. Will the stadiums and other infrastructure built prior to the games be
utilised thereafter or will they turn into “white elephants” (Chotani, 2007) i.e. these facilities
are very seldom used once the games end and end up being a long-term liability to the
economy and at the same time bear high maintenance costs.
The commonwealth games have long ended but its impact still persists. Apart from the
infrastructural and the other tangible developments seen in the economy there were also a
number of intangible aspects of the games that have not been looked into in detail and this
forms one of the main aims of my research. The brand image of Delhi as a city was given a
major boost not only in international terms but also the way in which other cities in the same
country looked at Delhi and its perception of itself as well. However, the social, political and
economic decisions that were taken in order to bring about this change in image have not
always been done with the right intention and thus I have aimed to look at how these
decisions played a major role in the lives of people belonging to different social strata’s in the
society. The commonwealth games aimed at establishing India as a growing economy in the
world and was seen by many as an economic windfall to the country in the process creating
employment and other facilities. However, a lot has been said and written about the impact of
the games not only on Delhi but on the nation as a whole, therefore, one of the main
rationale’s behind me studying this topic is whether the games were able to deliver what it
had promised to do and the different sectors it affected . Being a student of economics I will
also definitely look at the economics of the games, whether the expenditure made was
necessary or if it was wasteful lavishness and last but not the least the legacy that the games
left behind especially the social legacies (Shalini Mishra et al, May 2010).
The XIX Commonwealth Games were held in Delhi from 3-14th
of October 2010. India was
the third developing country and the second ever Asian country to host these games. The
games were graced by a total of around 6,100 athletes from 71 different commonwealth
nations challenging each other in 21 different sports and a total of 272 sporting events
(Vinayak Uppal, 2009). The efforts to transform Delhi and make it a world class city have

been on since India won the bid to host the 19th
commonwealth games in the year 2003 and
thus, it has seen a major overhaul in its infrastructure and the various sporting facilities across
the city in the years leading up to the games.
1
The main objectives of the Commonwealth games were as follows:
 To deliver the best Commonwealth Games.
 To build state of the art sporting and city infrastructure.
 To create suitable environment and opportunities for the involvement of the
citizens in the games.
 To showcase the culture and heritage of India.
 To project India as an economic power and Delhi as a global destination.
 To leave behind a lasting legacy.
The main objectives of my study can be listed as follows:
 To find out the importance and the need of hosting these world events by developing
countries like India.
 The amount of investments that were made for the CWG 2010 and the type of
development that Delhi saw in its different sectors owing to the Commonwealth
games.
 The effect that these games have on tourism and tourism expenditure in the city and
its impact on the Brand image of Delhi.
 To find out if everything that had been promised by the organising committee were
delivered or were they irrational and false claims made by them and to study the
economics of the games alongside thereby, gauging whether the huge costs borne by
the nation was meaningful or was it a “wasteful extravagance” (Miloon Kothari et
all, 2010).
 The legacy that the games left behind on Delhi especially the social legacy and
whether it was positive or negative in this case.
1
A report on the preparedness for the XIX Commonwealth games 2010, SAIINDIAN.gov.in,
Comptroller and auditor general of India, 2010.

 To briefly study the social and economic impacts of hosting mega-sporting events on
other developing countries namely The 2014 FIFA World cup held in Brazil and try to
draw a similarity with India when it comes to the impact of hosting such events on the
economy of the developing country.
LITERATURE REVIEW
 The first objective that I go on fulfilling through my study is to find out the need for
hosting these mega sporting events and why countries especially the developing ones
compete vigorously to bag the responsibility of hosting these games.
“2010 Commonwealth Games in Delhi: How much does national prestige cost”, a book
by Supriya Chotani tells us that much like the other mega sporting events the CWG is an
eye-catching event to host. There are a number of eager nations waiting to pounce upon the
opportunity to host these games as it is seen by them as a matter of ‘national honour’ for
being in the international spotlight for a fortnight. Some of the main reasons or pointers
suggested in the paper hosting these games are:
These games are responsible in creating and re-distributing millions and billions of dollars
throughout the world. In the years leading up to the event, the nation sees and undergoes a lot
of major infrastructural changes for example the sporting facilities, beautification of the city,
construction of new hotels, transportation system, etc. And suppose the city gives a good
presentation of itself on course of the games then it automatically paves the way for more
future foreign direct investments into the country. It also attracts a huge base of tourists from
different parts of the world who end up spending much higher than the average per capita
consumption of the citizens.
There is a massive inflow of cash or revenue from the advertising campaigns that are
churned out by the companies wanting to get their services or products across to the large
customer base worldwide created due to the games.
The games help the city enjoy a worldwide experience and are an important catalyst in
shooting the city into the international limelight resulting in economic gains. The
commonwealth games has athletes and officials hailing from around 70 different nations

competing against each other and these 70 nations approximately make up 30 percent of the
world population and thus the exposure that the host nation gets is immense. It also helps
create a legacy and it is very important for the city to sustain that legacy that it has created
through delivering these games. It helps the country gain international recognition.
The games also bring about an urban re-development of the host nations as we will see in
the case of New Delhi and it helps create a brand image of the city through development that
makes it a potential destination for foreign investments and also changes the city’s perception
of itself.
“Mega-sporting Events in Developing Nations: Playing the way to prosperity?” a paper
by Victor A. Matheson and Robert A. Baade states that one of the most important reasons
behind the quest to hold these events lies in the fact that it brings about an economic windfall
and the huge monetary rewards attached in doing so. This particular paper throws light on
this matter using the examples of the Summer Olympics held in Los Angeles in 1984 and
Atlanta 1996 as well as the Football world cups held in the USA in 1994 and 2002 co-hosted
by Japan and south Korea (Matheson and Baade 2003) and how hosting these events
enhanced their international reputation and spurred the respective economies on. Other than
this economic motivation the other factors that play a vital role are the opportunities for
prestige and the chance to make a mark on the international circuit as a flourishing economy.
“The 2010 commonwealth Games: Whose Wealth? Whose Commons?” by Shalini
Mishra, Shivani Chaudhary and Miloon Kothari, MAY 2010 mainly focuses on four
main findings namely 1) India’s bid for the 2010 games: whether it was justified. 2) If all the
promises made prior to the games were fulfilled or not 3) the economics side of the story:
Whether the expenditure was justified or not and lastly the legacy that the games left behind.
Now, specifically adhering to my objective I analyse why India wanted to host these games.
The first claim made by India was that hosting an event of this magnitude would help inject a
sports culture in the young generation and the exposure and experience received will help in
advancements in the sports scenario in India.
“2
Hosting the Commonwealth Games will inculcate a sports culture in the Indian youth.
“… The Commonwealth Games would definitely transform the sports scenario not only in
India, but in fact in the entire region.”
2
“2010 Commonwealth games: Whose wealth? Whose commons?” Shalini mishra, 2010

Other claims that were made by India were that the Asian games, 1982 hosted by Delhi had
been “the crowning jewel” in its history and the city underwent a massive overhaul procedure
and we hoped that the commonwealth games would do the same. And also, that developing
countries like India should be given an equal opportunity like all the other industrialised
countries to host an event of such stature if the Games are meant to be all encompassing.
 The next objective I will address is the costs incurred by the nation and the physical as
well as intangible developments that were seen in the Capital before and during the
Games.
The main areas that were impacted in terms of investment and development are:
A. INFRASTRUCTURE
B. EMPLOYMENT
INFRASTRUCTURE
The main objectives under infrastructure are as follows and all infrastructure projects and
activities undertaken can be classified under one of the following:
1. Stadiums
2. Games Village
3. Transport Sector
4. Urban Infrastructure
5. Make Delhi “World Class”
1. New Stadiums
The main developments were construction of stadiums/sporting venues and up gradation of
the existing ones.
The Delhi Development Authority (DDA) planned new sporting venues, five new outdoor
stadia and two indoor stadiums. Major ones being:
- Jawaharlal Nehru Stadium
- Indira Gandhi Stadium

- Dr. Shyama Prasad Mukherjee Swimming Pool Complex
- Major Dhyanchand National Stadium
- Dr. Karni Singh Shooting Range
Land measuring 40000 sq m was earmarked for the same.
Land for two indoor and one outdoor stadium, was provided by the state government free of
cost.
26 new training venues were constructed and 16 training venues upgraded.
The sports complexes built for the 1982 Asian Games were upgraded, including the
Jawaharlal Nehru Stadium Sports Complex that would be used for opening and closing
ceremonies.
The investments made for the construction of the above mentioned venues is depicted in
tables below.
 India’s Bid Document budgeted an additional US$16.7 million (Rs. 75.2
crore) for purchase of technical equipment.

Source: India’s official bid document for the commonwealth games
 The total expenditure on stadiums and training centers was estimated at Rs.
3,389.4 crore along with Rs. 42 crore consultancy fees. This is more than a
2,160% increase from the original estimate.

 The cost of construction and renovation of five major stadiums was reported to
have shot up by almost 250 per cent of the original estimate.
2. Games Village
The Commonwealth Games Village, (a state-of-the-art village with two zones, a residential
area and an area for training facilities) with 1,168 apartments, was built on a PPP model
between Emaar MGF and DDA. They won the bid to develop the 118-acre residential project
at Rs. 321 crore against a reserve price of Rs. 300 crore. (Commonwealth games village,
High level committee for commonwealth games, 2010)
Eventually the Commonwealth Games Village was constructed at a cost of US $230.7 million
(Rs. 1038 crore). But the 2009 financial crisis and realty slump meant the company couldn't
find buyers (for apartments) and raise money. It had to ask DDA for a bail out. In May 2009,
DDA announced a Rs. 700 crore bailout package for Emaar MGF, the first such government
bailout for a realty company. (The report of the Commonwealth Games Evaluation
Commission for the 2010 Commonwealth Games, 2010)
3. Transport Sector
Airports
The Delhi Government modernized and privatized the international airport. ‘According to
GMR-Fraport, the successful bidders for revamping Delhi airport, the new airport will be
able to handle 80 million passengers a year by 2021, as compared to 12.8 million passengers
in 2004-05.’ (Chotani, 2007)
A “green helipad,” the country’s first ever, is to be built at the Commonwealth Games
Village at a cost of Rs. 1.92 crore. (Miloon Kothari et al, 2010)
Roads and Railways
The renovation of Old Delhi Railway Station has cost Rs. 7 crore. (Shalini Mishra, Shivani
Chaudhry and Miloon Kothari, 2010)
A third ring road was constructed to provide access to the Commonwealth Games Village site
and was built at a cost of Rs 3,600 crores. (Chotani, 2007)

A 200 m long carriageway with tunnel was built, connecting the Games Village to the
Jawaharlal Nehru Stadium. It runs from the Nizamuddin Bridge to Subj Burj (Lodi road).
(Chotani, 2007)
Buses
About 1,100 shuttle buses (800 non a/c, 200 a/c and 100a/c mini buses) were to link the
hotels, tourist spots, stadia and airport. All buses had Automatic Vehicle Tracking System,
not only to track their location and speed but also the missed trips. (Chotani, 2007)
Flyovers
There was to be construction of 40 new flyovers before 2009 to improve traffic circulation.
(Anurupa.B.Singh, 2007)
The tables below summarize the approximate investments into each area under the transport
sector:
Source: 2010 commonwealth games: How much does national prestige cost?
4. Urban Infrastructure
Health and Sanitation
The Health Department constructed a sports specialty hospital near the Games Village with
network connectivity to super specialty hospitals and underlined the need for placing 50 new
high-tech ambulances near different venues of the Games. Cost estimates for the same are
depicted below.

Source: ‘Common ‘wealth’ agenda’, The Pioneer, April 28, 2006, New Delhi edition
‘Eight projects to beautify Delhi before Commonwealth Games’
Power
To meet power requirements for the event, Delhi commissioned a 350 MW gas based power
project at an estimated cost of Rs.13 billion and decided to purchase 4,387.17 square meters
land from the Delhi Development Authority (DDA) for Rs 15.5 million towards building a 66
KV grid sub-station at Uttam Nagar. The Delhi government also allowed private companies
to set up a 1,000 MW power plant in Bawana.
The first "green" power grid at the Games Village was built at a cost of Rs. 40 crore. (“2010
Commonwealth games: How much does national prestige cost?” supriya chotani, 2007)
Water
The Delhi Jal Board undertook two new initiatives:
- boost water supply from 670 million gallons per day (MGD) to 941 MGD.61
- Build a 5.3 million euros (Rs. 33 crore) water treatment plant for the Games Village.
The budget for upgrading water supply and sewerage facilities was Rs. 40 crores.
Source: Supriya Chotani, Hazards centre, 2007

Hospitality
Almost 19 five-star and budget hotels were to be built before 2010.
India Tourism Development Corporation Limited’s (ITDC) renovated three state-run hotels
(Ashoka, Janpath and Samrat) and the cost for the same was Rs. 100 crore. Private hotels
were also upgraded.
The government announced a five year tax holiday for hotels coming up in the NCR before
the Games. The tax holiday was even extended subsequently.
Facilities like tourist complexes, restaurants, shopping places and recreational centres were
also invested in. During the event, arts/craft exhibition of commonwealth countries, evening
entertainment/cultural programmes, food festivals and heritage packages were organized.
5. Make Delhi “World Class”
Over and above the projects mentioned above, some projects were undertaken to make Delhi
“World Class”.
Delhi Chief Minister, Sheila Dixit, said that, 3
“Delhi will become a world-class city, a
beautiful, vibrant, and organized place, which makes all of its citizens— poor, and rich—
happy and comfortable living here, and which caters to all their basic requirements of health,
education, water, power, and good roads.”3
She also assured that, “The government would
ensure world-class streetscaping and beautification around various stadiums during the
Commonwealth Games.” (Shalini Mishra et al, 2010)
- India’s Bid Document for the Games budgeted US$ 1.66 million (Rs. 7.5 crore) for
city beautification expenses.
- Delhi may not have drinking water, but athletes coming to the Commonwealth Games
will get water of “first world” standards.
- Streetscaping on Jagannath Marg costed Rs. 3.40 crore whereas the budget for
beautifying Lodhi Road was Rs. 18.55 crore. (Miloon kothari et all, 2010).
- New Delhi Municipal Council (NDMC) announced plans to plant 10 lakh plants at a
cost of Rs. 23.2 crore to add “color” to the Games. (Shalini Mishra et al, 2010).
3
“The Development Game, the Yale Globalist, October 29, 2008”

Summary of estimated investments for all infrastructure projects
undertaken for the Commonwealth Games 2010 (estimates as of 2007)
SOURCE: www.channelnewsasia.com, Billion-dollar Commonwealth Games has India's
sports minister fuming, 2006
All these measures, however, are not likely to yield enough revenues immediately to bear the
total costs of the Games, which has almost tripled. In other words to cover the total costs of
the Games there is going to be significant borrowing from public funds, the market, and
financial institutions. And as with the costs, it is unlikely that these borrowings would be

made public, due to the massive government and media propaganda of acclaiming the event
as a “national” victory of sorts. This, as we shall see later is fairly typical of the organization
of such mega events, whose consequence is years of locked up investments, low returns, and
long-term debts – all of which have to be eventually paid for by the citizens through
increased taxes, prices, and cesses.
 Next up is the impact that the games had on the tourism in the city and the brand
image of the city of Delhi.
‘Commonwealth games and the Economy, Institute of international trade’ portrays the
benefits that the games have on the economy and one of them is the impact on tourism in the
country. It helps attract people from both within the same nation from around different parts
of the country and from around the world. Visitors include the participants as well as the
millions that flock to the host nation from different parts of the world attracted by the
promotion of the city and the competition of course. The increased tourism seen during the
games makes way for an increase in revenue as the tourists spend money on food,
accommodation, tickets for the games, transport, etc.
“XIX COMMONWEALTH GAMES AND ITS IMPACT ON TOURISM” by Shweta
Mishra, 2011 looks at the increase in foreign tourists during the course of the games, the
increase in foreign external earnings as a result of the spending by the tourists and the
different infrastructure and residential arrangements made for them. India recorded an
increase in the foreign earnings from Rs. 54960 Crores in the year to 64890 Crores in 2010, a
growth of around 18%. There was a growth of around 8% in the total tourist arrivals during
the year of the games. When the games were on, the Delhi airport witnessed a total of around
75,000 foreign visitors. The following table showcases a breakup of the same:

Source: Bureau of Immigration, India.
Another positive change that the city underwent owing to so many foreign visitors embarking
on the country was the overhauling of the numerous monuments that Delhi houses. The
archaeological Survey of India spent around Rs. 25.73 Crores behind the same
(Commonwealth games 2010: Conservation, restoration, up gradation of public
amenities at protected monuments, archaeological survey of India, 2006). The
government had also allocated around 25% of its budget for the transport sector constructing
roads, flyovers, and the Metro rail system to ensure the smooth movement of the tourists.
 The next objective is to find out whether the claims made by the organising
committee of CWG 2010 were actually delivered or were they false claims and to
also look at the economics of the games and deducing whether incurring such
huge costs by a developing nation was a good decision?
“The 2010 Commonwealth Games: Whose Wealth? Whose Commons?” a paper by
Shalini Mishra et al, 2010 looks at the claims made by the organising committee prior to
the games and if they were delivered. The claims if placed under four main heads are 1)
the promise to improve infrastructure of the city 2) The promise of creating employment
3) the promise of tourism development coupled with the claim of making the city of Delhi
more visually attractive. To sum all the four claims made by the committee and what
happened in reality we start with infrastructural development.

1. The much talked about infrastructural development has been far too expensive
overshooting the budget by an enormous margin, not systematically planned,
development has been rushed and there have been cases of exploitation of
workers.
Source: India’s bid document for the commonwealth games

The table above shows a budget estimate of around 238 crore rupees whereas the actual
expenditure on stadiums and training centres was around 3390 crore, an increase of around
2160% from the original estimate. (Delhi 2010 commonwealth games, Bid document,
Indian Olympic association, 2003).
2. The promise of creating around 2.5 million jobs was way off the mark. Research
has shown that there is an immense loss in livelihood due to displacement of
people arising due to destruction of slums and the number of jobs created is
“ridiculously low” (Shivani chaudhary, 2010) when compared to the amount of
money invested in these mega sporting events.
3. The Ministry of tourism had estimated that 100,000 tourists were expected to visit
Delhi for the CWG.4
However, this was an overestimation and research in this
field has revealed that the boom in tourism is only short-lived and the concept of a
tremendous increase in revenue due to tourism is highly superficial.
o 4
“Commonwealth games: Whose Wealth? Whose Commons” Shivani Mishra et
al, 2014
o 4
Press Information Bureau, Govt. of India, November 4, 2009, http://www.pib.nic.in

5
This trend of first inflating the number of foreign tourist arrivals and exaggerating the
impact of the event on the tourism sector and then admitting that fewer tourists (compared
to the initial forecast) are expected is part of a strategy by organisers and the host
government to “sell” the Games.
4.
Last but not the least is the claim of beautification of the city of Delhi. This paper
has proven this claim wrong on account of the severe human costs of
beautification like the destruction of the slums leading to displacement and loss of
livelihood of a lot of people, confinement and arrests of “beggars” and homeless
people, inconvenience caused due to the construction work, etc.
 The next objective of my study is to find out whether the commonwealth games left
a lasting legacy on the city of Delhi and I’m going to look mainly at the social
legacy that the games left behind.
“The 2010 Commonwealth Games: Whose Wealth? Whose Commons?” by Shalini
Mishra, Shivani chaudhary and Miloon Kothari, May 2010 analyses the many dimensions
of negative social legacy that these games left behind. Clearly, it was not an ideal situation
for the majority and it did more harm than good. The officials try their best to hide this trend
of “over-estimated benefits and underestimated costs of hosting,” (Harada Munchiko, March 2005).
“We will make double the money that we will spend. It is a win-win situation for the host country”
(The rediff interview, January27, 2004) were the exact words that came out of Suresh
Kalmadi’s (president, IOA) mouth but contrary to what he had said the only parties to benefit
from these games were the real estate players, Commonwealth Games federation, Tourism
sector, hospitality sector, sports infrastructure companies, etc. The Games have left a very
bitter taste in the mouths of the urban poor as there have been evictions of slum dwellers and
their homes have been demolished. Street vendors and hawkers have been displaced and with
it their livelihoods. Beggars and the homeless are being arrested to make sure Delhi is devoid of
them in the quest to “beautify” the capital. There are also evidences of rampant exploitation
of the workers in the form of low wages, lack of proper housing, hazardous working
conditions, etc.
5
Mega-events and Impacts on Tourism: The Predictions and Realities of the Lillehammer
Olympics, Jon Teigland, Impact Assessment and Project Appraisal, Volume 17,Number 4,
December 1999.

The following table shows the situation of homelessness in Delhi in 2010:
Source: “2010 commonwealth games: Whose wealth? Whose commons?”
The following table/flowchart showcases the negative legacy that the games left behind and
the state of affairs in the different sectors in the country when it bagged the responsibility of
hosting these games.

Source : “2010 commonwealth games: Whose wealth? Whose commons”, 2010
Therefore, we can conclude from studying all of the above papers that the commonwealth
games 2010 did more harm than good in light of the huge opportunity cost of capital (in a
developing nation) that was invested in these games. And we come to another important
conclusion that a developing nation like India was not equipped to take on the responsibility
of hosting a sporting event of such magnitude.

 The last objective of my study was to find out and give a brief account of the social
and economic impact of hosting the 2014 FIFA World Cup’s by Brazil and try to
draw a similarity with India.
“THE 2014 WORLD CUP IN BRAZIL: ITS LEGACY AND CHALLENGES” by
Human rights program coordinator Marilene De Paula looks at how the 2014 Fifa world cup
would enhance Brazil’s image as a nation recently marked by high rates of vilence and rising
social inequalities.
o The first thing that the paper looks at is the public debt and economics. The World
Cup was expected to inject 73.95 bn USD and also generate around 3.6 million jobs a
year. However, things did not go as planned as 12 of the host cities announced a 51%
increase in public debt.
Source: BNDES. Informe Setorial nº 29;
http://www.bndes.gov.br/SiteBNDES/export/sites/default/bndes_pt/Galerias/Arquivos/
conhecimento/setorial/Informe_29.pdf; accessed 29 August, 2014.
o The new jobs created were unsustainable thus slowing the economy down. Much like
India, it was found out that the workers were paid much less than promised with only
17% of them getting between the top wage of 520 USD and the minimum monthly
wage. This led to workers going on strike demanding the overtime pay and premium

rates which had been promised earlier thus eventually leading to delays in
construction. The lives of informal workers were affected severely as only a handful
of them were permitted to work near the stadiums owing to transport infrastructure
construction or refurbishment work.
o The next aspect assessed by this paper was the effect it had on tourism. Hotel
occupancy rates rose from the average rate of 61% to around 77 % on the days
preceding the world cup and on the days of the Games. Tourism was one sector which
was reported profitable during the event. Foreign tourists expressed their satisfaction
with the warm welcome that they had received. According to data released by the
Central Bank of Brazil, revenue generated by the foreign visitors shot up by 37.84%
when compared to the average revenue during the same period in the previous three
years.
o Next up are the urban transport infrastructure projects which were much needed
owing to the repeated complaints by the local commuters about the crowded and
uncomfortable trains and buses. In Fortaleza, the up gradation and transformation of
the existing rail network into a “metro standard” system cost an estimated 138 million
USD. However, construction was delayed and the system could not be ready for the
games. Recife’s LRV system came into effect in June with two working stations and a
one-way system. Passengers used this line a lot to travel to the stadium, Arena
Pernambuco during the Cup. Rio de Janeiro completed its construction project, the
BRT system from the international airport to the Maracana stadium and so did the
projects in Salvador and Sau Paulo.

Source: http://www.portaltransparencia.gov.br/copa2014/home.seam; accessed 22
August 2014
o Stadiums built or upgraded with public funding: The total cost of upgrading or
building the venues cost around 4.2 billion USD with virtually all of it publicly
funded. But much like India there is the fear of “white elephants” (madrilène de
Paulo, 2014). Brasilia’s stadium was by far the most expensive at a cost of 730
million USD. Arena pantanal, a stadium with a capacity of 41,400 cost around 310
million USD and the stadium at Rio de Janeiro had recently been refurbishedin 2007
for a cost of around 160 million USD for the pan American games.

Source: http://www.portaltransparencia.gov.br/copa2014/home.seam; accessed 22 August
2014.
So, after reading papers on the 2010 World cup and its effects on Brazil I can draw
similarities between India and Brazil on grounds of unsustainable jobs or employment created
during the games and workers not getting paid as much as they’d been promised, delays in
construction, a lot of the cities ending up in debt, costs much higher than what had been
estimated, up gradation of the existing public transport system, etc.

Research Objectives:
The main objectives that I want to achieve through my research are as follows:
1. The effect of hosting these games on the Infrastructure of Delhi.
2. Whether these games had a positive impact on the Tourism (No. of tourist arrivals and
tourism expenditure) of the state.
3. Employment in Delhi in the years leading up to the year of the games i.e. 2010 and
post that period.
4. The main source of funding in order to successfully host this mega-event.
5. Evaluate other qualitative aspects pertaining to the Games and the effect it had on
these factors.
Data Collection:
Data for the variables mentioned above have been taken from the yearly Economic surveys of
Delhi conducted till the fiscal year 2014-15.
Website:
http://delhi.gov.in/wps/wcm/connect/doit_planning/Planning/Economic+Survey+of+Deh
li/.
Data for various other variables like the GSDP, construction spending, hotels and restaurants
and no. of foreign tourist arrivals have been extracted from the Indiastat database.
Website:
http://www.indiastat.com.ezproxy.svkm.ac.in:2048/default.aspx
The time period I’ve looked at spans from 2003-04 till 2014-15 to make sure I cover the pre-
games, period of the games and the post games phase.
Methodology:
The methodology that has been used is a simple year on year growth analysis’ of the
variables chosen to evaluate the success of these Games and graphs showing whether these
variables had a positive effect on the economy or not. The time period that I’ve looked at
spans from 2003 when Delhi won the bid to host the 2010 Commonwealth Games till 2010

for some variables and 2014-15 for other variables to assess the long-term impacts of these
games. The main aspects that hosting an event of such magnitude affects are the
infrastructure of the city, tourism during and post the period of the games, employment and
other factors which might not be possible to quantify.
Thus the variables used to evaluate each of the above mentioned criteria’s are:
 Construction as a % of Gross state domestic product.
 Revenues earned by the hotels and restaurants as a proxy variable for tourism
expenditure and the number of foreign tourist arrivals in Delhi during and post the
period of the games.
 Employment rate (as a % of the total labour force) in Delhi from 2003-04 till 2014-15.
 Tax and non-tax revenues as a percentage of the total revenue receipts of the
government to find out the main source of finance for these games.
 Other aspects like forced evictions, displacements, exploitation of the workers, etc.
that are not quantifiable to bring out the overall effect that these Games have on the
economy as a whole.
The rationales behind choosing these particular variables to evaluate the impact are:
1. Infrastructure: Any mega-sporting event requires a large amount of sports
infrastructure adhering to very specific standards because of the wide array of sports
that are involved. For example, FIFA requires the host nation to have a minimum of
around 12 stadiums with a seating capacity of at least 40,000 (Robert Baumann et al,
2013). Each kind of sport will need a stadium of its own so hosting an event of such
magnitude in a developing country such as India is expected to incur a significant
amount of expenditure. Sporting infrastructure in India is not up to the mark and is
lacking in a lot of areas and thus, it was expected that hosting these Games would lead
to significant amount of constructions to build world-class stadiums and upgrading the
existing ones. Thus I have compared construction spending as a percentage of the
Gross state Domestic product from 2004 (the year after Delhi won the bid to host these
games) till 2010 and post 2010 to check for evidence of increased construction
expenditure.
2. Tourism and enhancing the Brand image of India: The 2010 Commonwealth
Games was expected to attract tourists from all over the world and let India enhance its
brand image as a country which could increase the number of tourists in the future if it

gave a good account of itself. Thus this increase in tourism would in turn increase
revenues through their expenditures. It is a fact that these mega-events result in a
significant increase in tourism expenditures but in a lot of cases the observed increases
in economic activity are overstated and fall well short of the numbers predicted by the
event organisers (Jonathan Barclay, 2012). Thus, I have looked at the number of
foreign tourist arrivals from 2007-08 till 2014-15 to check the validity of the claims
made by the organisers and I have chosen revenues from hotels and restaurants as a
proxy variable for tourism expenditure because of the unavailability of state wise data
for foreign exchange earnings to study the claims of increased tourism expenditure
during the year of the games.
3. Employment rate: Commonwealth Games 2010 was expected to create an
employment opportunity of close to around 24.7 lakh jobs. Suresh Kalmadi,
President of the IOA, is reported to have said about the Commonwealth Games,”
It’s a big business opportunity, many jobs for many young people”. (Shalini
Mishra, Shivani Chaudhry et al, 2010). Major chunk of the employment opportunities
open up in the construction, hotels and catering sectors, etc. However, mega-sporting
events in the past have shown that these numbers are over exaggerated. The Barcelona
Olympics of 1992 and the Salt Lake City Olympics of 2002 are well known examples.6
It is also said that the jobs created are temporary in nature and the number
“ridiculously low” when seen against the amount of money invested. Thus I aim to
look at the Employment rate in Delhi post 2003 till 2014-15 to establish a pattern over
this time period.
4. Main source of Funding: The total estimated cost of the games had almost tripled
and the measures taken by the organising committee would not be enough to yield
enough revenues immediately to bear these costs. Thus, there was significant amount
of borrowing from the public funds and financial institutions. This was typical of the
organisation of any other mega sporting event which leads to low returns, locked up
investments which have to be later funded by the citizens through increased taxes,
prices and cesses. Thus I’ve looked at tax and non-tax revenue as a percentage of the
total revenue receipts (which also include grants) and compared the figures for 4 years
6
2010 Commonwealth Games Delhi: How Much Does National Prestige Cost? Hazards
Centre, New Delhi, September 2007, page 38.

before and after the games.
5. Lastly I look at some aspects that were affected due to these games that are not
measurable for example, the loss of livelihood of a number of people due to forced
evictions and displacements without providing them with an alternate source of
shelter, exploitation of workers, etc.
Data Analysis and Inferences:
 INFRASTRUCTURE: The variable chosen to evaluate this aspect is construction
spending as a % of GSDP. Data has been looked at since 2003 when Delhi won the
bid to host the Commonwealth Games. The average construction spending as a
percentage of GSDP from 2004-05 till 2010-11 (the year of the games) was around
7.83 % and the mean rate post the games was only around 3.98 % so the
constructions that happened owing to the 2010 Commonwealth Games might have
contributed to the higher share in the state domestic product. Another observation
made was that the year 2009-10 had the highest amount of construction spending of
1137243 lakh rupees in the last 10 years or so which might be because of the delayed
and hurried constructions that happened towards the end to make the venues and the
Games village ready. A report released by the Indian Government showed that 13 out
of 19 sports venues were behind schedule.7
The first stadium was handed over for
trial runs only in July 2010 when all CWG projects were to be completed by May
2009. So this increased construction spending in the year 2009-10 can be attributed to
the fact that a lot of pending work had to be put to rest.8
The following table shows the construction spending as a % of GSDP over the last 10 years
followed by a graph highlighting the same:
7
"India admits 2010 Games problems". BBC. 15 September 2009. Retrieved 23 April 2010.
8
Times of India (29 July 2010). "14 Commonwealth Games projects under CBI, CVC scanner". The Times
of India. Retrieved 1 August 2010.

Year State Domestic Product
2004-05 10032452
2005-06 11040607
2006-07 12407958
2007-08 13796086
2008-09 15579109
2009-10 16863753
2010-11 18076539
2011-12 19027642
2012-13 20399317
2013-14 21999111
2014-15 23802650
0
200000
400000
600000
800000
1000000
1200000
Construction Spending (in lakhs)
Construction
Year Construction As % of GSDP
2004-05 975668
9.73%
2005-06 1020341
9.24%
2006-07 1058010
8.53%
2007-08 1068129
7.74%
2008-09 1104702
7.09%
2009-10 1137243
6.74%
2010-11 1027876
5.69%
2011-12 913317
4.80%
2012-13 827790
4.06%
2013-14 785001
3.57%
2014-15 828075
3.48%

 TOURISM: The proxy variable chosen to calculate tourist expenditure is the
revenue earned through the channel of trade, hotels and restaurants. Data has again
been looked at since 2003 till 2015. The following table shows the trade, hotels and
restaurant revenues followed by a graph which shows the trend over the years.
Year Trade, Hotel and
Restaurants
Growth rate over
the previous
year
2004-05 2106249
2005-06 2432584 15.49%
2006-07 2670022 9.76%
2007-08 3041866 13.93%
2008-09 3013451 -0.93%
2009-10 3048900 1.18%
2010-11 3402224 11.59%
2011-12 3072978 -9.68%
2012-13 3396935 10.54%
2013-14 3684230 8.46%
2014-15 3941373 6.98%

Thus, from the table above we see that the trade, hotel and restaurant revenues grew by a
staggering 11.6% in the year 2010-11 as compared to the previous year which saw a very low
growth of around 1.18% preceded by the year 2008-09 which experienced a negative growth
of around 0.93%. The year of the games i.e. 2010 earned revenue of Rs. 3402224 lakh which
is the highest amount of revenue earned in the last 6 years preceding the year of the games.
The reason for this can be attributed to the increased expenditure by the tourists who were in
the city during the Commonwealth Games.
The other variable that has been looked at to evaluate the effect of the Games on tourism are
the number of foreign tourist arrivals in Delhi and a comparison has been done with the pre
and post games phase.
However, contrary to popular belief we see a fall in the tourist numbers in the years 2009-10
and 2010-11 (year of the Games). The number of foreign tourist arrivals fell by around 3.3
% to around 18.93 lakh in the year 2010 from around 19.58 lakh in the previous year. This
decrease might be because of the “crowding-out” (Jonathan Barclay, 2010) effect where
sports fans can crowd out regular visitors who would’ve visited the city in the absence of the
event. There are substantial displacement of regular visitors who are deterred by the potential
for rising prices during the games because of high demand, overcrowding and other
disruptions. For example, the 2010 Football World Cup was predicted to have 483,000
international visitors but econometrics analysis showed an increase of only 120 to 200
thousand above what would’ve been normally without the Cup. (Matheson, Peeters, and
Syzmanski, 2012).
In this case, according to a tourism ministry statement about 4 lakh foreign visitors were
expected to visit during the 2010 Commonwealth Games but the immigration authorities at
the airport reported only about 75,000 foreign tourist arrivals.

Year Foreign tourist arrivals (in numbers) Growth rate over the previous year
2007-08
2018848
2008-09
2339287 15.87%
2009-10
1958272 -16.29%
2010-11
1893650 -3.30%
2011-12
2159925 14.06%
2012-13
2345980 8.61%
2013-14
2301395 -1.90%
2014-15
2346724 1.97%

 EMPLOYMENT: The data for employment retrieved from the Economic Survey of
Delhi 2014-15 has been looked at since 2004 till 2014-15. The total number of
unemployed people has not gone down by a significant number in the years leading
up to the games and there is no definite trend that can be observed. However, we can
see that post the games i.e. post 2010 there has been a constant increase in the number
of unemployed people, a part of which might be because of the number of temporary
jobs created prior to the games in the construction and hotel & catering sectors which
were terminated with the conclusion of the Commonwealth Games. Thus it has been
proved that the promise of jobs and the prediction of a growth in the job market are
mostly exaggerated by the organisers of mega-events.

 Funding for the Games: As discussed earlier the estimated cost of organising
these games had gone up by almost three times which had to be financed by
borrowing from public funds and financial institutions. Thus this would later take a
toll on the citizens through an increased tax rate, prices and cesses. From the table
below, we see an increase of around 23.34% in the percentage of share of tax
revenues of the government in total receipts in the year 2011-12 (the year post the
CWG) and the percentage share in total receipts has been high since then contributing
to above 90% of the total share.
(in Crore)
Year Tax revenue Total revenue receipts
% share of tax
revenues in total
receipts
2003-04 5884.17 7348.53 80.07%
2004-05 7106.13 8562.63 82.99%
2005-06 8939.28 10843.53 82.44%
2006-07 10155.8 12193.61 83.29%
2007-08 11782.8 14912.39 79.01%
2008-09 12180.7 16352.21 74.49%
2009-10 13447.86 20451.34 65.76%
2010-11 16477.75 25024.1 65.85%
2011-12 19971.67 22393.17 89.19%
2012-13 23431.52 25560.97 91.67%
2013-14 25918.69 27980.69 92.63%
2014-15 26602.34 29584.49 89.92%

Graph showing the increase in the share of tax revenues in total revenue receipts post
2010-11 to help finance the increased borrowing prior to the games to meet the excess
spending that had taken place.
 Other Aspects: There are some other negative social legacies that the commonwealth
games left behind, most important of which were the forced evictions and the
exploitation that the workers had to face. Some of the examples of forced evictions
that can be directly attributed to the CWG-related projects are:
1. In 2004, more than 35000 families living along the banks of the Yamuna river were
evicted in order to facilitate a tourism project on land that is adjacent to the
Commonwealth Games Village9
.
2. The settlements at Banuwal Nagar, Vikaspuri were demolished keeping in mind the
Commonwealth Games in the year 2006.
3. In June 2009, the Municipal Corporation of Delhi demolished a slum near the
Jawaharlal Nehru Stadium where people had been living since 1998. This was done
mainly to make way for a parking lot in view of the Commonwealth Games.
9
Swept Off the Map: Surviving Eviction and Resettlement in Delhi, Kalyani Menon Sen and Gautam Bhan,
Yoda Press, 2008.

4. The MCD demolished a settlement of around 350 slum houses in Kirti Nagar in 2009
and also one near Loli Colony for a parking lot for the opening and the closing
ceremony.10
These are few of the many examples of forced evictions that took place before the games in a
quest to beautify the city but the main problem lay in the fact that there were no proper
arrangements for resettlement of these people. The conditions in the areas of resettlement
were inadequate. Most of these areas were on the outskirts and the residents would not have
access to basic services and many have lost education opportunities because of relocation.11
The Delhi Chief Minister, Sheila Dixit, has acknowledged that, “We will have about 30 lakh
homeless in the city after the Games. This is a serious concern. Housing for them will be a
priority after the Games. But according to my analysis this promise was not kept.
The other negative impact left behind was blatant exploitation of the workers in the form of
low wages. For example, unskilled workers were paid Rs. 85 to 100 as against the stipulated
minimum wage of Rs. 142. They were not given any travel allowance. The wages were not
paid on time and there were improper arrangements of housing for migrant workers brought
in to work for the CWG. Workers were not given basic safety equipments, etc.
LIMITATIONS:
One of the main limitations of my study is the fact that there might be a number of factors at
work driving the increase or decrease in my variables and to attribute all the movements to
the commonwealth games would not be correct. We can only say that the games were a
significant factor contributing to the movements in these variables. Another limitation arose
while calculating the effect of the CWG on tourism expenditure. We did not have much
information if the external visitors were in the city for the games and the inclusion of all
foreign tourists visiting the city in the study may have resulted in exaggerated figures if they
were in the city for alternative reasons. There are a lot of intangible benefits that hosting
these games brings to a nation like the perceived status benefit, ‘restoration of self-pride’,
‘civic pride’, etc. which are not quantifiable and go unanalysed.
10
Waiting for Relocation, Hindustan Times, April 5, 2010.
11
Restructuring New Delhi's Urban Habitat: Building an Apartheid City? Housing and
Land Rights Network, Delhi, 2002.

CONCLUSION
The CWG 2010 did more harm than good to the economy of Delhi. The analysis done above
has shown the same. The promises that were made by the organisers were not fulfilled and
the numbers were exaggerated by the organisers to show themselves in good light whereas
the games were laden with delays, scandals and corruption. The benefits of hosting a mega-
sporting event are highly exaggerated whereas the numbers if studied carefully indicate that
there isn’t much of a positive impact that these games leave behind. The only parties which
benefit from these games are the construction companies and contractors, hospitality sector,
media and obviously the Commonwealth Games federation. The negative social legacies that
these games leave behind are also massive though they cannot be quantified. And lastly, as
pointed out previously too, India was probably not equipped to hold an event of this
magnitude and with the prevalent levels of poverty in the country the opportunity cost of
capital was tremendous and according to me there are other pressing issues to be addressed in
this country before they go on hosting something this big.

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