The Cricket World Cup currently taking place in India is predicted to have a substantial impact on the country’s gross domestic product (GDP), with an estimated additional output of approximately Rs. 18,000-22,000 crores. According to a report by economists Jahnavi Prabhakar and Aditi Gupta from Bank of Baroda, the gross value added (GVA) is anticipated to increase by around Rs. 7,000-8,000 crores. Furthermore, the report suggests that this economic boost will have only a minimal impact on inflation.
“In terms of its effect on GDP, we estimate that the Cricket World Cup will contribute an additional output of Rs. 18,000-22,000 crores, leading to an estimated increase in gross value added of approximately Rs. 7,000-8,000 crores. This represents incremental GDP driven primarily by expenses related to the event,” stated the economists in their report titled ‘Hitman and King’s Cover Drives to Boost India’s GDP.’
The report acknowledges that services inflation may be affected, particularly due to increased prices for airline tickets, hotel accommodations, and related expenses. Additionally, it notes that prices charged by the informal segment of the services sector (which is not tracked in the Consumer Price Index or CPI) could show a significant increase.
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However, the impact of these factors is expected to be limited to the ten cities where the matches are held and is primarily concentrated during the months of October and November. As these trends align with the seasonal impact of the festival season during these months, it may be challenging to disentangle the impact of the World Cup from general seasonal spending. The report suggests that the upward bias in inflation due to these factors could range from 0.15-0.25 percent for these two months, without isolating the festival spending impact.
The Cricket World Cup spans 45 days and includes 48 matches played by ten teams.
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“We estimate that at least approximately 2.5 million people will attend the sporting extravaganza at the ten venues across the country for the 48 matches. Moreover, a much larger global audience is expected to watch this highly anticipated tournament from their homes,” the report highlights.
The report provides tentative expenditure estimates in various categories:
- Ticket sales: Rs 1,600-2,200 crore
- TV Rights/Sponsorships: Rs 10,500-12,000 crore
- Team Spending: Rs.150-250 crore
- Foreign Tourists: Rs 450-600 crore
- Domestic Tourists: Rs.150-250 crore
- Gig Workers/Event Management: Rs 750-1,000 crore
- Merchandise: Rs 100-200 crore
- Spectator Expense: Rs.300-500 crore
- Screenings and Food Delivery: Rs 4,000-5,000 crore
The base case scenario totals Rs. 18,000 crores, while the optimistic scenario reaches Rs. 22,000 crores.
Additionally, the government is expected to increase its tax collections through various means, including ticket sales, GST on hotels, restaurants, and food delivery, among others. These GST and tax collections throughout the event across different categories are anticipated to bolster government revenue, providing the government with additional fiscal space, as stated in the report.
-IANS
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