Cricket World Cup to have $2.5b impact on Indian GDP, says report

The Cricket World Cup being held in India will impact the country’s gross domestic product (GDP) with an additional output of about Rs18,000-22,000 crore and the gross value added (GVA) will be about Rs7,000-8,000 crore and will have a very minimal impact on the inflation, said a report by two economists of Bank of Baroda.

“In terms of impact on GDP, with an estimated additional output of Rs18,000-22,000 crore attributed to the World Cup, the impact on gross value added is estimated to be around Rs 7,000-8,000 crore. This will be incremental GDP at the primary stage of expense,” said economists Jahnavi Prabhakar and Aditi Gupta in their report ‘Hitman and King’s cover drives to boost India’s GDP.’

According to them, services inflation will be impacted for sure as prices of airline tickets, hotel accommodation, etc. have gone up for this period.

Also, the prices charged by the informal segment in the services sector (which is not tracked in the CPI index) would show a substantial increase.

“However, this would be restricted to these 10 cities (where matches are held) for the period of October and November only. As these trends are also witnessed during these months due to seasonal impact of festival season, the impact of the World Cup could be hard to separate. The upward bias in inflation on this score could be between 0.15-0.25 per cent for these two months (without separating the festival spending impact),” the report said.

The tournament is spread over 45 days with 48 matches between 10 teams.

“We estimate that at least around 2.5 lakh people are set to witness the sporting extravaganza at the 10 venues across the country for the 48 matches to be played, while even a larger number is expected to watch the highly anticipated tournament from their homes across the globe,” the report notes.

According to the report, the tentative expenditure under various heads are: Ticket sales $200 million, TV Rights/Sponsorships $1.5 billion; Team Spending $2.5 million; Foreign Tourists $5 million; Domestic Tourists $20 million; Gig Workers/Event Management $100 million; Merchandise Rs15 million; Spectator Expense $30 million; Screenings and Food Delivery $500 million. The base case scenario total comes to $2.2 billion and the Optimistic Scenario total is $2.5 billion.

Agencies