Blurb: Why is a seemingly trivial issue of terms of employment of sports federations such a hot political potato? The trail of money may yield some clues.
The recent announcement by the Sports Minister Mr. M.S.Gill, on the tenure of sports administrators, has generated a controversy. The facts do not justify the reaction. The reality is as follows: the terms of sports administrators has been reduced to a maximum of 12 years. Since sports organizations are not part of the government – indeed, we all want the government to stay out of other people’s business – then what right does the government have in stipulating how many terms an elected sports official can serve? She should be able to serve as long as she wants, and even bequeath it to her daughter if need be. If politicians can do that, why not mere administrators? What arrogance on the part of the government to control life-time tenures.
That would be a hasty judgment – and incorrect. For reasons, let us follow the trail of the money. First question: why does everybody assume that with sports administrators some hera-pheri is involved. I mean, how much corruption can there be in a cycling federation of India? In France, perhaps; in India, not possible. If no corruption, then it most likely the case that the sports administrator is there, serving his term for a pittance of a salary. And why? Because he really really loves the sport.
This would be plausible if ex-sportsmen headed sport organizations; obviously, after they retire. But such a person does not exist. Instead, sports organizations are headed primarily by politicians, and in some cases, by bureaucrats. Why? For ex-bureaucrats it does make some sense, because after a lifetime of employment they are out of a job; but a politician, especially one serving the people and otherwise very busy doing so, why this passion with heading up a mere sports organization?
Maybe it has something to do with the tax status of sports organizations (hereafter, SOs). These SOs are granted tax exemption by the government of India, and indeed, in most parts of the world, this is the case. This tax exemption is granted because sports is considered a “public good”. The tax exemption does not mean that anybody working in these SOs is not taxed; all wage and salary employees are taxed on their income, as they should be. But if income received by an organization (from government donations, advertising revenue, tournament sponsorships, etc. – just think about the revenue that the BCCI makes from such activity and you will have a good idea) exceeds its wage expenses, coaching expenses, scholarships to athletes, upkeep of the buildings, renovation of the stadiums etc., then this income is not taxed. All the SO has to show is that such excess income is earmarked for expenses related to the sport and the income can be held in a bank account, underneath the mattress or wherever, until the expense takes place. All the organization has to do (remember its head is a bureaucrat or a politician) is to convince the tax authorities that the SO honestly intends to spend the money on the sport at some future date.
This background can help explain several “surprises” in the way sports organizations are administered in India. Every rupee spent on the athlete’s well being is that much less for the organization; every rupee spent on hiring an expensive coach is that much less; every rupee spent on renovating a stadium is less excess money for future deployment. It also helps to explain why there are no sportsmen heading such bodies – they are at the end of a long queue of people who desperately want the extra “job”.
In this context, it is a bit “rich” for evergreen sports administrators to cite the case of the International Olympic Committee’s ex-chairman Samaranch, as a father figure model for the children to follow. He did stay on the job forever, but he also contributed to the “Olympic” movement. He made the Olympics profitable ; very few of our SOs can claim a profitability for their domain. The internet is replete with allegations of corruption in the hallowed (hollow?) halls of Samaranch’s IOC. And a rule was passed in the late 1990s prohibiting a Samaranch like repeat – no president of the IOC can serve for more than 8 years.
Thus, there is virtually no case for the Congress party or the Prime Minister to not implement Mr. Gill’s recommendations with immediate effect. The ruse of the Commonwealth games not being held in Delhi because the Commonwealth games organizers will be upset is both hugely funny, and even more insulting. The example cited is that of Kuwait, a country of 2.7 million people. Think
about it – would China allow such grotesque interference in the appointment of its officials? The Commonwealth games allegedly will not be held in Delhi because the Commonwealth committee feels that its nobility and trueness and independence in appointing administrators is being questioned? And that after the Indian allowance, due to some excessive liberalness on Mr. Gill’s part, is 12 years of ownership rather than eight? If the Commonwealth committee feels so upset, why doesn’t the Indian government tell them to go fly a kite in their kite organization. If the government does not do so, then a legitimate question will be asked: why is the emerging power so intimidated by a mere sports organization? What will it do when it has to take a stand on some real issues of international power and diplomacy? Will the real paper tiger please stand up – India or the Commonwealth Federation, or whatever it is called.
The author is Chairman of Oxus Investments, an emerging market advisory and fund management firm. Please visit www.oxusinvestments.com for an archive of articles etc; comments welcome at surjit.bhalla@oxusinvestments.com
Blurb: The BCCI is projecting itself as the good mother with an errant Modi child. Nothing could be further from the truth.
The advantage of a story breaking out much before the time due for the fortnightly column is that it provides for time for reflection; and synthesis. Collating all the pieces together, this is what emerges.
First, the BCCI or Lalit Modi is not the creator of the IPL concept. Both have been credited with this innovation, and some have even called Modi a genius in this regard. By doing so, analysts and commentators are missing out on a critical element in this seedy and sorry saga. The IPL concept was introduced into India by the ICL, the Indian Cricket League. The ICL contracted players, Packer style, and the T20 league was on. Somewhat later, the BCCI woke up and muscled its way into the concept, and the ICL was muscled out. ICL was promoted by Zee Sports so the question arises as to why did they just roll over when the BCCI said boo? Because BCCI was exercising its monopoly power as the sole promoter of cricket in India.
BCCI said, quite simply, that a player who played in ICL would not be eligible for playing for India’s national cricket team. The often holier-than-thou but equally monopolistic ICC backed the BCCI and supported the decision that any player playing for the “rogue” league would not be eligible to play for national teams. And where were our much vaunted politicians who are so eager to clean up the Modi nay BCCI mess? In full support, lined up behind BCCI, with 17 of the 23 odd cricket associations in India headed by their multi-faceted tribe. These office bearers belong to all the parties and my guess is that the “ownership” of these district cricket associations, and BCCI, is distributed as the seats in the Lok Sabha i.e. Congress/UPA and the BJP/NDA have the largest ownership of cricket in India.
Why one might ask are the Indian politicians so bothered about promoting cricket in India when they, by their own admission, are overburdened with work and especially work that is in the service of the nation? Because the BCCI was, until last year, treated like an NGO by the Indian government i.e. its earnings were not taxed, because like the Ministry of Defence, the work that BCCI did was paramount to national interests. This meant that all income of the BCCI, as long as it was ploughed back into the development of cricket, was not taxable. In 2000, in a landmark judgment, the court ruled in the case of Rahul Mehra et. al. vs. Union of India, BCCI and DDCA, that the BCCI was accountable to the citizens of India regardless of the “pioneering” ways in which it served the cause of India. This suit also contained this nugget of information: in at least some years preceding 2000, DDCA received more revenue from the sale of old liquor bottles on its premises than it spent on coaching facilities! There is a partial happy ending to this horror story: last year, the Government of India ruled (give credit where it is due to the bureaucrats in the Ministry of Finance and some upright politicians) that the BCCI was no longer eligible for tax-free status.
In the meantime, BCCI has become the worlds fattest cricketing body, and in the wake of the IPL scam, the pertinent question is: what should the Government of India do to make the right the several wrongs of the past? That is not possible. But something can be done for the future of Indian cricket, for the future of justice and fair play, for the future of institutions in India. The solution is as straightforward as it is transparent. It is to denationalize the BCCI, yes, denationalize. At present, it has all the monopoly advantages of being a government body without any responsibility or accountability. There is also precedence for such a policy elsewhere in the world, especially in soccer. Teams are publicly listed companies and the people are the shareholders. Let us see how many politicians want to get into the rough and tumble of competitive markets, as opposed to the hiding behind the veil of serving the cause of the nation via a monopoly.
The IPL crisis should be viewed as a Modi given opportunity for cleaning up the stables. At present, the BCCI is behaving like a good mother disciplining an errant child. As late as now, Modi wanted to reveal the names and details of ownership of the teams. Where was Modi for the last three years? As late as now, the BCCI wanted to study the legal implications of making the ownership public before making it public. The point of view of both the mother and child is laughable, but here the mother is clearly much more in the wrong. This fact should not go unnoticed.
Also, a final plea as a cricket fan. How come no one has really protested about the absolutely shoddy nature of the “new” Ferozshah Kotla stadium. No matter whether you view the cricket from the cheapest or the most expensive seats, the stadium is an embarrassment. Couldn’t some of the “in the name of promoting cricket” money have gone into building a stadium that is representative of the capital city of the new India? Does it not matter that there is only one scoreboard at the Kotla grounds and that half the stadium cannot see it? Something about the oh-so cricket loving corporate sponsors: you cannot see the scoreboard (remember there is only one) from their cushy seats. Does it not matter that no attempt is made to create an environment where one can go to enjoy the experience of watching cricket, even the IPL. Has any member of the BCCI, or for that matter the Lok Sabha, seen a worse stadium in the world, let alone in India? Why has this gone on for so long without question or accountability? A legitimate question: where has all the revenue from selling old liquor bottles gone?
The author is Chairman of Oxus Investments, an emerging market advisory and fund management firm. Please visit www.oxusinvestments.com for an archive of articles etc; comments welcome at surjit.bhalla@oxusinvestments.com
Bis-mil-alHifazat, “I begin in the name of security”, has become the new slogan for a mindless, anything goes policy.
Just when it was safe to conclude that the Home Minister, Mr. P.C. Chidambaram, will go down in history as the best Home Minister India has had, along comes news that not one player from the champion T-20 team, Pakistan, has been chosen to play in the T-20 IPL (Indian Player League) tournament.
The official version of what happened is murky. The sports minister, Mr. M.S. Gill, claims that no directive was given to the Board of Control for Cricket in India, BCCI to introduce any such ban; the equally murky BCCI claims that there were both security concerns, and visa probabilities, with regard to the Pakistani players. So all the Pakistani players fell into the cracks and could not be recovered.
Given that the Sports Ministry does not know what is going on, and the Home Ministry is the holy security cow – don’t question, don’t ask – perhaps the Foreign Ministry will know what is going on. But this Ministry has been concocting visa laws for entering India that would shame both Goebbels and Kafka. The rules bar tourists from returning to India within two months of the first visit. There are two possible explanations for this pioneering policy (cannot find any other country that has tried this novel approach to fighting terrorism). The first explanation rests on the proposition that a prospective terrorist will be caught if she applies for a business visa. So a big step forward for Indian security. The would be terrorist will have no other option but to apply for a tourist visa. That the Ministry will grant. The expectation is that all tourists, sorry terrorists, first come to India a la Headley to reconnoiter and study the various angles of photography. Once they have “cased the joint” they will go back for more advanced planning. But the objective of preventing terrorism would have been achieved. We know that there won’t be an attack in the subsequent two months, don’t we? What happens if the terrorist returns after 2 months and 1 day?
The role of the Home Ministry in banning Pakistani players is not discussed in the newspapers, the Foreign Ministry, after doing all the work on the ideal visa policy is too tired to even think about communicating a new policy, let alone implementing it. Hence, it is not to blame for no Pakistani being selected since it did not communicate any orders to the IPL.
The buck then passes to the BCCI, a body not known for much else than making monopoly profits. Has anyone been to Ferozshah Kotla after its renovation? I have yet to go to a stadium in worse shape, and that too in the capital city, and built by the richest sports monopoly in the world. This arrogance was followed by preparing a disastrous pitch for a recent Test match, which was followed by the even bigger arrogance of not holding their subsidiary DDCA accountable.
The BCCI is blaming the government for giving it a shadowy signal regarding the probability of visas for the Pakistani players. But perhaps it was elements within BCCI who, for reasons of false patriotism (read reactionary prejudice) wanted to punish the Muslim Pakistanis. How could the BCCI lose by selecting the Pakistani players? There would have been no cost involved since contracts are subject to visas being obtained. Further, the Government’s bluff, of not interfering with IPL, would have been called. A check and balance on the arbitrary arrogance of the government would have been obtained.
Perhaps it was popular sentiment that did it. The politicians believe that after the terror attacks of last year, the popular public wants to punish all Pakistanis, regardless of race, color, or religion. Even if the public thinks that way, does it make sense for the government to cater to such base instincts? Another possible explanation for the actions of the government is that they are concerned about the safety of the Pakistani players, especially since Mumbai politicians have warned of possible attacks. We also have the Congress Chief Minister of Maharashtra flip-flopping over requirements of taxi-drivers in Mumbai. Just comprehend the magnitude of the CM’s statement. All taxi drivers in Mumbai will have to know the local language, Marathi. Now Mumbai is not another country. If the Congress gives in to domestic terror tactics, then what is to stop the Mumbai politicians from demanding that visitors to Mumbai, from other parts of India, have tourist visas and workers obtain work permits?
Could it be that the saga of the IPL selection is akin to the leaked letter from Jairam Ramesh to the PM, Manmohan Singh? That letter signaled a change in India’s approach to climate change, and it was speculated, at least in this column, that this was a near “perfect” way to change policy. The debate gets into the open, there are no hard feelings, and policy gets changed. This time around, everyone feigns ignorance, I didn’t do it, you didn’t do it but the dastardly deed gets done. So after circling around, we come to perhaps the responsible party – the ruling Congress regime.
The sad truth might be simple: this government is possessed with hubris; in simple English, unlimited arrogance. The decimation of the major opposition party BJP, the extinction of the fringe party Communists, has seemingly left Indians with the option of no one but the Congress. Hence, it can do what it wants. If there is a food shortage, don’t release the piled up stock of reserves which were created to counter just such an emergency. No matter if there is high food inflation, the people will still vote you in. If the Mumbai politicians object, give in to their extraordinary demands and threats. Have no logic in the policy on visas. If someone even dares to question anything that the Congress party and its leaders have done over the last sixty years, then censor them, even if it is a guarded comment by one of your ministers. And remember, there was no such person as Narasimha Rao, even though it was under his leadership that the country changed, and the policies of the government changed.
The author is Chairman of Oxus Investments and anchor of Tough Talk, a talk show on NDTV profit; please visit www.oxusinvestments.com for an archive of articles etc.
This is the first of a small series of articles on what we Indians enjoy the most, and what ails us the most. We are not talking Bollywood because more often than not we don't enjoy it so much, and there is not that much that ails it except its method of financing. We are not talking politicians because while they certainly ail us, we don't enjoy them so much; except perhaps the comic brilliance of Laloo Yadav. There are enough hints here to warm our imagination, if not our pockets. What ails us the most is the BCCI, not the upstart, corrupt, failed, terrorist financing Pakistani bank of yesteryear, but a 75-year old hallowed (though not financially hollow) institution called the Board of Control for Cricket in India. It combines Bollywood in that it finances cricket, the same game we enjoyed before it became a political statement. And it literally combines Mr. Yadav, who, in something that would do Mr. Ripley proud, is the head of the Bihar Cricket Association.(Business Standard, November 27,2004).
No matter what criteria is used, Mr. Vajpayee’s invitation to General Musharaf to discuss Indo-Pak relations, passes the genius smell test. In words that came from his own heart, rather than the stone of a diplomat, Mr. Vajpayee made clear that he was going for broke – and going for surgery – and going for a future to be manned by individuals born after the partition of 1947. In this future, the glory of a united India was only in the memory of those scarred by the pains of partition. It is important to recognize the origins, and the reasons, for this pain; but equally important to ignore the perspective of the dead.
There are two kinds of ratings that are in the news today – the ratings of a mutual fund , namely Mom and Pop’s very own, UTI-64, and ESPN cricket ratings, which is desperately trying to get Mom and Pop status. It just so happens that financial markets and cricket are two major interests of mine, but that is not the only reason for examining them jointly. It is rather recognition of the fact that mutual fund ratings move vast amounts of money; and cricket ratings move hearts, and minds, and sponsorships. And just like mutual fund performances, and ratings, are regulated by SEBI, so it might be time for cricket ratings to be regulated!
There is no fan I know of, including my 11 year old son, Sahil, who does not constantly calculate the possibilities of his team's performance, and of his team winning the World Cup. We do it in different ways, but not necessarily in a less accurate manner. To every person who criticizes the market because illiterate peasants do not know calculus to calculate marginal costs, remember the simple truism - they act as if they knew calculus. Same with probability forecasts - no rocket science to come up with a legitimate, defensible view. Which is why the match-fixing scandal was such a shock to sports fans (excluding the sport administrators and some players). How dare they mess up our innocent fun.
