Central Idea

Prime Minister Modi recently confirmed India’s formal bid to host the 2036 Olympic Games, raising questions about the financial implications and benefits of hosting this prestigious event.

About Olympics

Origins	Began in ancient Greece in 776 BCE in Olympia.
Revival	Revived by Pierre de Coubertin in 1896 in Athens, Greece.
Five Rings	Olympic flag features five interlocking rings representing unity among 5 continents.
Olympic Motto	“Citius, Altius, Fortius” (Faster, Higher, Stronger) reflects the pursuit of excellence.
Sports Included	Features a diverse range of sports, from athletics and swimming to archery and gymnastics.
Discontinued Sports	Some sports, like tug of war and live pigeon shooting, have been removed.

International Olympic Committee (IOC) Decision: The host city is chosen by the International Olympic Committee members through a secret ballot, with the majority vote determining the winner.
Competition and Diplomacy: Securing the opportunity to host the Olympics involves significant financial resources and diplomatic efforts. Typically, winners are announced 7-8 years before the event.

Olympics

Expensive Endeavor: Bidding for the Olympics is a costly proposition, with countries spending $50-100 million, even for unsuccessful bids. In case of a successful bid, the expenses can soar into billions of dollars.
Examples of Expenditure: Tokyo spent $150 million for its failed 2016 bid and even more for the successful 2020 bid. Toronto refrained from bidding due to the $60 million cost for the 2024 bid.
Infrastructure Investment: Hosting the Olympics entails building stadiums and enhancing infrastructure to accommodate athletes and tourists.

Local Government Responsibility: The majority of expenses, especially on infrastructure, are shouldered by the local government and are spread across the country’s budget.
Borrowing for Cost Overruns: Countries often resort to borrowing to cover cost overruns. The IOC contributes some revenue to the host country, but it constitutes a relatively small amount, e.g., $1.5 billion for Rio De Janeiro in 2016.

Benefits of Hosting: Hosting the Olympics elevates a country’s global status, promotes it as an investment and tourist destination.
Cautions on Overspending: Excessive spending can have dire consequences, as seen with Canada’s 30-year debt from the 1976 Montreal Games, the impact on Greece’s financial crisis after the 2004 Athens Olympics, and Rio’s $900 million bailout request from the Brazilian government.
Positive Outcomes: In some cases, such as Beijing, hosting the Olympics led to significant GDP growth acceleration, by at least 0.8%.

Favorable Timing: India’s bid aligns well with its status as the world’s most populous and fastest-growing major economy.
Past Experience: Having previously hosted the 1982 Asian Games and the 2010 Commonwealth Games, India possesses a favorable track record, which the IOC takes into consideration.
Gujarat’s Bid: Gujarat is contemplating bidding for the 2026 Commonwealth Games, which could further demonstrate India’s hosting capabilities.
Economic Power: India’s ascent as an economic powerhouse enhances its candidacy’s appeal to other nations.

While India’s bid to host the 2036 Olympics presents an opportunity to boost its global profile and economic prospects, it is essential to strike a balance between ambition and fiscal prudence.
The economic implications, positive and negative, of hosting such a monumental event should be carefully evaluated to ensure that the effort and investment yield substantial long-term benefits for the nation.