Tuesday, April 5, 2011

Is enriching Dhoni the purpose behind taxation?

While I am delighted that I got to witness the Indian Team finally lift the much coveted Cricket World Cup, I agree with the sentiment that it is absolutely ridiculous for the politicians to dole out cash rewards to the team from the state coffers.

The cash rewards announced till date include a total of Rs. 6 crores (sixty million) by the Delhi government and Rs. 2 crores (twenty million) each by the Maharashtra and Punjab state governments. The players will also be able to avail free First Class AC travel on any Indian Railways route. A much less known fact is that the government has already forgone a tremendous amount of tax revenue by granting the ICC a tax waiver on its income from the World Cup. Some estimates put the tax waived at a whopping Rs. 45 crores (450 million). <link here> I think that this waiver itself was a mistake and further gifts from the honest taxpayers’ money are unwarranted.

I do agree that the players have achieved something significant but I do not think that they deserve to be specially rewarded with cash. The governments should follow the established practice and can confer the Arjuna or maybe the Padma awards (which by the way I think should be reformed) as recognition of their achievement. Though the amounts are not a significant proportion of state budgets, almost all the states are debt ridden and could use these funds for better purposes elsewhere. The most interesting justification I have heard is that handing out monetary awards is the politicians’ way of thanking the players for taking the spotlight off all the scams. Oh and I haven’t even yet started on how miserably the state fails to promote and develop other sports….

I strongly recommend the ‘The Acorn’ article <link here> which brilliantly makes the case against cash rewards by showing how they are akin to the medieval practise of kings handing out gifts. A quote from it -

India’s treasury is not their  (politicians’) personal purse to do with as they please. They are the custodians of the taxes we pay to be used for purposes we have pre-approved.

Some critics have gone on to say that the players should not even be specially rewarded by companies or the BCCI. I strongly disagree with this. The most important BCCI revenue source is the sale of television rights and they are worth more as long as the national team plays well. So it is reasonable that they award the players and the supporting staff which brought home world cup glory. The BCCI has no obligation to support other sports. Though a case could be made that they should use the money for supporting grassroot cricketers, it is not a strong one. Cricket continues to flourish and there are many patrons who organise local tournaments without needing BCCI support. Similarly, companies and brands have much to gain by associating with the World Cup heroes. The socialist argument that they should refrain from enriching the cricketers who are rich already does not appeal to me at all.

Lastly, while the mood of national pride over our worldcup victory still persists, you should take your time out to find out if you are as disappointing a fan as this article suggests all Indians are. <link here> I don’t agree with most of it but it is an engrossing and interesting read anyway. Hope you enjoy reading it!


  1. I am totally against anybody giving Cash awards to them. If they are in need of cash, then its a different story, but the Indian Cricket team does not have that problem I suppose. Not even the fringe players for that matter. Cash is rolled out just to make themselves popular. It can definitely be put to better use than this.

  2. Dhoni's brand value is currently pegged at 450 cr up from the already unthinkable 260 cr........why do these politicians think of doling out 2 cr cash rewards? Gaining free credits(here political mileage) is the bread and butter of today's generation(here politicians)..............The money could be better spent in improving sports facilities at grassroots level........I really see no point in giving to those who are already blessed enough............like that case of Abhinav Bindra's gold medal win. He was awarded cash reward after he won the gold and not when he was training overseas at his own expense.......f*****g politician dogs

  3. @Deepen:
    Why shouldnt BCCI give them cash rewards? Isnt BCCI like their employer? Why cant you see it as a sort of performance linked bonus?

  4. Agreed without a question sagar. While I am all for all sorts of advertisements and other cash benefits private companies may offer the cricketers in hope of profits, the government should keep its hands off handing out benefits to cricketers.
    Just a minor question out of curiosity: if the Indian hockey team which needs better players to regain its lost glory was to win the world cup tomorrow (lets just assume God felt like having some fun) would you then be alright with government doling out benefits to them because as a country we are no longer as obsessed with hockey and the good players do not have much monetary incentive to join the team or continue playing.

  5. No, I would not. Would you be ok with that?

    I am opposed to direct cash handouts for any players. The market forces will take care of the hockey players if they win the World Cup or the Olympic Gold Medal. I remember reading that a few of the 2008 Olympic Medal winning wrestlers and shooters got some ads after the olympics.

    If there are to be efforts to promote sports, they should be undertaken by creating infrastructure and organising tournaments at the grassroots (school & college) level. The school and college level athletes are the ones who need incentives to persevere. The professionals in the World Cup winning team will consist of players who are already love playing the sport and need no incentives.

    Lastly, should the govt take extra efforts to promote a specific sport at all? Does it really add any cultural value to the nation if it succeeds at more than one sport? Is it valid to spend taxpayer's money to chase such dreams?

    I think that sport at the higher levels should be left to the invisible hand of the market like everything else. The best Indian hockey players can ply their trade in foreign leagues to earn big bucks just as the best foreign cricket players play in the IPL.


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