In today’s Finshots, we tell you why India wants to host the Commonwealth Games yet again, even though the numbers say that hosting it doesn’t really pay off.

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Now, onto today’s story.

The Story

India has just thrown its hat in the ring to host the Commonwealth Games (CwG) in 2030, which will be a milestone year marking the 100th anniversary of the event.

And its main or rather, the only competitor is Nigeria. Both countries have put in formal bids, with Ahmedabad named as India’s proposed host city.

But the decision about who gets to do the honours will only come in November. That’s the big headline.

But here’s the quieter part of the story. Until a few months ago, nearly five countries were in the race to host the 2030 Games. Today, it’s down to just two. The rest backed out, and the reason was the same as always: the costs just didn’t add up.

Take Canada, for instance. It flirted with the idea of bidding but backed out when its provinces pushed back. Alberta’s government pegged the price tag at over CAD$2.68 billion ($1.9 billion) and declared it “not a good deal” for taxpayers.

And their hesitation wasn’t without reason. They may have been influenced by Australia’s Victoria Province who walked away from the 2026 Games because their initial budget of A$2.6 billion ($1.77 billion) had ballooned to over A$7 billion ($4.77 billion).

So if costs can more than double even before the opening ceremony, you can see why other countries are spooked. Sponsorships and broadcast rights don’t bring in enough to bridge the gap. In fact, more than 90% of the financial risk typically falls on the government, which really means taxpayers footing the bill.

The proof is in the pudding. Business Standard crunched the numbers and found that commercial returns for host cities have been sliding for decades. To put things in perspective, back in 2002, Manchester managed to recover 46% of its operating costs through sponsorships and media deals. But by the time we got to Gold Coast 2018 and Birmingham 2022, that figure had fallen to under 20%.

No wonder fewer countries want to host the Games. In fact, there’s even been chatter that if things don’t change, Glasgow 2026 could be the last-ever CwG.

So, if hosting the CwG is such a money-losing proposition, why is India so eager to host it, you ask?

Well, you might say, “Come on, Finshots, this one’s obvious. Big events leave behind shiny new infrastructure, create jobs, bring in tourists and give a boost to small businesses too. So even if the Games don’t rake in huge profits directly, the economy benefits in the long run.”

Sounds fair. But here’s the catch. This argument isn’t always as solid as it seems. And a bunch of smart folks at The Conversation have explained why. See, most of the rosy economic studies are done before the Games, mainly to build a case for hosting them. Take Sydney 2000 for example. Ahead of the Olympics, KPMG told the New South Wales government that the Games would deliver over $7 billion in benefits.

But once the Games are over, detailed follow-up studies are rare. So you don’t really know if those projections ever came true.

Curious about this gap, their researchers decided to run the numbers on Sydney’s Olympics after the Games. And their findings weren’t exactly gold-medal worthy.

They discovered that the 2000 Olympics actually reduced Australia’s real private and public consumption by about $3.7 billion (adjusted to 2023 prices) over the nine years the Games influenced the economy.

So, what went wrong?

Enter two basic economics lessons: the crowding-out effect and opportunity cost.

The crowding-out effect is when government spending pushes private spending aside. In Sydney’s case, regular tourists stayed away because hotel and flight prices shot up, crowds clogged the city and everything got pricier. So instead of adding new economic activity, the Games displaced existing activity.

Then comes opportunity cost — the idea that money spent on one thing could’ve been better used elsewhere. Sydney poured $5.2 billion into the Olympics. Strip out the revenues and the net direct cost (in today’s money) was about $4.5 billion. And remember, this wasn’t private money. It was taxpayer cash. Which meant funds that could’ve gone into other programmes like schools or hospitals — things that create lasting benefits, were redirected into Olympic venues. Resources like labour and materials were pulled away from more productive uses too.

To make matters worse, governments often raise taxes, borrow more, or cut other spending to finance such events. And all of that eats into household disposable income, leaving people with less to spend.

So yeah, hosting the Olympics or CwG might bring intangible perks like national pride and unity. But those perks come with a very real, and very heavy, price tag.

So maybe India’s desire to host the CwG isn’t just about money. It’s a bit like buying a house. Sure, it’s a practical necessity. But since it’s a once-in-a-lifetime decision, people often end up splurging a few extra lakhs. Why? Because owning a home isn’t just about utility, it’s about status. It’s about being able to tell your friends and family, “This is mine.” It changes how people look at you because it’s a marker of success in society.

India’s thinking is not too different. Hosting the centenary edition of the CwG is less about profits and more about prestige. It’s about stepping into the global spotlight and saying, “We’ve arrived.”

After all, India is the world’s fifth-largest economy and has its eyes on climbing to second place by 2038, ahead of Japan, Germany and even the US. To get there, building soft power and global visibility matters just as much as GDP numbers.

Then there’s the promise of transformation at home. The Games could spark fresh investment in world-class stadiums, transport and urban amenities, particularly in Ahmedabad and Gujarat. They could also act as a catalyst to get young Indians more engaged in sport, inspiring the next generation to embrace athletic excellence, fitness and healthier lifestyles.

These things go beyond economics and the kind of intangible benefits you can’t always measure, but they matter just the same.

But here’s the thing again. If India really wants to pull this off, there’s one crucial rule — avoid the scandals that could wreck our image and undo everything.

And you probably know what we’re hinting at. The 2010 CwG in Delhi wasn’t exactly our proudest moment. The event was marred by shoddy organisation, delays and above all, financial scandals. Inflated contracts and wasteful spending meant costs spiralled out of control.

To give you a sense of scale, when India bid for the 2010 Games back in 2003, the budget was pegged at around ₹1,200 crores. By the time the Games wrapped up, costs had exploded by more than 1,400%! That’s the sort of thing we can’t afford to repeat if we want to build soft power of the right kind.

Instead, maybe the real benchmarks for India should be something like the 2014 Glasgow Games. Unlike many other big sporting events, Glasgow avoided White Elephant venues — those flashy, expensive stadiums that sit empty, cost a fortune to maintain, and sometimes even end up being demolished. Instead, the city focused on infrastructure that would serve people long after the Games were over. From day one, there was a legacy plan. The Athletes’ Village, for instance, was built to residential standards, and once the Games wrapped up, it was converted into about 1,400 homes — a mix of private and affordable housing — in the long-neglected district of Dalmarnock.

Or take Birmingham 2022. They actually managed to finish the Games with a £70 million underspend. And instead of letting that money vanish into bureaucratic cracks, they decided to reinvest it back into the region.

So, maybe if we take a leaf out of these CwG playbooks, we’ll be able to derive those intangible benefits that come from the world knowing India for the right reasons. Else, with public money wasted, our image will risk being tarnished too.

Hopefully, things will pan out better this time. Fingers crossed. 🤞🏽

Until then…

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