Why sports funding in India is an obstacle race

The bane of sports in India beyond cricket is that the combined income of all the sporting federations put together won’t even add up to a quarter of cricket’s. And it is barely growing. For instance, in 2009-10, the income of Hockey India was ₹33 crore, which shows the paltry growth over one decade. Even of the ₹48 crore in 2019-20, ₹7.6 crore went towards running its own office, including legal expenses of ₹3.5 crore.

If this was a private corporation that was accountable to its shareholders, heads would be rolling. Be it financial, structural or building a sporting ethos, the imperative for Indian hockey, and other sports, has to be greater. While Tokyo 2020 was India’s most successful Olympic campaign, it is also tempered by the feeling that it could have delivered more.

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An essential fuel to enable that is the support extended to Indian sportspersons. The Indian sporting framework beyond cricket sits on four pillars. The first, and the main one, is the Union government. Then, there are sporting federations, state governments and the private sector.

Until the outbreak of the covid-19 pandemic in March 2020, support from the Union government had been increasing. The trajectory, though, was uneven. Between 2015-16 and 2018-19, the annual increase in budget allocation by the Centre on sports ranged from 3-10%. During the run-up to Tokyo Olympics in 2019-20, the spending surged 57% to ₹ 2,327 crore. But in 2020-21, the pandemic year that also compelled organizers of the Olympics to postpone the sporting event by a year, it tumbled 31% to ₹ 1,601 crore.

The corporate sector’s support to build Indian sport (beyond advertising and private leagues) is significantly small compared to the government. Classified as corporate social responsibility (CSR) funds, private sector investments in Indian sports account for about ₹250-300 crore in a year.

This overall outlay, as well as the vision and execution, pales in comparison to successful sporting nations such as UK and Australia, which finished fourth and sixth, respectively, in the 2020 Tokyo Olympics. Adjusted for population, their Olympic medal hauls are among the best. Australia’s sports budget in 2020-21 was around $370 million Australian dollars (about ₹1,850 crore). India, with a population of about 50 times Australia, spent 14% less. The dramatic transformation of UK as an Olympic behemoth offers hope for India. Following a dismal show in the 1996 Olympics, where it finished 36, Britain has over the years overhauled its sports landscape. Sports management was professionalized, and UK Sport, a government agency, was set up as a singular entity to enhance its Olympic medal count. In 2019-20, it spent £146 million (about ₹1,500 crore). India can draw lessons from the turnaround models that other countries have adopted.

Central advance and retreat

Whatever money the Indian government spends on sports is channelled via the ministry of youth affairs and sports. The Union budget outlay on sports is classified under two broad categories. The first is ‘encouragement and awards to sportspersons’, which includes support to sports federations, awards and incentives. The second is the ‘Khelo India’ scheme, which aims to build a culture of sports in India from the grassroots, and upwards via infrastructure, competition, and opportunities.

However, the actual spend under both these initiatives has been lower than the budgeted amount in recent years. For instance, the ₹428 crore expenditure under the flagship Khelo India scheme was just 42% of the budgeted ₹1,015 crore. The spend on encouragement and awards to sportspersons increased from ₹317 crore in 2018-19 to ₹494 crore in 2019-20 due to targeted schemes for Olympians. But with the Olympics postponed by a year, this tumbled to ₹180 crore in 2020-21 (see Chart 1).

As per the Indian Constitution, sports come under the ambit of states, and there is no law governing sporting activities for the entire country. To address this issue, the Union ministry of youth affairs and sports notified the National Sports Development Code in 2011, which specified the principles for good governance of all national sports federations (NSFs). However, there is a lack of clarity over whether these principles are binding on various sporting bodies and institutions. In addition to the NSFs, the key government stakeholders managing sports are the Sports Authority of India (SAI) and the Indian Olympics Association (IOA).

The sporting entities in India have a legacy of fiefdoms, opaqueness, corruption and a lack of compliance, which has even resulted in bans from the international agencies. In addition, these federations have struggled to raise finances. Even with just ₹48 crore, Hockey India is one of the better-endowed federations in India. The shooting federation reported an income of ₹26 crore in 2019-20, the boxing federation ₹23.4 crore in 2018-19 (the latest period available), and the athletics federation ₹3.4 crore in 2019-20. These are sums that would be the marketing budget of a mid-sized company.

Direct to sportspersons

Government funding for athletes in India is broadly through assistance to sports federations along with incentives and support for promising individuals. In 2020-21, the Centre spent ₹180 crore on sports federations, incentives, and the National Sports Development Fund (NSDF). The NSDF, managed by a council instituted by the Union government, is the nodal fund through which assistance is routed to sportspersons. In addition to the Centre, states, corporates and individual citizens can contribute to the NSDF. In the 20 years of the NSDF, non-government donors, led by public sector undertakings, have contributed about ₹160 crore to the fund. These funds are then disbursed to athletes and sports foundations based on a review of applications. According to the 2018-19 NSDF annual report, a sum of ₹61.3 crore was disbursed to 386 sportspersons across 22 disciplines till 2018-19. Shooting received the most ( ₹28 crore), followed by athletics ( ₹9.6 crore). Another ₹116 crore was distributed to 80 sports federations and private institutes.

For the 2020 Tokyo Olympics specifically, a programme called the Target Olympic Podium or TOPS scheme was established in 2014 under the NSDF to identify and support medal prospects. This scheme was refurbished in April 2018 to establish a technical support team to manage TOPS athletes and provide more comprehensive support. TOPS provides funding for foreign training, international competition, equipment and coaching camps, besides a monthly stipend of ₹50,000 for each sportsperson. For Tokyo, 162 sportspersons across 26 disciplines and 58 members of the men’s and women’s hockey teams were supported through TOPS. Athletics had the highest representation with 33 of them receiving support through the scheme, followed by shooting with 16 sportspersons.

While TOPS has been hailed by many sportspersons, it has its drawbacks. For instance, a sportsperson only becomes eligible on qualification for the Olympics. Golfer Aditi Ashok, who came within a whisker of a medal in Tokyo, could not benefit from TOPS since she only qualified 60 days before the main event.

Even the monthly stipend of ₹50,000 has been deemed to be too low, given that several professional athletes hail from underprivileged backgrounds and have families to support. There is also a glaring disparity between the salaries of sportspersons and cricketers, who draw multi-crore salaries.

Private sector play

Indian athletes also benefit from support from various businesses. Private sector funding for sports in India is done primarily through three modes: public-private partnerships (PPP), for-profit academies and corporate social responsibility. Some of India’s largest corporations such as the Tata Group, Reliance Industries Ltd (RIL) and the JSW Group have had a legacy of supporting Indian sports. In addition to corporations, there are also non-profit players such as the Olympic Gold Quest, which offers financial support to promising athletes by raising funds from individual and corporate philanthropists.

CSR has been the main vehicle for private sector investments in sports in India. In 2018-19, a total of 556 corporations cumulatively pumped ₹295 crore into sports. This went towards developing grassroots sports facilities, setting up and supporting existing sports academies, and developing individual sports such as football and swimming. In 2019-20, for the first time in six years, this fell to ₹263 crore. RIL was the leader in CSR sports expenditure in 2018-19, with ₹41 crore. It was followed by Hindustan Zinc Ltd, Reliance Retail and Kotak Mahindra Bank (see Chart 2). What’s lacking in private support are funding instances where the vision is big and is matched by a funding commitment over several years. For example, in 2018-19, there were only 13 instances of a corporate making a sports grant of above ₹5 crore.

The PPP model for sports development also remains constrained due to the lack of a standardized model and a lack of incentives for states to integrate PPP into their sports policies, according to a 2016 report co-authored by consultancy KPMG and the industry body Confederation of Indian Industry (CII). The report tilted Business of Sports also highlights successful PPP interventions, such as JSW’s engagement with SAI in Hisar, Haryana.

While monetary support for sports is rising, albeit slowly, there is also a need for certain reforms in order to transform India into a truly significant sporting behemoth. According to the KPMG report, the following interventions will be crucial. Private sector organizations and non-profits will have to be incentivized to participate in sports development through a combination of monetary and tax incentives. Since sports is a high-risk vocation, it is imperative that adequate financial security is provided to athletes to enable a more lucrative career. Further, sporting federations should be governed by former sportspersons with a proven ability to lead sporting bodies, rather than politicians or bureaucrats. Lastly, the PPP route should be harnessed to develop world-class sporting infrastructure. In the US, sports is well integrated with the education system, with college sports competitions being popular as well as rigorous.

The shining performance of India’s sportspersons in Tokyo, many of whom overcame significant odds, shows that there is no dearth of talent in India. However, to identify, groom and nurture promising prospects for world-beating athletes will require concerted effort, investment and cooperation among all key stakeholders of the sports industry in India.

Arjun Srinivas is with howindialives.com, a search engine for public data