India's inaugural F1 race: speeding past the poor

Nation’s first Grand Prix reignites debate over wealthy disparities among India’s 1.2bn
India's inaugural F1 race: speeding past the poor
Even the cheapest F1 tickets are too expensive for Indias poor
By Bloomberg
Thu 27 Oct 2011 05:20 PM

India will hold its first Grand Prix this weekend - a glitzy
coming-out party for an emerging economic juggernaut that is lost on villagers
like Meera, standing by a fetid pond near the brand new Formula One race track
with a child covered in warts.

"What is this Formula One? I learnt only recently that
some of our land was acquired for it," said Meera, a mother of four who
goes by one name. The floodlights of the $400m F1 circuit that can hold 100,000
roaring spectators could be seen in the distance.

Seen by its supporters as an example of how India's private
companies can organize complex, hi-tech and global events, the Grand Prix has
re-ignited India's perennial questioning of how far the country should go down
the globalization road.

For critics, it is an example of skewed economic growth, an
elitist event where even the cheapest tickets are unaffordable for most people
and an event that has no roots among India's 1.2 billion people.

For the moment, that questioning is lost in a media frenzy.

Boosted by Lady Gaga, Bollywood and cricket stars, the Grand
Prix may help India regain its self confidence after a scandal-plagued
Commonwealth Games sparked headlines mocking the Asian power's arrival on the
world stage.

Run by Jaypee Sports International, a subsidiary of the
Jaypee Group construction and infrastructure giant, the F1 event has come in on
schedule with almost none of the cost overruns, corruption and shoddy
construction that plagued the government-run Commonwealth Games last year.

"The world's perception of India is going to change
after the Grand Prix and people will forget what happened because of the
Commonwealth Games," Jaiprakash Gaur, founding chairman of the Jaypee
Group, told local media.

The event is also just the latest example of international
sports bodies ensuring they get a foot in this booming Asian marketplace with a
huge advertising base of millions. India has already attracted the attention of
top European football clubs.

Nevertheless, India is playing catch-up with its fellow emerging
market rivals. China held a successful Olympics while Brazil will hold the next
edition of the football World Cup - and Russia follows four years later. Brazil
also has the 2016 Olympics.

But what price this sovereign branding game?

The extravagance of the event and questions about land
seizures to make way for the circuit have sparked criticism. Critics have cited
it as an example of misplaced priorities in a country where malnutrition rates
rival sub-Sarahan Africa.

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The cheapest tickets are about 2,500 rupees (about $50) -
about half the monthly wage of a cleaner. The most expensive corporate boxes go
for about $200,000 - and nearly all have been sold.

When the event was being planned in 2009, then-sports
minister M.S. Gill dismissed it as "expensive entertainment."

"In many ways it epitomizes what is wrong with this
country," said Paranjoy Guha Thakurta, a political commentator.

"One section of India would like to tell the rest of
the world about how fast growing we are. Just come here and see the inequality
and poverty on the ground and you get a reality check."

Situated in western Uttar Pradesh state, about an hour's
drive from New Delhi, the Formula One track is connected by a new highway
through the capital's booming outskirts of anonymous office blocks and cement
skeletons of soon-to-be-built colleges.

Within the circuit grounds, where shiny Mercedes Benz
display cars are parked, poor Indian women used brushes and their hands to
sweep dust and stones from an access road, their children playing nearby.

In nearby Salarpur village, Meera, who is illiterate and can
only guess her age, held a sick child in her arms. He has suffered malaria
twice. Rubbish lay in ponds of stagnant water. A young calf grazed on garbage.

"I don't understand this concept of cars racing for
entertainment," she said. "People pay money to watch this? Like a

Nearby, workers sprayed the manicured lawns around the F1
track with water in last minute preparations. Meera, who has electricity for
four hours a day, must walk half an hour to the nearest water pump.

For the moment, though, the media focus is on speed and
glamour, and Force India, India's first Formula One team, which has a slogan of
"Raising The Flag."

The 5.14km track is touted to enable the F1 calendar's
second highest average speed after Italy's Monza. Its 1.2 km straight is one of
the longest in Formula One, aimed at encouraging high speeds and overtaking.

The grandstand, with seats colored in the Indian flag colors
of saffron, white and green, features an undulating roof that can be seen from
miles around.

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There is much focus on the track itself, with safety
concerns paramount after the deaths of a two-time Indianapolis 500 winner and
an Italian motorcyclist in races this month.

But a successfully held event would confirm what supporters
hope will be an example of India finally showing what it is capable of.

"This comes after a bad year for India," said V.
Ravichandar, chairman of Feedback Consulting in Bangalore, which advises
multinationals. He was referring to a string of corruption scandals that hit
foreign investments into India amid growing instability of the Congress-led
coalition government.

"To have an event that goes smoothly will show that the
private sector is capable for pulling off events like this."

But controversies may hang over the event even after a
successful weekend.

The Grand Prix will take place in a state governed by a
Dalit or "Untouchable" leader called Mayawati. She has raised a storm
of criticism for building parks worth tens of millions of dollars in honor of
her party. The state is one of the poorest and most corrupt in India.

Questions have been raised about why Mayawati granted
organizers exemption from an entertainment tax. Several hundred farmers plan to
protest what they say was the seizure of their land at rock bottom prices by
the state government.

"This is just another way of India patting itself on
the back and saying we have arrived in terms of size and growth." said
Suhel Seth, a popular marketing and management expert.

"Will investors get excited? No."

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