Wednesday, May 1, 2013

What the Gandhi Dynasty owes India.

Naming rights is a nascent industry in India. BCCI, the famed not-for-profit society was the earliest to milk the potential to a Yes Bank Maximum by hawking every teensy thing associated with IPL. As Amrit Mathur points out here, the BCCI rakes in annual franchisee fee payments ranging from ₹ 198 crores from Sahara Pune Warriors to ₹ 36 crores from Rajasthan Royals. Considering the title rights (2013 to 2017) was sold to Pepsi for ₹ 396.8 crores, you can clearly imagine the cash cow that has been created by a mere transfer of verbal branding rights. Although sports is the lead arena for naming rights, internationally several cash-strapped universities, governments and hospitals have raised truckloads of money by deploying this strategy. To give you a quick idea:

 University of Missouri-Kansas City (UKMC) retails professorship naming rights for ₹ 4 crores, endowed chair for ₹ 8 crores, restroom branding for ₹ 13 lakhs and bigger ticket items for amounts ranging in the realm of ₹ 30 crores and above.

 The Pattison Avenue Terminus was renamed as AT&T Station by the city of Philadelphia for a price of ₹ 21 crores. In Camp Hill, Pensylvania, government officials were offering to name two gyms for ₹ 1.3 crores each, the town library for ₹ 80 lakhs and high school counseling offices for ₹ 8 lakhs!

 Hasbro Children's Hospital at Rhode Island Hospital, Morgan Stanley Children's Hospital of New York-Presbyterian, The Bristol-Myers Squibb Children's Hospital at Robert Wood Johnson University Hospital in New Jersey, and Mattel Children's Hospital at the University of California, Los Angeles are some hospitals that have benefited. It seems, Hasbro paid ₹ 13 crores way back in 1994 to clinch the deal.

Given this background, now let's examine what our Government of India has been doing, year on year. Naming rights to all leading institutions in all leading cities, has been gifted away to the Gandhi Family for almost nothing. Here's a very conservative estimate of the loss incurred by the tax payer:

  •  6 Airports and ports. Let's apply a basic fee of Rs. 50 crores a year. That's 300 crores gone. 
  •  98 Universities and educational institutions. Let's apply a peanut fee of 50 lakhs per institution per year. That's 49 crores gone down the drain. 
  •  39 Hospitals. Applying a pessimistic rate of 1 crore per hospital. That's 39 crores gifted away. 
  •  74 Roads, Buildings and Places. If the naming rights were to be auctioned, it will yield at least 50 lakhs per entity per year. That's again 39 crores. 
  •  15 National Parks and Sanctuaries. Since every corporate covets the green tag, the naming rights may yield at least 10 crore per park per year. That's 150 crores. 
  • 1 Airport and 1 port. @ 50 crores/year, the damage is 100 crores. 
  •  11 Universities and educational institutions. @ 50 lakhs/year, the loss is 5.5 crores. 
  •  5 Museums and Parks. @ 10 crore/year, the government loses 50 crores. 
  •  5 Convention halls and sports arenas. @ 10 crores / year, GOI gave up 50 crores of revenue. 
 I am not going to count the awards and other schemes named after Indira and Rajiv.

The net opportunity loss per year for the government of India is at least 775 crores. That's just for the naming rights. Think of what all can be done with 775 crores. For starters we could feed at least 7 lakh people below poverty line (Montek's definition of 28 rupees per day) for a whole year!