The story of the year—possibly of the decade—has to be the Indian Premier League (IPL). I say this not in the narrow sense of how it will transform the sport of cricket, but in the much broader sense of the enormous impact it is going to have on every facet of life in India.
If liberalization in the 1990s unlocked the entrepreneurial energy of India, and allowed the trickle of wealth creation to begin, IPL has broken open the dam on the debate about markets in our country. In one stroke, it has moved the theatre of action on free markets from the chandelier-tinkling conference rooms of Delhi to the galis and nukkads of every town and village in India. Millions of Indians will now, forever, engage viscerally in a manner that no trickle-down process could ever achieve.
The impact of IPL hasn’t sunk in yet. In fact, most people haven’t even understood the events of last week, when Dhoni went for $1.5 million and freshman Ishant Sharma, whom nobody had heard of until a month ago, got an annual contract of $950,000, or the fact that the bidding itself was in dollars. And what does it mean that Robin Uthappa would be playing for Mumbai, not his home-town Bangalore?
I asked my father-in-law, who follows the markets quite closely, what he thought of the IPL auctions. He scratched his head and said, “Samaj mein nahin aata” (I haven’t understood them), unsure about how it would pan out. My driver is equally confused, but he got the message about why some people got paid more than others. I asked him why Ricky Ponting, arguably the best batsman in the world, went for so much less than Dhoni. In his own way, he understood the value of discounted cash flows, that teams are paying for future performance, not past records, and said: “Dhoni’s cricket is ahead of him, Ponting’s is behind him.”
Perhaps nobody feels the confusion as much as Sharad Pawar, sitting in his schizophrenic world: overseeing the bonanza for BCCI while presiding over a sleepy agriculture ministry. He’s got to be thinking “there must be some lessons here in creating an open market for rural credit” that mere exhortations and loan waivers won’t do—ironic timing here, IPL happening on the eve of this Budget. Or, that if BCCI could turn around a concept such as IPL in less than a year, what prevents the National Horticulture Mission from working at a similar pace, embracing some of the same principles to accelerate the creation of a cold chain infrastructure, creating incentives for states to deliver a knock-out punch to the outdated APMC Act. When I asked him about his thoughts, Surjit Bhalla, economist and free-market maven, said: “The untold story is how an opaque monopolist such as BCCI was forced to respond by the competitive threat created by Subash Chandra’s ICL (Indian Cricket League).”
Wait until the tournaments actually start. Imagine the Kolkata cricket team and what it’s going to do to the political debate in that state in the coming years: The aam aadmi lining up to watch his city team promoted by a Bollywood badshah, funded by market capital, featuring marquee players from across the world, and undertaking a daily mark-to-market on Sourav Ganguly. A thousand Montek Ahluwalias couldn’t have managed to pull this off in a 100 years, bringing the common man into the complicated conversation on markets and society.
People will get rewarded for talent and effort as they should, but we will also see marketing managers desperate to manufacture city loyalties, and player motivations driven not by collective identity but by purse strings. IPL will force open the dusty locked-up closets of our value system, and demand that we re-examine our construct of the world, not settling for received wisdom, but having to make informed and sometimes confusing choices, each one by ourselves. No more stagnant group-think.
One reader of The Hindu wrote: “How is it that in a democratic and socialist country, a few, in the name of cinema and sports, can earn disproportionate amounts of money while thousands of farmers commit suicide for want of patronage?” Values aren’t to be treated like family heirlooms, never to be got rid of or questioned, but to be challenged. Not just occasionally, but constantly, permanently. IPL will create this churn.
No question about it—the real transformational change in India’s debate on a market-based economy didn’t announce itself on the front page of politics or economics, but sneaked in last week through the back door of the sports pages.
Ramesh Ramanathan is co-founder, Janaagraha. Möbius Strip, much like its mathematical origins, blurs boundaries. It is about the continuum between the state, market and our society. We welcome your comments at mobiusstrip@livemint.com