Sunday, April 08, 2007

Control Raj making a strong comeback?? (First commodities, industrial goods and now cricket)

Here's the [BANNED] list (pls add more in case i've missed out a few):

1). Raw jute futures
2). Export of Pulses
3). Sugar exports
4). Futures trading in Tur & Urad
5). Futures trading in Wheat and Rice
6). Freeze on Cement prices

There is also a [pending] list:

1). Futures trading in Maize
2). Natural rubber futures
3). The Big One - Ban on futures trading in all commodities

Well, if we thought that control-raj is restricted to agro-commodities and industries goods, think again! The Board of Control for Cricket in India recently released a few guidelines, primarily to save its face following the humiliating defeat of the Indian cricket team at this year's Cricket World Cup. Some of the guidelines, which are similar in nature to the above cases are:

1). No. of endorsements per player restricted to THREE
2). No brand can hire more than two cricketers
3). Players to take prior permission from the Cricket Board before signing endorsement deals

What the BCCI aims to do by this is really questionable?

Because, the problem of non-performance in no way can lie with endorsement deals. Cricketers who get a lot of endorsement deals are the ones who are seen as good players or who have performed well in recent times. So really speaking if a player aint playing well, will the sponsor still continue paying top dollars to the underperformer? I think not. Its simple advertising economics. And to top it all, if the Cricket selection committee were to think that a player is not giving his best and is instead concentrating more on sponsorship deals, then they can simply DROP HIM from the next series. Once dropped, a player holds not much of a brand value for the sponsor. Earnings from sponsorship deals will automatically drop and the pressure to perform will mount.

But ofcourse, the BCCI needs to be seen to be doing something....and thats precisely what it is doing, much like some of the Ministeries at the Centre.

CONTROL RAJ coming back with all the expected (read: Anti-Market Economy) effects!

3 comments:

Anonymous said...

Dear Mr.Purohit,

Found your write-up quite interesting.

To the best of my knowledge, in February 2007, the Government had banned exports of two more commodities, viz; milk powder (till September 2007) and wheat (till December 2007). You can check the facts and add the items in the list of banned items in your write-up.

You have mentioned sugar exports in the banned list. The ban on sugar exports was lifted patially in December 2006 and fully in January 2007. Now infact the govt has taken a decison to offer export transport subusidy to sugar mills in view of the glut in the domestic market.

Reagrds,
Ms.Swamy

Ravi Purohit said...

Ms.Swamy:

thnx for the updates. will add them. so far as sugar exports are concerned, you are right the ban has been lifted, which is why the whole sugar pack rallied sharply on the bourses in recent weeks. in this note I was simply trying to pin-point the actions GoI has undertaken....which take us back to the 80s in the economic policies.

-
ravi.

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