In July this year, there were rumours flying thick and fast that the Buddh International Circuit, which held the Formula One (F1) race for three seasons, will host a wedding. The rumour turned into a reality when the wedding of Jaypee Group co-founder’s daughter was held at the circuit. The Indian elites’ obsession for ‘big fat’ wedding is very well known, but how does one explain the usage of a racing circuit, which was built at an estimated cost of $450 million, for the purpose of a wedding. The incident has hurt F1 enthusiasts across the country. They made their displeasure known on social media platforms in no uncertain terms. Various motorsport forums online were of the opinion that the track will be damaged and the F1 race will never come back to India.
The Buddh International Circuit, commonly known as the F1 race circuit, is a world-class motor race circuit in Greater Noida in Uttar Pradesh (UP), some 50 km away from the national capital. The circuit hosted India’s first Formula One Grand Prix in October 2011 and then went on to organise the same for two more seasons before a tax dispute with the state government cropped up in 2013. Since then the Buddh International Circuit has lost two crucial seasons and there seems to be no breakthrough yet between the circuit promoter, Jaypee Group, and the UP government.
The popularity of the race is such that the circuit has become synonymous with F1 and not many people actually know its name. The Buddh International Circuit had also received ‘2011 Motorsport Facility of the Year’ award at the Professional Motorsport World Expo 2011 apart from getting honoured twice with Best Promoters trophy for successfully organising F1 races. However since the discontinuation of the F1 race, the circuit, which was also in talks to host the MotoGP race, is being used for wedding ceremonies, shoots and other odd things.
What went wrong?
Everything was fine with the Indian Grand Prix until the tax dispute, which emerged in 2013 between the Jaypee Group and the state government. The state government told Jaypee Group that it had to pay entertainment tax for organising the F1 race. Since, it involves private parties, the F1 race is not considered as a sport in India but entertainment. A public interest litigation was also filed against Jaypee Group in 2013, demanding a ban on the race for failing to pay the entertainment tax. Earlier in 2011 also, the apex court had questioned the Jaypee Group over the non-payment of the entertainment tax.
A source tells TEHELKA that the F1 race in India has become a victim of the political tug of war between Mulayam Singh Yadav and Mayawati. Jaypee Group was granted entertainment tax exemption since the first Grand Prix by the then UP chief minister Mayawati. The successful conduct of the F1 race was the main poll plank of Mayawati’s Bahujan Samaj Party (BSP) during the Assembly election of 2012. Mayawati’s hoardings crediting her for the race were seen all across the state. However, she lost the election and Mulayam’s Samajwadi Party (SP) came to power in the state. Hence, the problems started for the F1 race.
“Mulayam knew that the credit of F1 race will always go to Mayawati since it was held during her regime. Therefore, he started creating hurdles for the race. I am sure that the race will come back to India when there is a change of guard in the state,” says a member of the racing fraternity requesting anonymity.
However, there are some who believe that the Jaypee Group, which is primarily a real estate company, discontinued the race because its cash reserves were drying up.
“Jaypee has many unsold inventories across Noida and Greater Noida due to slowdown of the real estate market in the country. Their cash reserves were already on a downward spiral and the tax dispute with the government made the situation worse for them,” says an insider of the Jaypee Group. His (insider) information proved true as Jaypee Group’s profit decreased by more than half in the last three years.
In its annual report for the year 2010- 11, during the inaugural Grand Prix, the group showed a profit of Rs 1,026 crore. However, the profit margin halved to Rs 413 crore in 2013-14, when the last Grand Prix took place. Despite several attempts, the Jaypee Group could not be reached for comment.