Will Ayodhya's Ram Mandir Boost UP's Economy? Here's What Reports Are Predicting

Ayodhya is set to see a footfall of 50 million tourists – more than the combined footfall at Vatican City and Mecca.

Even as a sea of devotees waited in long queues to visit the Ram Mandir, let's take a look at the future prospects of Ayodhya vis-à-vis tourism and boosting local economy.

(Image: The Quint/@Namita Chauhan)

After the consecration of the Ram Mandir at Ayodhya in Uttar Pradesh on 22 January, Prime Minister Narendra Modi, while addressing the masses, said that “Ram is not the problem, but the solution.” 

This may very well be true for the economy of Ayodhya – and even UP. According to an SBI Research report, titled Where Latin America meets Scandinavia: The Road to Salvation passes through Uttar Pradesh, the total expenditure by tourists in UP will cross Rs 4 lakh crore by the end of 2024.  

In a separate report published by Jefferies, the foreign brokerage firm noted that Ayodhya is set to see a footfall of 50 to 100 million tourists – more than the combined footfall of Vatican City and Mecca in Saudi Arabia. 

Even as a sea of devotees await in long queues to visit the Ram Mandir, let's take a look at what these reports indicate about the future prospects of Ayodhya vis-à-vis tourism and boosting the local economy.

A large number of devotees gather to enter the Ram temple in Ayodhya on 23 January.

Devotees wait in queues to undergo security check to enter the Ram temple in Ayodhya.

'UP Govt to Earn Rs 25,000 Cr Extra Due to Ram Mandir'

The current expenditure by tourists in UP is approximately Rs 2.3 lakh crore, of which, nearly 95 percent of the spends comes from domestic tourists. Foreign tourists have spent Rs 10,000 crore in the state in the last year. 

The SBI Research report, which was published on 21 January, stated that the UP government is set to earn an additional tax revenue to the tune of Rs 20,000-25,000 crore in FY24 due to the projected spurt in tourists, given the completion of the Ram Mandir in Ayodhya. 

In addition, the report claimed 32 crore domestic tourists visited UP in 2022, registering an increase of nearly 200 percent as compared to the previous year. Of these, 2.21 crore tourists (or 7 percent) had visited Ayodhya alone.

(SBI Research)

'$10 Billion Ayodhya Makeover to Boost Local Economy'

Meanwhile, the report by Jefferies, named 'Ayodhya – Unlocking India’s Tourism Potential', noted that the temple city could see a footfall of over 50 million or 5 crore tourists in the coming year.

It noted that the city has undergone a “makeover” for $10 billion, or approximately Rs 83,000 crore.

“... a new airport, revamped railway station, township, improved road connectivity, etc. will likely drive a multiplier effect with new hotels & other economic activities.”

The report, published earlier this month, noted:

• The cost of the Ram Temple is $225 million or Rs 1,870 crore.

To put things in perspective, the Statue of Unity in Kevadia, Gujarat, was built by L&T at a cost of $360 million or Rs 2,990 crore.

• Phase 1 of the new airport at Ayodhya, which has a capacity of one million people, has become operational at $175 million or Rs 1,455 crore.

The capacity of the airport is set to increase to six million people in 2025, when three additional terminals and an international terminal become operational.

• The railway station at Ayodhya was revamped too, to double its capacity to 60,000 passengers per day. The cost of this project is estimated to be $30 million or Rs 249 crore.

• A 1,200-acre greenfield township, built at an estimated cost of $260mn is being launched.

It is to cater to the potential interest of senior citizens and families seeking a second home on account of sacred significance, the report pointed. A recent example of a greenfield tourist spot is the Statue of Unity, where multiple attractions developed alongside are boosting the local economy, the report observed.

'UP Second in Top-Five States for Religious Tourism'

The Jefferies report also compared states that drove the most religious tourism in 2019.

UP was ranked second in the list of top-five states visited by domestic tourists, and third in the list of top-five states visited by foreign tourists, in 2019.

(Jefferies)

(Jefferies)

Meanwhile, Tamil Nadu topped the charts because of its sturdy tourism infrastructure. The report noted that people visited UP “on account of its religious, cultural and historical significance.” 

Taj Mahal in Agra remains to be the most popular monument among both domestic and foreign tourists, whereas the Golden Temple in Punjab’s Amritsar is the most-visited religious site. 

(Jefferies)

(Jefferies)

(Jefferies)

The Jefferies report noted that the Tirupati temple in Andhra Pradesh has the maximum collection at an estimate of $140-150 million or Rs 1,160-1,245 crore. This is followed by Vaishno Devi temple in Jammu and Kashmir and the Jagannath Puri temple in Odisha. 

Drawing a comparison with international religious spots, the Jefferies report noted that Mecca makes an annual revenue of $12 billion, as compared to Vatican City, which makes approximately $315 million, on account of proximity with Rome. 

(Jefferies)

Note: The report stated that it has "used 2019 statistics to account for data excluding the impact of COVID19 disruption."

Note: Conversion at $1 = Rs 83.10