Sacred Stimulus: Economic Impact of the Ram Mandir on the economy

In 2022, India experienced a 106% YoY growth in religious tourism income, which is expected to surge to new heights with Ayodhya’s iconic Ram Mandir now open to millions of devotees from around the world. The city’s makeover, including a $10 billion investment in infrastructure, is set to attract 50 million tourists annually. This surge has sparked significant growth in Ayodhya’s tourism and hospitality, transportation, and technology sectors.

As the Ram Mandir continues to attract global visitors, its positive impact on the services sector is poised to foster sustained economic growth in the region and for India as a whole.

Image Credit: Pixabay

  • Ayodhya attracted over 23 million tourists in 2022, and with the completion of the Ram Mandir, the city anticipates an annual influx of 50 million visitors, driving demand for new accommodation options and boosting the local economy.
  • The city’s makeover, valued at $10 billion, includes the development of the Maharishi Valmiki International Airport, improved road connectivity, and other facilities, creating opportunities for growth in sectors like aviation, railways, and ancillary services.
  • To accommodate the growing number of visitors, Ayodhya has introduced 100 electric buses, improved connectivity, and upgraded public transport services, contributing to the overall enhancement of the city’s service infrastructure.
  • The popularity of the Ram Mandir has necessitated advancements in technology and communication infrastructure, with initiatives such as AI-powered security surveillance, AI-enhanced surveillance cameras, counter-drone measures, and a smart traffic management system enhancing the overall visitor experience.

In 2022, India’s religious tourism hit a high note, raking in over Rs 1.34 lakh crore—a whopping 106% growth YoY. The sector is expected to generate a revenue of Rs 59 billion by 2028, creating 140 million temporary & permanent jobs by 2030.

Ayodhya, a city soaked in history, welcomed a whopping 23 million tourists during the same period. Now, with the finishing touches being put on the Ram Mandir, Ayodhya is gearing up to break even more records. It’s not just about faith; it’s about a surge in economic vitality, all set to unfold as this cultural hub becomes an even more sought-after destination.

The establishment of the Ram Mandir is poised to propel the city’s economy to unprecedented heights, particularly through the service sector. Ayodhya’s makeover worth around US$ 10 billion includes the Maharishi Valmiki International Airport, revamped railway station, township, improved road connectivity, and more, according to a report by Jeffries. It is expected to attract a whopping 50 million tourists per year.

The report further elaborates how it could promote sectors like FMCG, consumer staples and quick service restaurants apart from aviation, railways, cabs and ancillary services. Quite expectedly, we are witnessing several brands like Reliance, Coca Cola, Adani Wilmar, Dabur, etc looking to leverage this influx. The same goes for players like Blinkit, Swiggy Instamart, BB Now and Zepto in the last mile delivery space.

Tourism and Hospitality

The foremost impact is evident in the tourism and hospitality industry during the recent few months. Already known for its historical and cultural significance, Ayodhya has witnessed a surge in domestic and international visitors.

“As the Ram Mandir takes center stage, Ayodhya is emerging as a hotspot for people from across the globe, including travel enthusiasts. We’re witnessing a spike in tourism interest, with more people eager to explore the cultural richness around this iconic landmark. This not only means a boost in business but also opens up exciting opportunities for all industries. The Ram Mandir is turning Ayodhya into a go-to destination, and we’re excited to be part of this journey,” comments Sanjay Aggarwal, Founder & CEO, Sun & Sand Tour & Travels.

Needless to say, the surge in demand will generate unprecedented pressure on the city’s infrastructure, which will have to keep pace. Ahead of the inauguration, the city is expected to draw thousands of pilgrims and tourists to witness the grandeur of the Ram Mandir, generating increased demand for hotels, restaurants, and other hospitality services. This influx has led to the establishment of new accommodation options, thereby generating employment opportunities and contributing to the local economy.

To accommodate the soaring number of pilgrims from across the country, several hospitality players are boosting their capacities or have developed new facilities. A case in point is Praveg Ltd, which has opened a new resort in the city with most of the rooms already booked. Other luxury hoteliers like Indian Hotels Co, ITC Ltd and EIH Ltd are also gearing up to welcome guests with their upcoming and new properties. The ratio of residents to tourists is pegged at 1:10.

With increased demand, the room rates in the area have seen a significant increase upto Rs 73,000 per night. Apart from hotel rooms, Ayodhya Tent City, which offers 30 luxurious tents was completely booked for the inauguration day at Rs 30,000 per night.

Moreover, the city is set to boost its tourism economy with 73 new hotels in the works and 40 hotels currently under construction. Apart from the big hospitality companies, Ayodhya residents also have a major opportunity to generate income. The authorities have approved 500 homes offering 2,500 rooms for homestays.

Transportation Services

The increased footfall in Ayodhya has also benefited the transportation sector. Improved connectivity, new roads, and upgraded public transport services have become essential to accommodate the growing number of visitors. This, in turn, has led to the expansion and enhancement of transportation services, providing convenience for tourists and boosting the overall service infrastructure in the region.

In order to smoothen the commute within the city, UP: Chief Minister Yogi Adityanath flagged off 100 electric buses, which will be initiated on the Dharma Path and Ram Path, scheduled to commence operations from January 15.

To elevate the tourist experience within the city, the Transport Department is establishing assistance help desks at toll plazas along the routes connecting Ayodhya to Lucknow, Gorakhpur and Sultanpur. Appreciating the government initiatives, Rajiv Mehra, President of Indian Association of Tour Operators (IATO) stated –

Ayodhya has become the spiritual hub of India. Nearly 50 Hotels have evinced interest in investing in the city. Ayodhya-Varanasi- Mathura will be the famed itinerary that will galvanise tourism in India. Under the able leadership of our Hon’ble Prime Minister, tourism in India is galloping ahead with Uttar Pradesh marking as the Spiritual Tourism Capital of India. As a concomitant, with the flow of tourists to Ayodhya, both domestic and international, demand in diverse facets will grow in a geometric proportion. Supply will rush to fill the gap. The resultant growth in the city’s economy in all facets then is a forgone conclusion- all for the good of Incredible India.”

The planning and execution of various events related to the Ram Mandir have given a significant boost to the event management sector. From religious ceremonies to cultural programs, event organizers, caterers, and decorators have seen a surge in demand for their services. This has the potential to catalyse professionalization and formalisation of the event management sector in Ayodhya and ensure the creation of job opportunities in this sector.

Technology and Communication

The increased popularity of the Ram Mandir has necessitated improvements in technology and communication infrastructure. With a higher demand for online booking services, digital payments, and information dissemination, the services sector related to technology and communication has witnessed significant growth. This not only benefits tourists but also enhances the overall experience of visiting Ayodhya.

Technology is poised to play a pivotal role in establishing security and surveillance measures in the city. The Uttar Pradesh Police has collaborated with the Gurgaon-based artificial intelligence (AI) startup Staqu Technologies. This partnership was aimed at ensuring real-time security surveillance in Ayodhya during the inauguration ceremony, utilizing Staqu’s advanced AI-powered Jarvis platform.

The Department of Telecommunications (DoT) made collaborative efforts to smoothly orchestrate the “Pran Pratishtha” ceremony, blending technology seamlessly with tradition. Given that the event was to be live-streamed at the renowned Times Square in New York City, various cutting-edge technologies were employed, including:

  • AI-enhanced Surveillance Cameras: Ayodhya’s citywide CCTV network is equipped with Artificial Intelligence and programmed to capture footage over an extended 90-day period.
  • Vehicle Access Prevention Technology (Tyre Killers): This technology was employed to restrict unauthorized vehicles from entering the premises of the “Pran Pratishtha” ceremony venue.
  • Counter-Drone Measures: Implemented anti-drone technology that is capable of identifying and intercepting unwanted drones by scanning specific radio frequencies and recognizing drone models based on their command protocols.
  • Smart Traffic Management System: Ensuring seamless traffic flow, this system, strategically placed at 20 locations, facilitates trouble-free travel for visitors. In case of emergencies, vital information is transmitted to the central control room.
  • Crash-Tested Bollards: These specially designed bollards safeguard high-priority structures from coordinated vehicular attacks, scanning all passing vehicles along the Janmabhoomi Path.

The construction of the Ram Mandir in Ayodhya has not only been a testament to India’s rich cultural heritage but has also acted as a catalyst for economic development. The service sector, in particular, has experienced substantial growth, providing employment opportunities and fostering a more vibrant local economy. As the religious and cultural significance of Ayodhya continues to draw visitors from all corners of the world, the positive impact on the service sector is likely to endure, contributing to the sustained growth of the region.

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