Foreign brokerage Jefferies has said that the grand opening of the Ram Temple at Ayodhya will have a huge multiplier effect on the economy and could turn the temple city into a new global spiritual tourist spot that could attract over 50 million tourists per year.
“A $10-billion makeover (new airport, revamped railway station, township, improved road connectivity etc) will likely drive a multiplier effect with new hotels and other economic activities. It can also set a template for infra-driven growth for tourism,” it said in a note on January 21.
The Research Note highlighted that multiple sectors including hotels, airlines, hospitality, FMCG, travel ancillaries, cement etc will benefit from the expected increase in economic and religious migration in the town, leading to surge in tourism.
“Tourism contributed $194 billion to FY19 (pre-COVID) GDP and is expected to grow at an 8 per cent CAGR to US $443 billion by FY33. Tourism to GDP ratio in India at 6.8 per cent of GDP, puts it below most of the large emerging/developed economies,” the report stated.
Jefferies noted that the new Ram Temple has come at a cost of ₹1,800 crore and the $10 billion-makeover will transform the ancient city from a sleepy town to a global religious and spiritual tourist hotspot.
It highlighted that religious tourism is still the biggest segment of tourism in India. Several popular religious centres attract annual tourist traffic of 10-30 million despite the existing infrastructural bottlenecks.
Economic impact
Hence, the creation of a new religious tourist centre (Ayodhya) with improved connectivity and infrastructure can create a meaningfully large economic impact, it said.
On the significant infrastructure upgrade to facilitate Ayodhya tourism, the Jefferies note highlighted that phase 1 of a new airport at Ayodhya has become operational at the cost of $175 million and can handle 1 million passengers. Additional domestic capacity and an international terminal is expected by 2025 with a capacity to handle 6 million passengers.
Railway station has been upgraded to double the capacity to 60,000 passengers/day. A 1,200 acre greenfield township is being planned and road connectivity being beefed up as well, it added.