Economic Highlights

New Delhi, 22 January 2024

Ayodhyanomics Energises UP

LIGHTING UP THE GRAY AREA

By Shivaji Sarkar 

Ayodhyanomics unveils an ambitious vision with Rs 85,000 crore investment for the township of 30 lakh people, as majestic Rs 1800 crore Ramlala Mandir sets to open on January 22 amidst grand celebrations and inauguration by Prime Minister Narendra Modi.It is wonder economics. The state government invests a mere Rs 20 crore for Ayodhya for housing schemes and the largesse goes to Agra and Varanasi, Rs 400 crore each, Moradabad and Meerut Rs 200 crore each, New Kanpur Rs 170 crore of a toral Rs 3000 crore allocation for housing schemes. 

The Sri Ram Janmabhoomi Teerth Kshetra Trust estimates the cost at Rs 1800 crore to be met from an approximate collection of Rs 5500 crore. This is swelling.More than its economics, the politics around Ram keeps people more engaged. Not only the BJP sees it as the trump religious card, even the Opposition finds it uncomfortable, if not troublesome to handle. 

The small township of less than 5 square km sees flurry of activity to welcome an estimated 45 lakh visitors and the Ayodhya commissioner says it would see an investment boost of Rs 85000 crore over the next ten years. This is largely an estimation. The dream is of turning it into a hub to rest on 178 projects and an array of various levels of hotels, OYO with 1000 beds to a number of 5-star hotels. 

A contrast is Jagdishpur industrial hub, 66 km from Ayodhya, attempted to be developed in 1980s by Sanjay Gandhi and after him Rajiv Gandhi with thousands of crores of public sector investments. The latest of that was in the 2012 plan for creating a food hub. It all collapsed partly for it being an interior area and largely for unsustainable business model and as some alleged because of unfavourable political atmosphere. 

Ayodhya is seeing building of roads, bridges, new railway station, airport to water metro service and similar other facilities and cultural centre.The redevelopment of Ayodhya, as envisaged in Master Plan 2031, broadly hinges on eight themes to guide civic authorities for the upcoming smart city. The scheme includes a spiritual university, a green-field township, an urban forest, to name a few. Other highlights include a central business district, hotels, riverfront, water bodies, and dharmshalas. The footfall as of now is said to be around 30000 a month. 

Property prices, as per industry sources, have risen nearly four times over the past three years. Top five-star hotel brands such as the Taj, Radisson, ITC are opening new properties to cater to the projected rise in demand. In fact, over 73 new hotels are in the pipeline in Ayodhya. A new property, Ayodhya Tent City, has also come up and offers stay at luxurious tents.   

Indian Hotels (IHCL) launched two new hotels in Ayodhya under the Vivanta and Ginger brands. Both are greenfield projects in partnership with Bhardwaj Global Infraventures. “Ayodhya is an important pilgrimage site and likely to receive high footfall throughout the year. These hotels will also complete the travel circuit with Lucknow and Varanasi”, IHCL said in a statement.

Interestingly, civic authorities are projecting a ratio of 1:10 of residents to tourists. According to industry estimates, around 3.25 lakh tourists visited Ayodhya in 2021 and the following year this number rose to 2.39 crore. Now, after the inauguration of the temple, local authorities are expecting over 4 crore pilgrims to visit Ayodhya this year.The state-government has promised that the holy town will become a world-class city in the coming years with modern amenities around its cultural aesthetics. 

There are 324 five-star hotels in the country. Agra is said to have a dozen, but they do rarely have full occupancy as most people prefer to stay in Delhi and make short trips. Vrindavan a popular pilgrim centre has no 5-star accommodation. Pilgrims spend moderately. The ground breaking ceremony in Ayodhya, scheduled for February, will launch 126 hospitality sector projects worth Rs 3,800 crore. This includes four mega projects, including hotels and resorts. The largest investments in the district are in the hospitality sector, totalling Rs 420 crore. Out of the 126 projects, 46 have MoUs signed, worth Rs 1,923 crore. 

Ayodhya has been one of the low priority stations for most devouts. The hype created would need efforts to sustain. The government investment is low and so far, it seemingly has not much of an industrial activity planned. The flow of tourists at ratio 1:10 or residents would be the only factor for sustaining an economy. 

The political atmosphere contributes a lot to sustain a project. Jagdishpur, launched with much fanfare did not succeed. The region was planned to become an industrial hub and public sector companies were forced to setup factories in the region, irrespective of feasibility and concerns of profitability. Many big PSUs like SAIL, HAL, BHEL and thousands of small companies set up units in the area out of political compulsions. The region flourished as the PSUs pumped money to set up factories but in less than a decade, decline began as almost all the 135 units turned out to be unprofitable because the region is not feasible for industrial development. Even Malvika Steel, a Rs1500 crore mega plant of SAIL and Rourkela Steel collapsed despite central government financial support from 2012 to 2014. 

Similarly, Amethi, 100 km away from Ayodhya suffered what congressmen say, “politics of revenge” and BJP minister Smriti Irani says unviable projects pushed by the UPA government. The few projects that could ultimately be propped up failed to bring about the promised growth and development. The fate of several projects pushed by UPA 2 in its final months now hang in balance. 

Small traders are having a spurt in business. There is growing demand for handicrafts such as decorative pendants, bangles, lockets, key rings, garlands, among others. Exports from Ayodhya, according to reports, rose by 130 percent to Rs254 crore in 2023. 

Ayodhya has not much of public investments. It is designed mostly to survive on private investments. Dinesh Goyal, Vice President, Indian Industries Association, told the press that he expects a business turnover of Rs50,000 crore because of ongoing preparations ahead of opening ceremonies at Ram Mandir. Business entities across the country are capitalising on these opportunities. A tall order or not, the unfolding developments beyond the temple consecration would reveal.---INFA 

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