18 crore devotees, 1.2 lakh jobs, over 400 crores in tax revenue: Read how Ram Mandir is transforming Ayodhya into a global pilgrimage site, changing people’s lives

On 5th August 2020, Prime Minister Narendra Modi laid the foundation stone of Ram Janmbhoomi Mandir and the grand opening took place on 22nd January 2024. This significant occasion not only revitalised India’s cultural consciousness but also positioned Ayodhya as a prominent economic centre, transcending its previous identity as solely a religious area. Its development is attributed to the key initiatives taken by the government of India and the Yogi Adityanath government of Uttar Pradesh.

For centuries, Indian temples have served not only as centres of faith but have extensively contributed to the improvement of the local economy, job creation and infrastructure growth. Pilgrimage destinations such as Tirupati, Vaishno Devi and Shirdi exemplify this as well. Now, Ayodhya is continuing this legacy by emerging as a new paradigm for the integration of modern progress and cultural heritage.

Indian Institute of Management (IIM), Lucknow, released a report entitled “The Economic Renaissance of Ayodhya, India: A Case Study on Sri Ram Mandir” which details how the holy site has transformed the economy of Ayodhya.

What is the size of India’s temple economy

The temple economy encompasses all economic activities tied to temples, including visits by devotees for darshan, pilgrimage tourism, temple administration, prasad, floral garlands, accommodations, transportation and various other services. In ancient times, when local economies were predominant, temples created jobs and business opportunities for the surrounding communities. Pilgrimages generated jobs for shopkeepers, artisans, priests, guides and numerous other workers.

Varanasi, Madurai, Pushkar, Ujjain and others illustrate the same. These cities are distinguished not by major industries but by their popular temples and pilgrimage locations. The economy surrounding these temples has supported these cities for centuries. Ancient Indian texts emphasise that temples should be involved in social and economic ventures that benefit all segments of society, particularly the marginalised and foster balanced development.

According to estimates from the State Bank of India (SBI) and many economic analysts, India’s temple economy contributes roughly ₹3.02 lakh crore to ₹6 lakh crore each year. This accounts for about 2.3% to 3% of the nation’s total Gross Domestic Product (GDP). Similarly, Ram Mandir is playing a vital role in influencing Ayodhya’s economy, positioning the city among the foremost pilgrimage sites globally.

The Ram Janmbhoomi Teerth Kshetra Trust has contributed nearly ₹400 crore in taxes to the government from 5th February 2020 to 5th February 2025. This total includes ₹270 crore in GST (Goods and Services Tax) and ₹130 crore in other taxes. The government is projected to receive around ₹400 crore in GST from the temple.

Growing economic impact due to crores of devotees

The economic influence has surged dramatically since the opening of the temple in Ayodhya. Religious tourism has provided an extraordinary boost to the transportation, hotel, food, trade and donation sectors. The report from IIM Lucknow indicated that 13.77 crore devotees visited Ayodhya between January and September 2024, with an estimated total of ₹16-18 crore by the end of the year.

On the other hand, the Vatican in Italy welcomes roughly 0.9 crore visitors each year, whereas Mecca, the most sacred pilgrimage site for Muslims, witnesses nearly 2 crore people. Ayodhya is likewise set to exceed many other religious places and become a notable pilgrimage destination, expected to generate over 100 billion rupees in tourism revenue annually by 2025-26.

The analysis conducted by the SBI suggested that the economic impact of pilgrimage and linked activities in Ayodhya alone is projected to surpass ₹4 lakh crore in the fiscal year 2024. This highlighted that the temple is yielding substantial economic advantages from the influx of devotees, including services such as tourism, hospitality, retail and transportation.

The temple’s popularity became apparent as donations surpassed ₹3 crore in a single day after the consecration ceremony. This pointed out that there is a substantial economic impact associated with the faith of the devotees. The Uttar Pradesh government is estimated to receive an additional ₹25,000 crore in tax revenue during the fiscal year 2025. This amount consists of GST and other taxes. As a result, the state’s earnings from temples and tourism are also increasing which can be utilised for developmental projects.

Ayodhya is undergoing a swift development in the hotel and lodge sector. More than 150 hotels and lodges either have been completed or are at various stages of construction. Prominent hotel brands like Taj Hotels, Radisson and OYO are also pushing their presence there. The average hotel occupancy ranges from 60% to 70% throughout the year. During festivals and special events, this percentage soars to 100%, outlining the non-availability of rooms.

Additionally, international food chains such as Domino’s and Pizza Hut have opened outlets in Ayodhya. This development is creating new job opportunities for locals and enhancing the city’s economy.

Historic surge in employment and real estate

According to reports, the construction of the temple has directly provided jobs to more than 1,000 individuals connected to the Ram Janmbhoomi Teerth Kshetra Trust. This conveyed that over a thousand persons are consistently engaged in the management, security, administration and other functions of the temple.

The situation was even better during the construction phase when mre than 50,000 labourers participated in the temple’s construction at different stages. This workforce included masons, engineers, stone carvers, transport personnel and others. This development raised the income levels of several families.

There was a massive spike in both direct and indirect employment following the completion of the temple. Approximately 1.2 lakh new jobs were generated, involving both direct and indirect roles. These positions surfaced in various sectors, including hospitality and tourism, handicrafts and the trade of religious items, local transport and tour guiding services. Many people found new jobs or more sources of income across different sectors.

Land values also experienced a dramatic hike as the prices fluctuated between ₹400 and ₹800 per square foot before 2020. However, these prices escalated to between ₹4,000 and ₹10,000 per square foot by 2024. This marked an almost tenfold increase within a mere four years. Consequently, Ayodhya has become an attractive destination for investors.

Shopkeepers offering religious products have experienced a notable uptick in sales. Specifically, the Geographical Indication (GI)-tagged gram flour laddu producers and local craft artisans have witnessed a remarkable boost in their earnings. The demand for these items is also growing with the rising number of pilgrims.

Several small vendors reported earnings exceeding ₹5 lakh in 2024, marking a substantial improvement compared to previous years. Additionally, new markets, shopping centres and malls are being built which is anticipated to further improve employment and business prospects in the coming years.

Road, Rail, Airport: Ayodhya’s infrastructure focus

The government has announced an investment of over ₹85,000 crore as part of the Ayodhya Master Plan 2031, aimed at transforming Ayodhya into a contemporary and world-class spiritual city. The objective extends beyond merely enhancing the temple area and encompasses the comprehensive development of the entire area in a structured manner to provide improved facilities for the increasing population and pilgrims in the near future.

The plan prioritises the construction of new roads, the enhancement of drainage systems, the implementation of smart traffic management systems, the creation of modern bus terminals and parking zones alongside the expansion of urban amenities. Ayodhya is being developed as a well-organised and clean city. The infrastructure for roads, airports and railway stations has also been upgraded.

The Maharishi Valmiki International Airport which commenced operations in December 2023 has significantly improved Ayodhya’s connectivity. It accommodated over 11 million passengers in FY (fiscal year) 2025, marking a 423% increase from previous years. This indicated that a substantial number of individuals from both India and abroad can now access Ayodhya directly. The future plans include expanding its capacity to accommodate 100 million passengers annually.

Furthermore, the Ayodhya Dham Junction railway station has undergone renovations and now features an impressive design, upgraded waiting areas, escalators, elevators and modern facilities. Similarly, new expressways and broader roads have linked Ayodhya with Lucknow, Varanasi, Prayagraj and Gorakhpur. This development has shortened travel times and boosted trade as well as logistics operations.

Ayodhya: Before 2021 and in 2025

The contrast between Ayodhya before 2021 and in 2025 is evident. The city had just 500 e-rickshaws prior to 2021, which surged to 17,000 by 2025, signifying a remarkable enhancement in mobility. The hotel sector has undergone a substantial change with the number of hotels, including five-star establishments, rising from 20 to 200 by 2025. Banking services have expanded from 15 to 60 branch offices, reflecting an increase in economic activity and investment.

The number of electronics stores has grown from 108 to 401. The number of petrol and CNG pumps has risen from under 50 to over 75, indicating the growth of vehicles and transportation. The count of street vendors has also escalated from 500 to nearly 2,000, demonstrating a fourfold increase in small enterprises and self-employment. In summary, Ayodhya in 2025 appeared to be far more dynamic, highly commercial and progressing at a significantly faster pace than it was in 2021.

The development of Ayodhya is now impacting not only the city but also the neighbouring districts. Economic activities have surged in Faizabad, Basti, Sultanpur, Amethi, Lucknow and Gorakhpur. There is a noticeable increase in the number of hotels, guest houses and dharamshalas in these regions. Furthermore, logistics hubs and transportation services have seen significant expansion.

These economic developments clearly indicate that the Modi and Yogi governments are not merely focused on constructing the Ram Mandir, instead, the two are working towards the development of Ayodhya as part of a larger vision. They are striving to ensure that Ayodhya is termed as one of the premier locations on the world map as a major pilgrimage sites.

Read the report in Hindi here.