Ram Temple Fuels Ayodhya’s Economic Surge: Study Projects Rs 4 Lakh Crore Tourism Revenue

Last Updated:February 18, 2026, 16:13 IST

Post-consecration, redevelopment and capacity expansion projects worth approximately Rs 85,000 crore are underway, spanning roads, railways, urban renewal and airport expansion.

The construction and consecration of the Ram Janmabhoomi Temple in January 2024 has significantly reshaped Ayodhya’s economic landscape, leading a surge in tourism, investment and job creation, according to a new study by Indian Institute of Management Lucknow (IIM Lucknow).

The report, titled “Economic Renaissance of Ayodhya," examined the transformation of the temple town following the consecration of the grand temple. The report also described how faith-led infrastructure has become a durable growth driver, helping Ayodhya pivot from a low-capacity pilgrimage town to a high-footfall tourism hub.

The study has been authored by Venkataramanaiah Saddikuti of IIM Lucknow, KV Raju, Professor Emeritus at Chanakya University and economic advisor to the Uttar Pradesh government, and Gopika Varma of Indian Institute of Management Rohtak.

According to the study, more than 11 crore (110 million) devotees visited Ayodhya within the first six months after the consecration. Annual footfall is now projected at 5–6 crore, placing the city among India’s leading religious tourism destinations.

Before the temple’s construction, Ayodhya’s economy revolved around small-scale pilgrimage activity. Annual visitor numbers were modest, hospitality capacity was limited, national hotel chains had negligible presence, and the absence of an airport constrained connectivity. Employment opportunities were limited, leading to youth migration.

Post-consecration, redevelopment and capacity expansion projects worth approximately Rs 85,000 crore are underway, spanning roads, railways, urban renewal and airport expansion. These investments have helped crowd in private capital and expand the services sector.

Tourism-led economic activity is projected to generate Rs 20,000–25,000 crore in tax revenues over the medium term. The study estimated that tourism spending in Uttar Pradesh could cross Rs 4 lakh crore, with Ayodhya contributing a significant share.

“The scale of the economic turnaround surprised us. When we began the study, we did not anticipate such a sharp enrichment of the region. The temple has acted as a catalyst, and infrastructure has converted footfall into sustained economic activity," professor Saddikuti told Moneycontrol. “This is not a one-off spike. We are seeing repeat visitation, longer stays and higher spend per visitor, which is what makes the model durable," he added.

It is noteworthy that after assuming office in 2017, Chief Minister Yogi Adityanath accelerated the temple economy framework, coupling temple development with modern infrastructure expansion in Ayodhya, thereby opening pathways for broader economic prosperity.

The report further highlighted rapid employment growth across hospitality, construction, transport and services. Around 6,000 micro, small and medium enterprises (MSMEs) have been newly set up or revived in and around Ayodhya. Over the next four to five years, tourism expansion is expected to generate approximately 1.2 lakh direct and indirect jobs.

Small retailers and street vendors report daily earnings rising from Rs 400–500 earlier to as much as Rs 2,500. Real estate prices near the temple precinct have risen five to ten times, attracting investors from across India.

Between February 2020 and February 2025, the Ram Temple Trust remitted around Rs 400 crore in taxes, including approximately Rs 270 crore in GST, indicating growing formalisation and compliance, the authors noted.

Daily footfall of over two lakh pilgrims has sustained demand for hospitality and allied services. More than 150 new hotels and homestays have opened in the city. Major hotel chains, including Taj Hotels, Marriott International and Wyndham Hotels & Resorts, have announced expansion plans in Ayodhya.

Online travel platforms have reported up to fourfold growth in bookings. Tour operators said that pilgrims are increasingly combining visits to Ayodhya with trips to Varanasi, indicating the emergence of a broader spiritual tourism circuit.

Professor Saddikuti said that the Ram temple is shaping India’s emerging “temple economy" playbook, comparable to redevelopment-led tourism growth seen around Kashi Vishwanath Temple and Mahakaleshwar Temple.

“If connectivity, crowd management and last-mile services keep pace, Ayodhya can anchor a multi-city spiritual tourism circuit with measurable economic spillovers," he said.

Under the guidance of Prime Minister Narendra Modi and the leadership of Uttar Pradesh Chief Minister Yogi Adityanath, the temple-led development framework has gained academic validation, the report noted.

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