Ram Mandir opening: Total expenditure by tourists in UP to surpass Rs 4 trillion this yr

Given the completion of Ram Mandir in Ayodhya this year and a melange of initiatives taken by the UP government to promote tourism, the research wing of State Bank of India expects the total expenditure by tourists, both domestic and foreign,  in Uttar Pradesh may cross Rs 4 lakh crore mark by the end of this year. 

SBI Ecowrap estimates that the state government earn an additional tax revenue of Rs 20,000-25,000 crore due to a huge spurt in several tourists during fiscal year 2025.

The Centre's Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (PRASHAD) scheme, coupled with other state government initiatives is set to play a role in developing the spiritual travel industry in India, as per the SBI Research report. The surge in spiritual tourism has already significantly transformed the tourism landscape in UP and has resulted in an improved physical and digital infrastructure, facilitating accessible connectivity, spurring a substantial increase in travel, encouraging people to engage more meaningfully with the historical sites.

 

UP, with its numerous holiest places and shrines, such as the Ganga River, Varanasi, the Taj Mahal and now the new Ram Temple in Ayodhya, has seen domestic tourism increasing at a breath neck pace.

In 2022, 32 crore domestic tourists visited UP, of which 2.21 crore tourists were in Ayodhya only, an increase of almost 200 per cent.

"Based on the expenditure provided by NSS (at all India level), the total expenditure done by domestic tourists is around Rs 2.2 lakh crore. Including Rs 10,000 crore expenditure done by foreign tourists in UP, total expenditure in UP by tourists is Rs 2.3 lakh crore.Given the completion of Ram Mandir in Ayodhya and initiatives taken by the UP government to promote tourism, we believe that the total expenditure by tourists in UP may cross Rs 4 lakh crore mark by end of this year," said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.

Average expenditure per overnight trip by categories of expenditure done by Domestic and Foreign Tourists in UP

The ascent of UP as the face of New India 

Pre-Pandemic (2019), India’s share in international tourism receipts was a meagre 2.06 per cent with a distant ranking of 14th. Even in Asia-Pacific region, it commanded just 7 per cent share with a sixth rank.

" As a counter measure, in recent years, central government's PRASHAD (Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive) scheme, in conjunction with partnering states has played a crucial role in the development of spiritual travel, creating an enabling ecosystem by augmenting infrastructure while disseminating knowledge at tier III and tier IV cities too as travel and hospitality sector integrates and gears up for the mega makeover to serve the hitherto unserved. The state government can devise an encompassing travel itinerary that gives the discerning tourists a glimpse of the enchanting history across multiple places of importance in the state as also surrounding states on a hub and spoke model. Going forward, India can look forward to creating a tourism map that seamlessly connects the historical places here with those of Angkor Wat, Sri Lanka, Batu Caves, Pashupatinath, Prambanan for the new age salvation," noted the report.

UP ranked 1st in Domestic Tourist Visits in 2022; 5th in Foreign Tourist Visits

The share of Uttar Pradesh in India’s GDP is rising continuously

As India marches towards a $5 trillion economy by FY28… Maharashtra and Uttar Pradesh to break the $500 bn threshold and contribute 10% to India’s GDP.

India is expected to achieve the $5 trillion economy by FY28, for which it needs to grow by CAGR of 8.4 per cent till 2027 (in dollar terms). This translates into 11.0-11.5 per cent nominal GDP growth per annum (in Rs terms), which is achievable, the report added. 

"UP will be one of the two states which will break the $500 billion mark in 2027 (or FY28) when India achieves third place in the global economy. The GDP size of major Indian states in 2027 will be more than the size of some of the European countries like Norway, Hungary, etc.," said Ghosh.

UP is estimated to have the second most weightage in Indian GDP by FY28 and its GDP could overtake Norway, the Scandinavian country with the second position in Human Development Index (HDI).

UP has also been fuelling the wealth creation through capital markets, adding maximum number of new investors during activity-filled FY20-24 as its share vaults over 10% as per bourses/depositories data. Incidentally, the state’s share in assets under the management of mutual funds has also increased at a higher rate than all of India in the last five years. Basis the CBDT data, UP has been instrumental in increasing the tax base with the highest number of taxpayers, a trend reversal from other states.

UP’s share in Investments, Infrastructure is rising: Key points from the report. 

1. PLFS (Periodic Labor Force Surveys) data shows youth unemployment has declined considerably in UP post pandemic (2023 compared to 2021), enabling the state to clinch third spot (after Uttarakhand and Kerala) while LFPR (Labor force participation rate) for female (15-29 years) has significantly improved for the state in 2023 compared to 2021….Enablers could be enhanced focus on Digital Didi schemes that take financial literacy to next level, enabling financial freedom for women across latitudes as they join mainstream
2.  Uttar Pradesh holds highest share in PMJDY accounts/PM-SvaNIDHI loans. Also, it has showed the biggest increase in share in both PMJDY and PMMY accounts since FY19, signifying the success of the financialization drive at scale and formalization of myriad informal strata
3. Uttar Pradesh was placed at number 2 spot in Ease of Doing Business report of 2019 by DPIIT. As per the revised BRAP (Business Reforms Action Plan) data released in June’22 by DPIIT, it figured in the Achievers category along with states like Maharashtra and Madhya Pradesh with a clear thrust on attracting investment.
4. The state has increased two-fold its installed power generation capacity between FY2014-22, reaching a little over 29 Gigabytes of capacity.
5. The state’s performance in both SCB’s deposit accretion and credit deliverance in the last 5-years has been robust. Deposits grew by a CAGR of 10.4% while Credit grew by a CAGR of 13.1%, significantly better than the All-India average of 9.4%. Analysing the share of major states in cost of projects sanctioned by Banks/FIs reveals Uttar Pradesh received the largest share (16.2%) in FY2023 while the three-year average comes around 11%.
6. Uttar Pradesh enhanced its stake in innovations during the last decade (7.2% share during 2014-23 vis-à-vis 5% share during 2004-13 in patents filing), fueling the India innovation story as the country positions itself as a knowledge economy benefitting the global ecosystem.
7. Uttar Pradesh accounts for a higher share in Ayushman Bharat Health Accounts cards and health facilities registered under the scheme and also increased the secondary/higher secondary enrolments since 2017
8. Uttar Pradesh should immensely benefit from the ambitious Delhi Mumbai Industrial Corridor (DMIC) forming the backbone of the Western Dedicated Freight Corridor (DFC) connecting Delhi and Mumbai/Gujarat positioning it as a two-way gateway to major industrial territories across Eastern and Western geographies