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regular-article-logo Sunday, 21 July 2024

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UP govt's planned 1,000-acre township in Ayodhya is expected to attract huge investments to and generate significant revenue in the real estate sector

Khushboo Aggarwal, Amit Kumar, Puja Pal Published 17.06.24, 06:54 AM

Sourced by the Telegraph.

There is now an environment conducive for the growth of spiritual tourism. Data from the ministry of tourism suggest that the number of domestic tourists who visited places of pilgrimage was 1,433 million in 2022; the figure was 677 million in 2021. The places of religious tourism earned Rs 1,34,543 crore in 2022, up from Rs 65,070 crore in 2021.

Spiritual tourism refers to people travelling to holy places for religious purposes. It has been instrumental in shooting up real estate prices in some places in India. The limited supply of property at sacred destinations, coupled with steep demand, is triggering a massive real estate boom. Property prices in Ayodhya have risen by 4-10 times from what they were four or five years ago. One estimate by the property consultant, Anarock, suggests that real estate prices rose by 25%-30% after the Supreme Court verdict on the Ram temple. Investments in infrastructure are leading to domestic and foreign investors purchasing land near the temple, aggravating prices further. Research by Magicbricks shows that the average prices of real estate increased by 179% between October 2023 and January 2024. By the next decade, real estate prices are expected to rise by 12%-20% due to religious tourism in the city. The Uttar Pradesh government's planned 1,000-acre township in Ayodhya is expected to attract huge investments to and generate significant revenue in the real estate sector.

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A similar trend is visible in Ujjain. The Kashi Vishwanath corridor has led to drastic increases in property prices in Varanasi. Vrindavan, Rishikesh, and Shirdi are also witnessing a similar phenomenon on the basis of demand for hotels, ashrams and retirement homes.

In the interim budget of 2024-25, the Centre allotted Rs 2,449.62 crore for tourism development around key religious sites in the country. The idea was to develop prominent spiritual centres with quality services and facilities. The states were encouraged to develop ‘iconic tourist centres’ and market them globally. Interest-free loans are being disbursed for this purpose. The Pilgrimage Rejuvenation and Spiritual Augmentation Drive scheme had been launched in 2014-15 for the beautification and infrastructure development of select religious sites. Various state governments have announced the development of tourist circuits in their respective states. Rajasthan, for instance, announced the ‘Sarva Dharma Sambhav’ and the ‘Shekhawati Circuit’ under which religious sites belonging to different faiths would be renovated and promoted.

The contribution of spiritual tourism stands at around 2.32% to India’s gross domestic product which, in turn, translates to approximately Rs 3.02 lakh crore (National Sample Survey Office 2017). The real estate industry is one of the largest sectors in India contributing around 6.5%-7% to India’s GDP. The Covid-19 pandemic had wreaked havoc on India’s economic health. Its impact on the real estate sector was quite harsh, leading to the creation of a liquidity crisis among real-estate developers. The spurt in religious tourism has come as a respite for India’s real estate sector. Furthermore, the upward growth trend in the real estate sector will also create a ripple effect in other associate sectors, leading to greater employment opportunities, higher incomes, and better standards of living.

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