Ayodha - A political agenda or an economic powerhouse?
You have to have been born yesterday if you’re not aware of the Ram mandir inauguration that’s making headlines everywhere.
We all know the political agenda behind it. But here’s the thing - with the economic impact the Ram mandir could have, it kills two birds with one stone.
Let’s see how..
[Disclaimer: Today’s read may be a bit longer than 5 minutes, since there’s a lot to cover, but trust me - the whole scenario is so interesting, you’ll feel like “there should have been a share button for every point”]
Okay, let’s go! We’ll look at the impact of the Ram mandir on various sectors, and also tell you how you can (or maybe cannot) benefit by investing 😉
1. First, Tourism
Well, this isn’t something you wouldn’t know - The Ram mandir will greatly benefit tourism, for not just Ayodhya, but for Uttar Pradesh in general. In fact, some experts believe that Ayodhya will become as important a destination as Vatican City and Mecca
Personally, I wouldn’t agree with this. You see, there are 50% more Catholics and 50% more Muslims in the world than Hindus, so I’m not sure that Ayodhya could be as big as Mecca or Vatican City. But with Modi’s brilliant marketing, you never know 🤷🏻♂️
Irrespective of whether it’s as big or not, tourism in Ayodhya is going to grow like crazy. Indian Hotels Company Limited (the group that owns Taj), Radisson, Marriott, Oyo and other small and large hotel chains have already announced that they’ll be constructing hotels and accommodation options in Ayodhya.
Fun fact: Radisson is the first international brand to open its hotel in Ayodhya, with an 80-room property. The price for Jan/Feb is roughly INR 20,000 a night. Kill me already.So, the UP government’s data showed that while there were 3 lakh visitors to Ayodhya in 2021, that number went to 2.3 crores the following year! And this is while the Ram mandir is not even made. Imagine the numbers after today.
Now if THAT isn’t crazy, I don’t know what is.
“Okay, tourism is a given, but how does it impact other sectors?” you’d ask.
See here’s the thing - thanks to the number of tourists, there will be additional development too. Let’s see what I mean.
2. FMCG
The FMCG industry feels that the floating (visiting) population of Ayodhya will now increase by 8-10X, which means more requirement for packaged products, soft drinks, snacks and other items.
“FMCG companies are ramping up distribution in the city anticipating demand surge of daily essentials, since Ayodhya is coming up as the biggest tourism centre of New India”
- Dhairyashil Patil, national president of the All India Consumer Products Distributors Federation
Mayank Shah, the senior category head at Parle products says that “the renovated Kashi Vishwanath corridor in Varanasi had led to significant surge in demand for us; Ayodhya is much bigger, so we are increasing distribution centres in Ayodhya, despite us already being strong in UP”
Well, you need those Parle G biscuits and Bisleri bottles while travelling after all, don’t you?
But like I said, it’s not just about tourists…
3. Real Estate
Real estate developers aren’t left behind either. Lodha Group’s The House of Abhinandan Lodha (HoABL) plans to invest INR 1,200 crores in a 51 acre project which includes a luxury hotel, residential plots, villas and high-rise luxury apartments.
Bollywood buffs, our very own Big B has invested in a 10,000 sq feet plot in the same project.
Now, these are all new projects, which means:
They will provide employment to thousands of people, and
They’ll generate revenue and contribute to taxes for the state
Ayodhya has observed a 50% increase in real estate prices after August 2020, when the foundation stone was laid by Narendra Modi. Capitalise on it when you can 😉
4. Infrastructure
“At present, more than 200 development projects worth Rs 30,923 crore are in progress in Ayodhya. We are working round-the-clock to ensure that all ongoing projects that aim to make Ayodhya the most beautiful city in the world get completed by 2024”
This is what Nitish Kumar, Ayodhya’s district magistrate told the media 2 months ago.
Well, he’s not wrong. This is how Ayodhya has developed from 1992 till today:
Roads, airport, railway station - Everything’s being transformed. And this means better connectivity of Ayodhya with the rest of India (and the world). Which in turn means better trade, and a better economy for the city (and eventually state - we’ll see how)
5. Startups
Well, my favourite part - It’s not just the giants and conglomerates that are benefitting from the Ram Mandir. Startups are working on it too.
Take for instance, Uber. They’re launching EV autos in Ayodhya, and also planning to start Uber Intercity and Uber Go rides there soon, adding Ayodhya to the list of 120-odd cities they’re active in. This means more business from tourists for Uber.
And it’s not just larger startups like Uber.
Gurugram-based Staqu Technologies will be deploying its AI software Jarvis to analyse video footage from 400 cameras in real-time to identify suspicious activity and potential threats, on the day of the inauguration.
And who knows, given the historical communal tension at the site, they might continue to operate even after the inauguration 🤷🏻♂️
Another startup called Srimandir will provide live coverage from Ayodhya for the Ram mandir inauguration.
Isn’t it cool how something driven by a religious and political agenda has so much economic impact?
But, what does UP gain from this?
Quite a lot, honestly.
For starters, Ayodhya will be another reason people will visit other places in the state too.
Think about it - Varanasi, the Ganga river and the Taj Mahal - all are in the same state. Why would you only want to go to Ayodhya and not the other places?
The Ram mandir will boost tourism not just for Ayodhya, but for Uttar Pradesh in general.
In terms of the economy, with all the new developments, Uttar Pradesh is expected to cross the $500 billion mark by 2027, which effectively means it’ll contribute to more than 10% of India’s GDP! And that’s pretty neat.
Approximately 178 projects, amounting to around Rs 30,500 crores, have been initiated to elevate Ayodhya into a world-class city.
According to the Confederation of All India Traders (CAIT), the Ram Mandir is expected to generate trade worth Rs 50,000 crore in January 2024
And guess who benefits from most of the taxes levied on this 50,000 crores?
You know it 😎
All in all, if things go well, Ayodhya will no longer remain a political agenda - it’ll turn into an economic powerhouse for the state, and the country.
So, how can you benefit by investing?
Buy stocks of Indian Hotels? Invest in FMCG stocks? Or buy Indigo/IRCTC?
Well, not really.
(Before moving ahead, this isn’t investment advice. It’s just my opinion)
You see, while Ayodhya as a whole will contribute a good amount to the economy, it’ll hardly make any difference to the revenues of these conglomerates.
Indian Hotels, for example has 260 properties. How much of monetary impact will another 2-4 properties in Ayodhya have on the overall revenue of the company?
Not much.
Same is the case with companies like Indigo and other listed FMCGs. The additional revenue will probably be a drop in the ocean for these conglomerates, and not be a game-changer for the company as such. Not any time soon.
What you can look at doing though, is putting money in smaller companies, entities or assets that are majorly dependent on Ayodhya. Think local infrastructure companies. Think local raw material manufacturers. Or think real estate (remember the 50% increase after August 2020?)
The flipside though, is that since these assets or entities are heavily dependent on Ayodhya, if things go south, your money also goes south.
Logic, really 😁
All in all, Ayodhya’s Ram mandir is no longer just a political agenda. It’s much more.
Before you go…
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See you next time!