Unveiling the Economic Potential: A Closer Look at the Mahakumbh Mela 2025
- Himanshu Patni
- January 14, 2025
- BLOG, CONSUMER GOODS
- 0 Comments
Mahakumbh, the sacred pilgrimage occurs with in Span of 144 years and sprawls millions of devotees to the river Ganges bank for the bath. The upcoming Mahakumbh Mela 2025, is going to boost the economy of Uttar Pradesh as well as India remarkably. With the massive influx of pilgrims, and tourists there will be a surge in the demand for goods and services such as food, lodging, transportation, medical, basic amenities, etc. According to the website of the UP government, approximately 400- 450 million people across 183 countries such as the United States, Britain, Canada, and Germany from 6206 cities are expected to come.
Figure 1: Investment in Mahakumbh may further lead to further economic growth
The influx of tourists will exaggerate demand leading to more investment hence, the spillover effect
According to the chief secretary of UP, each person spending a minimum of INR 4000- 4500, with 45 crore people anticipated to come would generate revenue of up to INR 1.5 lakh crore in various sectors like transport, hospitality, food, social and cultural, etc. leading to job creation. According to the nodal officers, this Mahakumbh will generate revenue of around INR 25000 crores in the form of taxes, rentals and service charges, licensing and permits, and tickets. Injection of financial transactions is estimated to be of amount INR 2- 3 lakh crores due to economic activities such as local sales, services, and tourism. India Inc. will be spending around INR 3000 crore on marketing and branding during the event. Other religious sites such as Varanasi, Ayodhya, Mathura, and Vindhyachal are also to gain attention from tourists. Thus it may give a big push to the thriving economy of the state.
Figure 2: Getting insights into how demand for goods and services may generate revenue
The arrival of international tourists will bring foreign currencies, hence always a money spinner.
In the current scenario, as per RBI, the Indian rupee is struggling against the US dollar, and India is facing challenges in managing its exchange rate, this could give a spurt and stability to the gripping exchange rates. Further India’s GDP growth forecast has been slumped down at 6.4 % in 2024-25, as per NSO which is the slowest in four years. This decelerating forecast has been primarily due to fragile manufacturing and slower private and corporate investments. The flock of tourists arriving in India will certainly inject money boosting the investments thereby plunging the exchange rate.
Figure 3: How the arrival of tourists may benefit the exchange rate of the Indian rupee
Comparative analysis of the Budget allocations and revenue records of the previous Kumbh Mela
According to the Confederation of Indian Industry, Mahakumbh Mela 2013, with an expenditure allocation of 1152 crore generated revenue of around INR 12000 crore. Similarly, the 2019 Kumbh Mela with the expenditure of 4200 crore generated 1. 2 lakh crore of revenue. Hence, we can conclude that the revenue generated has always been multifold from the expenses and investment done. According to experts, the upcoming 2025 Kumbh Mela will also generate INR 1.5 to 2 lakh crore revenue.
The 2019 Kumbh Mela gave employment opportunities to 6 lakh people. As per the Uttar Pradesh government tourism department, the ongoing preparations for this Mahakumbh have already given employment to 45000 families in the region. Initial construction projects cost around 55000 crores for the upgradation of city facilities and infrastructure for the Kumbh.
For the upcoming 2025 Kumbh Mela, the UP government is investing INR 6990 crores focusing on cleanliness, security, and smooth hassle-free pilgrim convenience. As it has already seen enormous infrastructural investment the government has made huge expenditures on the infrastructure such as on the construction of a six-lane bridge over the Ganga, and a four-lane railway over the bridge costing INR 275 crore. With the enormous expenditure of around INR 7000 crores for the construction of 14 ROBs (road overbridges), RUBs (road underbridges), 61 roads, 40 intersections, and railway lines.
Figure 4: Expenditure and revenue of Kumbh Melas (Values in INR crores)
This fair has zenith potential to benefit local businesses generating employment opportunities.
With the construction of the Kashi Vishwanath door, Ayodhya temple in Uttar Pradesh state had become the epicenter of domestic tourists in India in 2024. Further, the organization of Kumbh Fair State will pull the tourists and can be a major economic hub. Many sectors such as hospitality, tourism, transportation, retail, and manufacturing unorganized sectors such as (diya making, vermillion, flowers, incense sticks, boatmen, textile, furniture, street vendors, artisans, small shop owners, tentsman, contractors) are going to benefit from this fair. According to the authorities, this Mahakumbh will have tents for the Kumbh administration, authorities, emergency assistance, hospitality, and the government. The meticulous branding of Kumbh-themed products such as diaries, calendars, jute bags, and other stationery will benefit the Print and stationery industry as well as the local handicrafts, and artisans. From the analysis, we can see that among local businesses, basic items will have prominent profit shares of around 49%. After that Milk & Dairy items along with groceries will have shares of around (11%) in the revenue generation. After that Puja items (6) %, Vegetables (6%), Edible Oils (3%) will also gain. Boatmen, Flower Trading Travel, Bed Mattresses, Plastic cans, and Firewood will also have a substantial share of around 1% in the fair. From this, we can conclude that every business segment is in a win-win situation and traders from every sector will benefit from this fair. Even regional players such as Bisleri Water, Haldiram, Bikaner, and other market players may take advantage of it.
Figure 5: Expected revenue generation to the local region (Values in INR crores)
How it can be beneficial to other sectors such as IT, Manufacturing
For crowd management, the administration has installed 2300 CCTV cameras across Mahakumbh and Prayagaraj for the surveillance of crowds, incidents, etc. With the assembly of large crowds, the need for basic amenities will adhere to uplift the production of cameras, drones, and monitor screens hence benefitting the manufacturing and electrical and electronic sectors. Similarly, in this digital era, people nowadays use digital payment apps instead of using cash for their meager expenses. For proper surveillance and communication, there will also be increased demand for data usage and calling tariffs hence boosting the telecommunication sector. Other sectors such as Saas companies, and IT will also gain as there will be huge requirements for software developers, QR code developers, and smooth working for the websites. Hence, Kumbh Mela has great potential for several industries such as IT, Manufacturing, Electrical & Electronics, Telecommunications, Fintech etc.
It may have a tremendous impact on the financial market.
With the incursion of tourists, hotels, hospitality, railway, and helicopters are seeing massive bookings ahead of the Mahakumbh Mela due to which several stocks belonging to sectors such as hospitality, retail, food, transportation, aviation, FMCG, etc. may see gambol in their stock prices. According to business experts, tourism and telecommunication sector stocks such as (Thomas Cook, Yatra, Make MyTrip, Ease My Trip, Rate Gain, and Genesys) may become bullish. Similarly, the hospitality sector stocks such as (Indian Hotels Company Limited) and food and beverage companies (Zomato, Swiggy) may rise. Railway with 10,000 regular and 3000 special trains for the short and long routes along with the “Ring-Rail” service for taking the devotees to other sacred places such as Chitrakoot, Banaras, Ayodhya is all set to welcome the devotees. Railway stocks such as (Indian Railway Nigam Limited, and IRCTC) and aviation stocks such as (Indigo) are expected to see a high rise. Other stocks that may gain are from Security services companies such as (SIS, and Allied Digital). It may also boom telecommunication sector stocks such as (Jio, Airtel), etc. It may also give a boom to software services, medical, FMCG, Textile, Food, and other sectors as well.
Along with proper accountability, vigilance & coordination government should also focus on providing a trade environment for businessmen and merchants.
Mahakumbh Mela 2025 is going to happen on a large scale flocking millions of people anticipated to have an efficacious impact on the socioeconomic growth of the state and India. Many government departments and agencies, as private players will be engaged in crowd management, planning, infrastructure arrangements, monitoring, etc. to make this fair a successful, hassle-free pilgrimage site.
It should also make specific arrangements for differently abled person, and for their safety and security. The government should also lay emphasis on making special arrangements for the NRIs, businessmen, and other traders who could deal directly at Prayagraj easily. It will be easier for them and the Indian traders as well as at one place, they may take benefit of religious events while simultaneously seeking their business interests.
It should learn from the past, the discrepancies that happened in the past such as lack of coordination, synchronization, vigilance, and real time response by the officers should be avoided. Allocated funds should be used properly with proper accountability and Red-tapism, corruption, and tax theft should be avoided. Kumbh being the religious ceremony has an important socio-economic impression and can be a big push in the bolstered growth of Uttar Pradesh which is all set to turn this religious, social-cultural gathering into a positive economic opportunity that aspires to be a 1 trillion economy.