Maha Kumbh Mela 2025: A Major Economic Driver for Uttar Pradesh
Being held in Prayagraj, Uttar Pradesh, is poised to become one of the largest economic events in the region, with an anticipated turnout of 40-45 crore devotees and tourists. Spanning 10,000 acres, this religious congregation is expected to generate substantial economic activity, making a significant contribution to both the state and national economy.
The Maha Kumbh Mela, held after every 144 years, is not only a major spiritual gathering but also a powerful economic driver. The 2025 edition will take place over 45 days and is expected to witness an unprecedented number of pilgrims and tourists.
- With an estimated economic turnover of Rs 160,000 crore, this event will impact sectors such as hospitality, transportation, retail, and tourism, contributing significantly to Uttar Pradesh’s economy.
- The estimated average spending of Rs 5,000-10,000 per person will cover airfare, accommodation, food, and local travel, while additional purchases like souvenirs and clothing will further boost economic activity.
- The total economic impact is expected to reach Rs 4 lakh crore, boosting India’s GDP by over 1%, increasing local business demand, and created jobs for over 45,000 families just during the preparations.
- The Maha Kumbh Mela will also generate significant trade, the Confederation of All India Traders (CAIT) projections of staggering Rs 2 trillion in transactions. Regional tourism will be boosted in neighboring cities like Varanasi, Mathura, and Ayodhya, contributing further to the state’s economic growth.
Infrastructure and Investment
- In preparation for the event, the Uttar Pradesh and Central governments have allocated Rs 5,436 crore and Rs. 2100 Crore respectively, with Rs 5,600 crore earmarked for infrastructure improvements.
- These upgrades include roads, bridges, sanitation, and public amenities, such as a six-lane bridge over the Ganga and 150,000 toilets. The event venue spans 10,000 acres and will feature 80,000 tents, 12 km of ghats, 30 pontoon bridges, and 67,000 streetlights.
Environmental Focus
- Environmental sustainability is prioritized with a “zero discharge” policy for rivers and measures to protect the ecosystem during the massive gathering.
- Fairgrounds are designated as plastic-free zones, with a complete ban on single-use plastics.
- Robust sanitation infrastructure includes 12,000 FRP toilets, 16,100 prefabricated steel toilets, and 20,000 community urinals, supported by a strong waste management system with 20,000 bins and 37.75 lakh liner bags.
- Over 500 industrial units in 11 districts are required to maintain “zero” discharge and only engage in dry production to prevent water pollution during the Mahakumbh.
Repo Rate Policy:
- For the first time in five years, since the extraordinary Covid-induced rate cuts, the Reserve Bank of India (RBI) rate-setting monetary policy committee (MPC) announced for a 25 basis points cut in the benchmark repo rate to 6.25% on 7th February, while cash reserve ratio (CRR) was maintained at 4%.
- A decline in GDP growth, moderating inflation, and low urban consumption prompted the Reserve Bank of India (RBI) to reduce the repo rate aiming to stimulate economic activity and provide support to growth in a challenging economic environment.
- Economic Growth: Lower borrowing costs drive economic growth by helping businesses expand and create jobs, while also making borrowing more affordable for homebuyers and loan borrowers with reduced EMIs and lower interest rates.
- Lower repo rates could make savings less attractive, prompting consumers to explore stocks, mutual funds, or real estate. While this may weaken the currency and raise import costs, it could boost export competitiveness. Additionally, increased spending from rate cuts may drive inflation, potentially surpassing the RBI’s target of 4% within a +/- 2% band.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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