The Mahakumbh festival in Uttar Pradesh has not only been a spiritual gathering but also a powerful economic booster for the state, significantly contributing to its GST collections and the broader economy. Over the months of January and February, Uttar Pradesh witnessed a remarkable increase in GST revenue, driven by the influx of visitors attending the religious event. The state’s GST collections surged by over ₹1,000 crore during this period, compared to the same months last year, showcasing a double-digit growth that outpaced the national average of 9% in February.
GST Growth and State Comparisons
During this period, Uttar Pradesh achieved a GST growth rate of 11% in January and 14% in February. This performance positions the state closer to the top-performing states like Maharashtra, Gujarat, Tamil Nadu, Haryana, and Karnataka, whose growth rates range between 7% and 20%. Uttar Pradesh’s growth rates for the same months last year stood at 10.8% and 8.4%, respectively, making this year’s figures a substantial improvement. The state’s economic rise due to the Mahakumbh is reflective of the broader impact of large-scale events in boosting local economies through increased consumer spending.
A Boon for Local Businesses and Key Sectors
The Mahakumbh had a widespread impact on Uttar Pradesh’s economy, particularly in sectors such as travel, hospitality, transportation, and local businesses. Over 60 crore visitors participated in the religious gathering, which led to increased consumer spending. As highlighted by Chief Economic Advisor V. Anantha Nageswaran, the significant spending from visitors is expected to contribute positively to India’s GDP growth, particularly from the expenditure side. This surge in economic activity from both domestic and international visitors has acted as a powerful engine for business growth across the state.
Digital Payments and GST Collections
According to Professor Manmohan Krishna, Chair Professor at the University of Allahabad, the use of digital payments by visitors to holy cities like Prayagraj, Varanasi, and Ayodhya played a crucial role in facilitating GST collections. The high prices of goods and services, including room tariffs, food, and local offerings, further boosted GST revenues. However, Krishna noted that the overall collections would have been even higher if cash transactions were lower. Despite this, the Mahakumbh’s use of digital payment methods was a significant step forward in promoting transparency and ease of transaction for businesses.
Economic Turnover and Employment Opportunities
Experts agree that the Mahakumbh has had a transformative effect on Uttar Pradesh’s local economy. Professor M.K. Agrawal from Lucknow University suggested that the state’s business turnover could be in the range of ₹3-4 lakh crore, despite limited public investment. The event has stimulated a wide range of businesses, from food chains and transport services to retail outlets and temporary employment ventures. Agrawal also noted that many individuals who would typically migrate in search of work might now be tempted to explore self-employment opportunities in response to the economic boom created by the Mahakumbh.
Long-term Economic Benefits
In addition to the immediate economic boost, the infrastructure upgrades associated with the Mahakumbh will bring long-term economic benefits to the state. Projections indicate that the event will have a substantial financial impact, with estimates of a ₹3 lakh crore economic boost. Furthermore, around 30-40 lakh temporary jobs were created during the festival, with a significant percentage expected to transition into permanent employment, helping sustain the local economy in the long run.
Professor Anup Kumar Mishra from DAV PG College in Varanasi offered a staggering estimation, predicting that 45 crore devotees spending ₹3,000 each could generate a ₹13.5 lakh crore economic influx. With a 2.5% ripple effect, the total impact could reach ₹13.84 lakh crore. This surge in consumer spending has benefited local businesses in hospitality, retail, and transportation, further strengthening the state’s economic foundations.
Future Outlook
While the short-term economic benefits of the Mahakumbh are evident, there are concerns about the long-term utilization of the newly expanded infrastructure. Professor Krishna raised the question of whether the increased capacity in key sectors such as transportation and accommodation would continue to be fully utilized in the coming years, given the inevitable decline in visitor numbers after the event. However, the infrastructure improvements have the potential to serve as a catalyst for future economic development, attracting tourism and business activities long after the Mahakumbh.
The Mahakumbh has proven to be a game-changer for Uttar Pradesh’s economy, with significant boosts to GST collections, local businesses, and infrastructure development. As the state experiences continued growth, the long-term economic impact will depend on how effectively the state can sustain and capitalize on the infrastructure improvements and employment opportunities generated by the event. The Mahakumbh has not only strengthened Uttar Pradesh’s economy in the short term but has also laid a foundation for sustained economic growth in the future.
