Ayodhya’s metamorphosis: From a hub of coaching centres to a thriving city

Ayodhya, a city known for its rich cultural and religious heritage, has recently undergone a spectacular economic transformation, departing from its once-dominant identity as a hub of coaching centres.

The catalyst for this metamorphosis is the construction of the grand Ram temple, which has not only redefined the spiritual landscape but has also set in motion a wave of economic growth, turning Ayodhya into a thriving city.

Over the past four years, land prices in Ayodhya have seen a ten-fold increase.

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For example, in some areas like Parikrama marg, the price of land was 250 per sq ft. Now, it is over Rs 3,000 per sq ft. Similarly, in Mohbra Bazar, where the statue of Sita is installed, land prices have shot up from Rs 400 to Rs 8,000 per sq ft now.

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Biswajeet Banerjee

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Dr. Paresh Pandey, Associate Professor, Saket Degree College, Ayodhya, reflects on the city's recent past: "Five years ago (name was changed in 2018), Ayodhya, then known as Faizabad, was primarily recognised as a hub of coaching institutes. The region boasts a high literacy rate of 86.52 percent, prompting students to flock here for JEE or NEET preparations."

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However, the coaching institutions were operated mostly by outsiders. “The construction of the Ram mandir has opened up new opportunities, prompting the return of the youth who had migrated for better prospects. Many are now engaged in entrepreneurial ventures, such as homestays or offering rooms on a paying guest basis," he says.

The government's ambitious redevelopment plan for Ayodhya involves an investment of approximately Rs 31,000 crore over four years. In fiscal year 2017-18, the city witnessed around 6,000 land deals, and this is expected to increase to 27,000 in 2022-2023. Tourist inflow has skyrocketed from 2.25 lakh to a staggering 2.25 crore within just a year, government spokesman Shishir Singh said.

Dr. Yashbir Tyagi, former head of the department of economics at Lucknow University, emphasises the correlation between increased footfall and regional prosperity.

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Surge in land prices

"The surge in land prices was bound to happen in the region, with many farmers tempted to sell off their land, reminiscent of the changes witnessed in Varanasi after the construction of the Kashi Vishwanath corridor," he says.

Brijendra Dubey, a property dealer, provides insights into the evolving real- estate scenario. The demand for land has surged, with over a thousand individuals actively engaged in buying and selling, compared to the modest 10-20 individuals earlier. Land prices in Rampath within the city have surged from Rs 1,000 to Rs 6,000 per sq foot in just two years.

However, this rapid development is not without its challenges. The government's circle rate significantly lags behind the market rate, leading to a high number of daily registries. Efforts to increase the circle rate have faced resistance, primarily due to the government's concerns about higher compensation payouts. In fiscal year 2023-24, revenue fell short of target by 74.71 percent due to these complexities.

Circle rate or ready reckoner rate is the minimum rate that the government notifies for transactions related to sale or purchase of property.

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Bhandu Pratap Singh, a revenue officer with the Ayodhya Development Authority said that the circle rate varies from area to area. In rural areas, it is Rs 100 per sq ft, while in the city, it is Rs 477 per sq ft. But private investors are selling land at much higher prices.

Recent acquisitions by the Ram Mandir Trust, such as the 14,730 square metres near Baikunth Dham, generated a substantial revenue of more than Rs 55 crore for the government. Additionally, the Housing Development Authority purchased 1,194 acres for the development of a township.

‘Potential to generate Rs 6 lakh crore in three years’

Professor Anoop Kumar Mishra, head of the department of economics at DAV Post Graduate College, Varanasi, has conducted a study, which predicts Ayodhya's potential to generate Rs 6 lakh crore over the next three years with a daily footfall of one lakh visitors.

Mishra claims that a pilgrim will, on an average, spend Rs 3,000 per day, which include local commutation, purchasing memorabilia and even spending money on refreshments.

"The anticipated investment is expected to create a substantial surge in local employment opportunities," Mishra states, aligning with the Indian government's "Vocal for Local" initiative.

Dilip Kesarwani, a trader in Ayodhya, attests to this transformative shift, saying, "Before the construction of the temple, traders in Ayodhya had a traditional approach. But with the change in scenario, they are looking for new opportunities. Eateries are coming up in Ram Path and Dharam Path. Even Lata Mangeshkar Chowk is choc-o-bloc with quaint-looking shops selling memorabilia," he said.

Kesarwani emphasises the diversification of businesses and the emergence of new avenues, showcasing the dynamic transformation in Ayodhya's economic landscape.

Mishra echoes Kesarwani’s points, emphasizing that even with a moderate flow of investment, Ayodhya and its surrounding areas could create direct and indirect employment for an impressive 5-10 lakh individuals over the next three years.

Furthermore, the anticipated influx of foreign tourists is expected to generate additional foreign currency, positioning India as a pioneer in a distinctive cultural economy model that harmoniously blends tradition and economic prosperity.

As Ayodhya continues on this trajectory of economic growth and development, it stands as a testament to the transformative power of cultural and spiritual landmarks, turning a historic city into a vibrant economic centre.