A surge of visitors on account of Mahakhumbh contributed to Uttar Pradesh recording over ₹1,000 crore increase in GST collections in January and February over the corresponding period last year. During the period, UP witnessed double digit growth in GST collections, which surpassed the national average of 9 per cent in February.

Uttar Pradesh witnessed a GST growth rate of 11 and 14 per cent growth in January and February, respectively, the period during which the Mahakumbh was ongoing. This brings the State almost at par with the top performing States such as Maharashtra, Gujarat, Tamil Nadu, Haryana and Karnataka, which have experienced growth rates ranging between 7 per cent and 20 per cent. UP has also performed much better in comparison with its own growth rate in the previous years. For instance, in January-February 2024, the GST growth rate was 10.8 and 8.4 per cent for the State, respectively.

Boost to biz

The boost to the state economy will have a national impact as well. Last week, Chief Economic Advisor V Anantha Nageswaran said that a likely contributor to economic growth this year can be the “huge spending” associated with the Mahakumbh.

Sectors like travel, hospitality and local businesses boomed with an estimated over 60 crore visitors participating in the religious gathering. This surge in consumer spending is expected to meaningfully contribute to GDP growth from the expenditure side, the CEA said.

According to Prof Manmohan Krishna, Chair Professor of NITI Aayog Chair in the University of Allahabad, said visitors to the three holy cities – Prayagraj, Varanasi and Ayodhya – used digital payment mode which helped collections.

“Prices of various goods and services such as room tariffs, food etc. were high and resulted in good GST collection. Digital payments contributed to the collections,” Krishna said. The collection would have been even higher had cash transactions not been simultaneously high.

Prof M K Agrawal, Professor of Economic at Lucknow University, said: “Mahakumbh has been hugely rewarding for the state economy. With very little public investment, the business turnover in Uttar Pradesh is expected to be in the range of ₹3-4 lakh crores.”

The event has simultaneously stirred up local economy and businesses including transporters, food chains, groceries, tents, etc. “Many amateurs would now feel tempted to join self-employment ventures instead of migrating elsewhere and seeking jobs,” he said.

Prof Anup Kumar Mishra , Head of Economics Department at DAV PG College, BHU, Varanasi, said a projected 45 crore devotees spending ₹3,000 each generates a ₹13.5 lakh crore influx.

“Accounting for a 2.5 per cent ripple effect, the total impact reaches ₹13.84 lakh crore,” he said, adding that this surge stimulates hospitality, transportation and retail benefiting local businesses.

Long-term gain

Infrastructure upgrades ensure long-term economic gains. While estimations vary, a substantial financial impact, as highlighted by government projections of a ₹3 lakh crore boost, is undeniable. “It created 30-40 lakh ad-hoc employment. At least 25 per cent will translate into permanent employment,” he said.

However, Krishna wondered how much of the expanded capacity would be used in the coming years because the number of visitors would dwindle.