Maha Kumbh sparked ₹500 cr tax surge in UP, spurred economic growth: Report

The 45-day Maha Kumbh in Prayagraj boosted Uttar Pradesh's economy with ₹500 crore in extra GST and VAT collections, record fuel sales, and a surge in tourism-related sectors across key cities

The 45-day Maha Kumbh held in Prayagraj has proven to be more than just a massive religious gathering — it has become a significant economic event for Uttar Pradesh, India's most populous state. Attracting about 66 crore pilgrims, the mela is said to have generated substantial revenue for the state government, driven largely by a sharp increase in tax collections and fuel sales, a MoneyControl report said on Saturday.

 

Official figures, accessed by the news portal, reveal that the Maha Kumbh contributed around ₹500 crore in additional Goods and Services Tax (GST) and Value Added Tax (VAT) to the state exchequer. A senior official from the tax department is quoted as saying, "The Maha Kumbh has contributed around ₹500 crore in additional GST/VAT to the state exchequer, clearly reflecting the scale and reach of this religious and cultural phenomenon."

 

 

In the first two months of 2025 alone — January and February — tax collections from sectors directly tied to the event totalled ₹239.47 crore. Prayagraj was the highest contributor, generating ₹146.4 crore, while other religious centres like Varanasi, Ayodhya, and Noida also saw increased collections.

Sector-wise contributions

Sectorally, Indian Railways led the way with ₹124.6 crore in tax contributions. Tent houses and advertising together generated ₹9.38 crore, while the hotel industry added ₹7.12 crore. An increase in air travel across the state resulted in ₹68.37 crore in taxes.

 

In Prayagraj itself, ₹2.15 crore was collected through tax deducted at source (TDS), with another ₹9.3 crore pending clearance. Local bodies like the Public Works Department (PWD) and Nagar Nigam also played a part in boosting revenue.

 

The financial impact extended well beyond Prayagraj. Noida reported ₹12 crore in collections, primarily from hotels and online travel platforms. Varanasi added ₹8.42 crore and Ayodhya ₹2.28 crore, as per the report. The rise in digital travel bookings and the hospitality industry highlighted the growing role of religious tourism in the state's economy.

Fuel sales reflect increased mobility

Indian Oil Corporation (IOC) data for January and February 2025 shows a notable jump in fuel consumption. Petrol sales in Prayagraj surged by 81.95% in February alone — rising from 6,058 kilolitres last year to 11,022.5 kilolitres. January saw a rise from 5,253 kilolitres to 7,157 kilolitres. One kilolitre is equal to 1,000 litres.

 

Diesel consumption also grew. January sales increased from 10,204 to 12,428 kilolitres, while February sales climbed to 13,777.5 kilolitres from 11,061 kilolitres. This reflects an overall fuel volume increase of over 11,800 kilolitres across both months.

 

The economic ripple effect touched smaller businesses too. As many pilgrims travelled in private vehicles, the demand at roadside eateries, small hotels, and fuel stations surged — especially in and around Prayagraj, Varanasi, and Ayodhya, as well as along key highways. While much of this informal activity goes unrecorded in tax data, it contributed significantly to the local economy.

Return on government spending

The Uttar Pradesh government allocated around ₹7,500 crore towards the Maha Kumbh. Chief Minister Yogi Adityanath defended the expenditure, stating, “If an investment of ₹7,500 crore by the Central and state governments can generate economic activity worth ₹3 to ₹3.5 trillion, isn’t it a wise investment?”

 

An estimate by the Confederation of All India Traders supported this, suggesting that if every pilgrim spent ₹5,000 during their visit, the overall economic value of the mela would reach ₹2 trillion.