For some people RAM is God/Avatar although except for the Sri Vaishnavas no other Hindu Sect beleives in GOD taking Human forms. Infact the Vedas do not mention RAM.
For some people RAM is a Mariyadha Purusham, the Ultimate Hero and Man and a God-King a historical figure. In this case, Govewrnment should fund more money into this research.
For some people, Ram is a myth. A literary figure of Valmikis imagination (Karunanidhi fololowed this). If this is what hurt the sentiments of people, Karunanidhi should clarify and apologise for the hurt (not his beleif).