India’s financial capital, Mumbai, is set for a major transformation with the inauguration of the Atal Setu, the country’s longest bridge spanning 22 kilometres, connecting central Mumbai to a burgeoning commercial hub across the Arabian Sea.
Prime Minister Narendra Modi is slated to officiate the opening, marking a milestone in his government’s ambitious $1 trillion, five-year infrastructure drive, a key element of his bid for a third term in the upcoming general election.
The Atal Setu, a $2.2 billion project under construction since 2016, is expected to significantly reduce travel time between central Mumbai and the rapidly expanding areas of Navi Mumbai, home to major ports, hospitals, universities, and global retail chains. Sanjay Mukherjee, head of the Mumbai Metropolitan Region Development Authority, anticipates the commute to shrink from two hours to just 20 minutes.
The bridge is part of a broader infrastructure push in Mumbai, including a new airport, a light rail line, and additional projects estimated to be worth $10 billion over the next 18 months, with an additional $60 billion planned for the following three to seven years. This surge in infrastructure development is not limited to Mumbai, as India is projected to witness combined public and private sector investments of $1.16 trillion in infrastructure from 2024 to 2030, nearly doubling the total from the previous seven years.
While India has historically focused on industrial infrastructure, the current approach, under Modi’s leadership, is oriented toward projects that benefit the wider public. Initiatives include a $1 trillion bullet train and investments in utilities such as electricity, water, and gas. According to Vinayak Chatterjee, infrastructure analyst and founder of the Infravision Foundation, this reflects a shift toward a business-to-consumer approach where infrastructure directly impacts households.
Despite India’s substantial progress, it faces challenges such as the reluctance of the private sector, including financial institutions, to invest in large projects. This hesitancy stems from concerns arising from previous infrastructure investments post-global financial crises, which faced implementation delays and resulted in soured investments. While the Modi government allocates 22% of the federal budget to infrastructure expenditures this year, up from 17% last year, the need for wider financial support is underscored.
The country’s debt-to-GDP ratio, above 80%, has raised concerns among credit rating agencies. The CRISIL report emphasizes the necessity of broader financial backing for sustained infrastructure development. As India strives to bridge the gap with other modernizing economies, the success of its ambitious infrastructure projects relies not only on public expenditure but also on securing private sector investment and navigating potential risks associated with high debt levels.