India’s Transit Ambition: Vision Ahead of Execution

As it is said, a developed country is not a place where the poor have cars, but where the rich use public transport. Chasing this hallmark of progress, India’s transport has undergone a near-total metamorphosis. In the past two decades, the rapid urbanisation of the economy has demanded a modern, fast and efficient network of connectivity, evident in the increasing traffic congestion and delays, which cost the economy an estimated $22 billion each year. In this scenario, metro systems have emerged as critical, complex and valuable infrastructures for cities to perform successfully.

Illustration by The Geostrata

Following the inauguration of the country’s first rapid transit system in Kolkata in 1984, metro development accelerated with the establishment of Delhi Metro in 2002. As of today, India has approximately 1095 km of operational metro lines across 26 cities, with over 1000 km more under construction. India’s metro system, now the third largest in the world, has emerged as a bustling artery of Indian cities, delivering significant economic, social and environmental benefits.

However, this impressive expansion is not without structural and financial challenges. Despite the connectivity, most metro systems in the country operate well below their intended capacity, undermining revenue generation. With construction costs running into hundreds of crores per kilometre and fare revenues covering only a fraction of operational expenses, most metro systems remain heavily dependent on debt and government support.

To put things in perspective, in FY 2024-2025 alone, the Delhi Metro Railway Corporation (DMRC) suffered a loss of about Rs 1,598 crore. In fact, the case of DMRC isn’t an anomaly; most metro lines in the country continue to grapple economically. However, the disruptions are more pronounced in Tier 2 and Tier 3 cities, where even operational costs need to be subsidised by the government.

This article examines the structural inefficiencies in metro planning and execution in the country, exploring how inflated ridership expectations, poor last-mile connectivity, and mounting debt have contributed to the system’s financial strain.

MIRAGE OF DEMAND: INFLATED RIDERSHIP PROJECTION

Metro construction in India begins through a structured process as mandated in the Metro Policy 2017. The process begins with the formulation of a Detailed Projection Report (DPR) outlining the route, cost, technology and calculating the financial and operational viability before execution. The report hinges on projected ridership; however, when this component is inflated and flawed, the entire calculus fails.

A majority of Indian metros operate at merely 20-25% of the initial ridership projections, making all financial and operational estimates uncompetitive. Even the country's busiest and most expensive metro line operates at less than half of its initial projections. The Aqua line, India’s first fully underground metro corridor, built at a cost of roughly ₹14,000 crore, averages fewer than 20,000 daily passengers, against a projection of 4 lakh, thus reflecting  95% deficit from the projected estimates.

This problem of inflated projections is rooted in the structure of incentives. By presenting overly optimistic figures, contractors are able to finalise lucrative contracts, which enables state governments to secure greater financing from the central government. The politicians, too, to gain political mileage, continue to push infrastructure projects that appeal to public perception rather than grounded needs.

Ultimately, the cost of this cycle is borne by the general public. Infrastructure that is meant to deliver long-term benefits instead degenerates into a financial liability. This diverts public funds toward servicing inefficient or underperforming projects rather than addressing genuine developmental priorities.

THE MISSING LINK: LAST MILE CONNECTIVITY

India continues to face a classic dilemma: while roads are congested with an influx of private vehicles and the demand for public transport systems is at an all-time high, the transit services remain under-utilised. This is because while cities have invested heavily in metro infrastructure, they have failed in planning the urban ecosystems that surround them.

An individual's choice between a private car and a metro ride depends on their estimation of the time taken by them to travel from home to the metro or from the station to the destination. On average, commuters tend to avoid an air-conditioned metro ride if the first and last mile journeys stretch beyond 20 minutes. When faced with insufficient feeder services, broken pavements, or paying a premium for a short rickshaw ride, the convenience of a personal vehicle wins every time.

This isolated development of the ‘rail’ rather than the ‘reach’ has created a service gap which prioritizes infrastructure visibility above commuter usability. Due to this paradox, public investment fails to provide the expected benefits, and individuals continue to rely on private vehicles, which adds to both congestion and pollution in a city.

FINANCIAL INSTABILITY: THE SUSTAINABILITY CRISIS

Metro construction is highly capital-intensive, with costs averaging ₹250–300 crore per kilometre. The massive investment model is financed by government support, foreign loans and private partnerships. However, the sustainability of this model is increasingly under strain. Private players, initially seen as key partners, are stepping back due to high costs and uncertain returns. The case of Larsen & Toubro Limited seeking to offload over 90% of its stake in the Hyderabad Metro Rail presents one such example of the growing reluctance of private capital to remain invested in loss-making metro projects.

A significant portion of the debt is financed by international lenders, with JICA emerging as the primary contributor. This debt creates long-term repayment obligations on metro corporations. Unlike global systems that rely heavily on transit-oriented development and diversified non-fare revenue, Indian metros remain dependent on farebox collections as a primary source of income.

This dependence on farebox collections may sometimes cover operating costs, but it turns into a deficit once depreciation and debt servicing are accounted for. For instance, while the Delhi Metro Rail Corporation has at times reported an operating surplus, it continues to bear heavy net overall losses. So while metros experience low ridership and remain underutilised, the interest on debt keeps accumulating and corporations are driven into a debt loop which challenges the sustainability of such models.

AN INTEGRATED APPROACH

India’s metro expansion reflects a vision that is fundamentally sound, but the execution continues to be misaligned and dictated by political interests. Even after six years of the Ministry of Housing and Urban Affairs (MoHUA) mandating better feeder route design, the system continues to deliver suboptimal outcomes for commuters. Even as we chase global transit standards, the ecosystem needed to support India’s transit ambitions continues to be overlooked. Inflated projections, weak last-mile connectivity, and growing financial strain together point to a deeper disconnect in planning.

The vision of a Viksit Bharat will remain unrealised until all stakeholders come together to focus on integrated models of development and self-sustaining ecosystems. The metro is no longer just a mode of transport; it’s a lifeline pulsing through the heart of India’s growth story. However, unless its reach, accessibility, and sustainability are addressed together, the model will continue to fall short of meaningful transformation.

---

BY KAVYANJALI SINGH TOMAR

TEAM GEOSTRATA

info@thegeostrata.com