India’s ambition to become a digitally empowered society rests on the premise that every citizen, regardless of geography, should have access to reliable and affordable internet. At the heart of this mission is BharatNet, a flagship programme launched by the government of India to provide high-speed fibre broadband connectivity to over 2.5 lakh gram panchayats (GPs) across the country. With over Rs 25,000 crore committed to the project, and a cumulative outlay through the Digital Bharat Nidhi (DBN) exceeding Rs 83,000 crore, the financial stakes are substantial.

While BharatNet’s objective to bridge the digital divide in rural and remote regions is undoubtedly laudable, evolving technological realities compel us to reassess whether continued investments in this scheme remain economically rational. In particular, the emergence of Low Earth Orbit (LEO) satellite-based wireless internet providers such as Starlink and OneWeb challenges the cost-effectiveness and long-term viability of fibre-based infrastructure in the last mile. From an economic perspective, three key arguments—the sunk cost fallacy, opportunity cost, and comparative advantage—suggest that BharatNet, though well-intentioned, may no longer be the most efficient path forward.

The Sunk Cost Fallacy: Past investment shouldn’t justify future spending
One of the most misunderstood concepts in economics is the sunk cost fallacy—the idea that just because resources have already been spent on a project, we must continue to invest in it, even if it is no longer viable. BharatNet is a textbook example.

The government has already laid over 5 lakh kilometres of optical fibre, and thousands of crores have been spent on equipment, manpower, and network rollout. But these past investments are irreversible costs. Continuing to pour funds into the scheme simply to justify earlier expenditure defies rational economic planning. Decisions on whether to expand or halt BharatNet should be based solely on future costs and benefits, not on historical spending.

In this context, the fast-evolving wireless internet landscape offers a compelling case for reallocation. Collaborating with satellite-based internet providers, which offer plug-and-play connectivity in remote terrain, bypasses the physical and bureaucratic limitations of fibre rollouts.

Opportunity Cost: What are we giving up by funding BharatNet?
The principle of opportunity cost asks a simple but powerful question: What else could we do with the money? With over Rs 25,000 crore already committed to BharatNet—and another Rs 14,000 crore spent in just the last three years (2021–2024)the opportunity cost is significant. For the same investment, India could:

•    Subsidise satellite internet receivers for underserved villages
•    Expand 4G/5G mobile towers with fixed wireless access (FWA) backhaul
•    Promote digital literacy programmes and ensure affordable device access
•    Establish community internet hubs in tribal and hilly regions

Moreover, mobile network expansion, which remains the dominant mode of internet access in rural India, has received only Rs 8,311 crore over the past five years—far less than BharatNet. This discrepancy reveals a potential misallocation of capital, where a less flexible, infrastructure-heavy model is crowding out more scalable and adaptive alternatives.

Comparative Advantage: Is BharatNet the best use of India's strengths?
The third issue is the misalignment between BharatNet’s design and India’s comparative advantage. India excels at digital innovation, mobile-first solutions, and service delivery—from Aadhaar and UPI to DigiLocker and CoWIN. However, large-scale infrastructure projects like BharatNet demand capabilities in civil works, state coordination, local governance, and equipment maintenance—areas historically riddled with inefficiencies in India.

If India’s comparative advantage lies in scalable tech platforms, not trench-digging and fibre maintenance, then insisting on fibre to every village may be working against our strengths. Instead, the government should focus on facilitating partnerships with private satellite ISPs, enabling market-led last-mile solutions, and concentrating public funds on infrastructure enablers and digital ecosystems, rather than owning and operating every network node.

Beyond Wires: Rethinking the last mile
BharatNet was visionary when conceived. But like all public infrastructure projects, it must evolve with technological change and efficiency metrics. BharatNet may still have a role to play—particularly as backbone infrastructure for urban and peri-urban areas or as support for mobile towers. However, in rural and remote last-mile regions—especially those that are forested, mountainous, or sparsely populated—wireless connectivity is clearly emerging as the superior model.

Instead of doubling down on a potentially outdated model, India must adopt a hybrid strategy: use fibre where it makes economic sense and deploys satellite or wireless technologies where terrain or costs make fibre unviable.

Dr. Krishan Sharma is Assistant Professor of Economics at Bennett University, Greater Noida. Dr. Nida Rahman is Assistant Professor of Economics at the University of Petroleum and Energy Studies (UPES), Dehradun.