After Singapore gained nationhood in 1965, Lee Kuan Yew is said to have held Kolkata up as a role model for the new city-state. It is likely an apocryphal story, but telling for all of that. Even in its decline, the former first city of India could plausibly be considered worthy of emulation by a leader who would go on to become the high priest of the Asian tiger economies. Lee’s fancy, presumably, didn’t last very long once Kolkata’s rot truly set in. Over the course of a few decades, India’s economic nerve centre of two centuries’ standing would fade into near irrelevance. Is there a lesson here for its successor, Mumbai?

The Mumbai Development Plan (MDP) 2034, unveiled last week, aims at building on the city’s economic pre-eminence over the next two decades. It is a mixed bag from an urban planning perspective. But it also feeds into larger questions about Mumbai’s trajectory.

Mumbai is currently in the midst of its second economic cycle. The first cycle began in the mid-19th century with two global developments: the American Civil War that caused cotton prices to spike internationally and the construction of the Suez Canal. The first played to Mumbai’s industrial strength and the second to its being a strategically located port city. The cycle lasted for a century, ending with the collapse of the city’s textile mill heartland in the early 1980s. This triggered a shift in Mumbai’s economic paradigm. A manufacturing exodus led to a secondary sector decline. The tertiary sector stepped into the breach, particularly after liberalization.

The MDP is based on the assumption that the second cycle will continue as it has. It projects that the primary sector’s share of Mumbai’s gross domestic product will decline from 31% currently to 20% by 2034. Concurrently, the tertiary sector’s share will rise from 68% to 80%. It seems like a safe assumption on the face of it. But it falls prey to what historian and urban expert Lewis Mumford termed the fallacy of the first attitude—the assumption that past trend lines will continue indefinitely. This thinking was partly responsible for the urban detritus of the former mills that is central Mumbai today.

Mumbai’s leaders should take note as the city’s reliance on financial services grows, with manufacturing continuing to move to neighbouring districts like Thane and Pune. A healthy economic future as a financial nerve centre is certainly viable. But it is no coincidence that New York, London, Hong Kong and Shanghai—leading financial hubs, all—are also now start-up and tech hubs. The barriers between the two industries are increasingly permeable. The latter is both disrupting and enabling the former. Mumbai is poorly placed for such cross-pollination. The distorted real estate market and lack of a deep talent pool have led to it ceding ground to Bengaluru, Hyderabad and New Delhi. Early stage funding is still relatively healthy—but growth capital and achieving scale are increasingly less so. Is it possible for Mumbai to continue to grow as a financial hub over the next two decades, as it has thus far, without branching out? Perhaps. But it’s far from a safe bet—especially in light of potential rivals such as the Gujarat International Finance Tec-City, a planned smart city and international financial services centre.

The increasing reliance on the tertiary sector poses sociopolitical questions as well. Mumbai’s textile mill workers were among the best paid industrial workers in India. Marathi workers dominated this workforce; it also gave low-skilled migrants an opportunity to enter the formal labour force. It’s no coincidence that parochial politics gained ground in Mumbai with the decline of the secondary sector and the rise of a tertiary sector that required higher skilled workers. Nativist politics has an upfront economic cost, of course. But they also have a more insidious effect. In an influential 1903 essay, The Metropolis And Modern Life, German sociologist Georg Simmel wrote that the metropolis’ indifference to difference—its elevation of the individual over group identity—allowed more space for economic rationalism. The reverse, obviously, holds true as well. That is worth bearing in mind when considering Mumbai’s economic future.

It would take a brave man to predict Mumbai’s decline. It pays 60% of the country’s customs duty collections and 40% of income tax to the national exchequer—although the latter is perhaps misleading given that it hosts a large chunk of the country’s largest companies and the tax figures are not indicative of economic activity. More broadly, it had few rivals until recently; closing that gap will not be easy. But its continued dominance is not inevitable; another financial hub, New York, learnt that lesson in the 1970s. The infrastructure and housing problems the MDP addresses are important. But the solutions must be allied to a larger vision of the city’s future.

Is it possible for Mumbai to continue its dominance as a financial hub over the next two decades? Tell us at