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India Edition
The Bengaluru experiment.
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Bloomberg
by Menaka Doshi

Welcome to India Edition, I’m Menaka Doshi. Join me each week for a ringside view of the billionaires, businesses and policy decisions behind India’s rise as an emerging economic powerhouse.

You can subscribe here, and share feedback with me here.

This week: Bengaluru is changing how it’s run, India’s best stock market debut this year and Modi’s birthday bash.

The Bengaluru Experiment

On my list of top Indian cities to live in, Mumbai occupies the first ten spots. Then comes Bengaluru and only because it has transformed from a bucolic retirement town into a cosmopolitan, professional culture. Delhi is too alpha, Kolkata too intense and Chennai too quiet. I write this, not to provoke you into a fight over favorite cities, but because Bengaluru has been on my mind all this month.

India’s IT capital is trying a new format of local governance which, if successful, could set a precedent not just for other megacities like Mumbai and Delhi but also upcoming ones like Ahmedabad and Jaipur.

Cities are engines of growth. US cities contributed roughly 18% of world GDP growth last year, while Chinese cities added more than 15%, according to a report by Oxford Economics. Indian cities are climbing quickly on the firm’s Global Cities Index, yet they still lag far behind: Delhi ranks 273, followed by Mumbai at 330 and Bengaluru at 331.

That’s because most Indian cities are overcrowded, under-resourced, and poorly managed — a legacy of half-baked devolution from state governments to local municipalities. State leaders, reluctant to cede control of lucrative city coffers, have resisted directly elected mayors and repeatedly delayed local elections, obfuscating accountability. Key functions such as town planning, infrastructure, and utilities often sit with state-run agencies, leaving little coordination with city authorities. The result is fragmented governance that struggles to keep pace with rapid spatial and demographic expansion. The symptoms are all too familiar — from crippling traffic jams to flash floods.

Bengaluru is attempting a fix, borrowing loosely from London’s borough-and-City Hall model.

Bengaluru’s municipal corporation has been replaced by five smaller ones.  Source: Karnataka government.

Bengaluru’s municipal corporation — the city’s local government responsible for an estimated 14.4 million people across 721 square kilometers — has this month been replaced by five smaller bodies and an overarching Greater Bengaluru Authority (GBA). The GBA is meant to integrate agencies handling planning, infrastructure, and utilities, and coordinate their work with the five new entities.

“Think of the GBA as a conductor,” V. Ravichandar, member of the Brand Bengaluru Committee and one of the architects of the new model, told me. “In the absence of the conductor we had a lot of noise. Hopefully, with the conductor, we could potentially have some music.”

It may not be melodious at the start. Karnataka state leaders remain, at least figuratively, in charge: the GBA has 75 members, including local parliamentary and state assembly representatives, and its chief commissioner is a state-appointed bureaucrat. Ravichandar concedes the body is vast but expects the buck to stop with the GBA chief commissioner. “With the new setup, there is less place to hide,” he said.

That cautious optimism is shared by Srikanth Viswanathan, CEO of Janaagraha, a Bengaluru-based non-profit that advocates for better city management. “In this system, governance is getting closer to the people,” he said.

The scale of reform is significant. According to Janaagraha, the average ward in Bengaluru has 42,645 people — more than three times the size of a ward in London. The new system is expected to expand each municipality to about 100 wards, raising the number of elected councilors from 198 to roughly 500. Ward committees will also grow from 10 nominated members to 14, half of them chosen by lottery.

Viswanathan is hopeful Bengaluru’s experiment will spread across India. This is the first time, he noted, that the country will have a semblance of metropolitan governance — one that recognizes urban growth beyond traditional city limits and places greater emphasis on planning, mass transit, housing, jobs, and regional connectivity.

Such a shift will also be critical to justify and sustain the enormous investments India has poured into its cities over the past decade — from “smart city” projects to a near four-fold expansion of metro rail.

A pedestrian wades through flood water in Bengaluru, India, on Sept. 8, 2022.  Photographer: Dhiraj Singh/Bloomberg

Bengaluru’s reforms have lifted Monisha Lobo’s spirits. A longtime resident of the tree-lined Richards Town neighborhood, she spent 11 years pressing authorities for leaf-composting pits. Now, under her residents’ association, where she leads solid waste management, 35,000 kilograms of leaves have been processed in just three months. Lobo told me she found success only after a separate climate change cell was set up by the municipal body. That makes her hopeful that decentralization, smaller municipal bodies, and more active ward committees will give her a “better chance of being heard.”

The new structure is far from flawless. It has adopted only about 20% of the restructuring and autonomy proposals set forth by Ravichandar’s committee. There is still no directly elected mayor, and it remains unclear whether all five municipal bodies will have adequate financial resources. More crucial will be how power and accountability are actually distributed between the GBA and the municipal bodies, said Naresh Narsimhan, managing partner of Venkataramanan Associate, an architecture and urban design practice headquartered in Bengaluru.

Just this year, Google and SAP inaugurated some of their largest campuses anywhere in the world in Bengaluru, which also tops Savills Growth Hub Index. Yet for nearly 15 years, the city has lacked a comprehensive masterplan. “For Bengaluru, effective governance is no longer policy — it’s survival,” Narsimhan said.

Now we can argue about which city is India’s best. Send me your strongest case at indiaedition@bloomberg.net.

Best of Bloomberg

The Fed finally does it. It lowered the benchmark interest rate and penciled in two more reductions this year.

China’s tech companies are raising billions in capital to advance their artificial intelligence capabilities.

Meanwhile, India’s Jindal Group has made a takeover bid for Germany’s Thyssenkrupp.

And billionaire Ambani’s wildlife home gets a super fast clean chit from the Supreme Court.

Don’t miss Bloomberg’s just released list of best business schools in the world.

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Listen in: From Nepal to Bangladesh, Gen Z is challenging the ruling elite in South Asia. On this Big Take Asia podcast, K. Oanh Ha and Karishma Vaswani break down what’s driving youth-led protest movements and what they mean for lasting change.

By the Numbers: Dashing Debut

62%
Urban Company soared in its Mumbai trading debut, resulting in the best opening day for any major company that went public in India this year.

Second Lead: Narendra Modi’s Birthday Party

India’s prime minister turned 75 on Wednesday and was thrown a grand party on social media, attended by heads of state including prime ministers of Italy  and Australia; business leaders such as Mukesh AmbaniKumar Mangalam BirlaSunil Bharti Mittal and Uday Kotak; chess champions and film celebrities. (Did I miss anyone? Oh yes, wait some journalists also recorded sweet videos wishing the dear leader.)  

The most important greeting came from US President Donald Trump. “Narendra,” he said in a rare first-name reference, “Thank you for your support on ending the War between Russia and Ukraine!”

Trump’s public show of renewed affection is noteworthy for two reasons.

First, it revives hope of a trade deal, especially since his comments coincided with a US delegation visiting India to resume negotiations. But don’t read too much in to it as yet, warn analysts. “This is typical carrot and stick approach” by Trump, said Amitendu Palit, senior research fellow and research lead on trade and economics at the Institute of South Asian Studies. “His officials remain critical of India but there is this understanding that let us not give up on the diplomatic route,” Palit said to Bloomberg.

Second, it bolsters Modi’s political longevity. Recent tensions with Trump had added to chatter about whether Modi might step aside at this milestone age. A reconciliation, if it holds, is expected to burnish his image as a dealmaker and strongman. Not everyone is convinced it matters. “The parlor discussions about Modi’s successor are merely that — idle talk,” Milan Vaishnav, director of the South Asia Program at the Carnegie Endowment for International Peace, told Bloomberg. “Right now, there are no clear power centers in the BJP outside of the PM. This is, in part, due to Modi’s ability to remake the party in his own image,” Vaishnav said.

 Yet, by the next general election, Modi will be 79. Perhaps he and Trump swapped notes on immortality during the birthday call — it seems to be the latest fad among strongman leaders. 

When should leaders retire? Would you like to live till 150? Send me your views at indiaedition@bloomberg.net. Thanks for reading. — Menaka.