The Falling City

EARLIER THIS WEEK, three-time chief minister of Delhi, Arvind Kejriwal, stepped down—six months ahead of what would have been the conclusion of his second full term at the helm. An accused in the liquor scam, the former chief minister was released on bail a few days earlier by the Supreme Court. Atishi is taking over as the new chief minister, giving the Aam Aadmi Party (AAP) a new leadership in Delhi.

The party, an off-shoot of the anti-corruption movement spearheaded by Anna Hazare, first claimed power in the 2013 Assembly election by unseating the three-term Congress regime headed by Sheila Dikshit. This tenure was short-lived, lasting less than two months, as the party which fell short of a majority did not keep outside support of Congress.

However, in the next Assembly election in 2015, AAP, riding on a populist agenda, including free power and drinking water, claimed a brute majority, humbling both the national parties, Congress and the Bharatiya Janata Party (BJP). Under Kejriwal’s leadership, AAP repeated the performance to win a second consecutive term. They cemented their political hold on Delhi after scrambling a narrow win in the recently concluded elections to the Municipal Corporation of Delhi (MCD).

Delhi, which is also the nation’s capital, is jointly governed by the Union government and the state government. AAP’s tenure in Delhi coincided with that of the BJP-led National Democratic Alliance (NDA) at the Centre, resulting in constant confrontations—and very often the courts were called upon by the AAP government to weigh in on these frequent disputes.

At one time the hottest political start-up, AAP promised to etch a new path in Indian politics. It also promised to showcase its potential by rewiring Delhi. Ahead of the 2015 state Assembly elections, the party’s manifesto boldly claimed, “Since Independence, political parties have been making promises to voters, and breaking those later. AAP is different. We deliver what we promise. You can see for yourself.”

In this backdrop, ahead of Atishi taking charge as the new chief minister, Open initiated a reality check on how these claims panned out in the last five years. As the country’s capital and one of its largest cities, Delhi represents the nation’s political, economic, and cultural pulse. The city’s ability to maintain a high quality of life while addressing growing urbanisation challenges is key to its future as a world-class capital.

A Balanced but Unequal Economy

The economic well-being of the people of Delhi has undergone significant changes over the past few years, as illustrated by the distribution of income across different population quintiles.

According to PRICE’s ICE 360 data, the income distribution between 2015-16, 2020-21 (the pandemic year), and 2023-24 highlights how citizens navigated the period before, during, and after the Covid-19 crisis. The data reflects not only income disparities but also the varied impacts of economic shocks across different income groups, along with their subsequent recovery.

In the pre-pandemic period of 2015-16, Delhi’s income distribution showed moderate inequality, with the top 20 per cent (Q5) of the population controlling 42.4 per cent of the total income, while the bottom 20 per cent (Q1) held 8.3 per cent. Middle-income groups also held a reasonable share, with the second quintile (Q2) earning 12 per cent and the third quintile (Q3) receiving 15.7 per cent of the income.

The ratio of the income share between the top quintile (Q5) and the bottom quintile (Q1) was 5.1, indicating moderate inequality. The Gini ratio, the most popular measure of inequality, at 0.355 reaffirmed this finding—suggesting that income disparity was not extreme, allowing room for economic mobility for lower and middle-income groups.

However, the pandemic in 2020-21 led to a dramatic increase in inequality. With lockdowns and widespread economic restric­tions, the top quintile’s income share surged to 67 per cent, while the bottom quintile’s share collapsed to just less than 1 per cent—mirroring Covid’s devastating economic impact on low-income earners, particularly those in informal or daily wage-based jobs.

The worst-hit cohorts included construction workers, domestic workers, street vendors, and those employed in small businesses, restaurants, retail shops, and transportation services like auto-rickshaw drivers and ride-hailing app drivers. Existing mostly in the informal sector, these jobs offered little job secu­rity or financial safety nets. Migrant labourers, in particular, were among the most vulnerable, often finding themselves stranded with no work, food, or means of returning home.

Middle-income earners, too, suffered losses. Workers in small and medium enterprises, salaried employees in sectors like travel, hospitality, and non-essential retail, and self-employed individu­als saw a significant drop in income. The income share of Q2 and Q3 dropped to 5.1 per cent and 8.9 per cent, respectively. In con­trast, the wealthier sections saw their shares increase dramatically.

The proportion of Q5 (top 20 per cent) to Q1 (bottom 20 per cent) surged to an extraordinary 83.8, reflecting the massive gap between the wealthiest and the poorest in Delhi during the lockdown. Similarly, the Gini coefficient rose sharply to 0.454, signalling that the pandemic had severely exacerbated pre-existing inequalities in the city.

By 2023-24, however, there were signs of recovery and rebalancing in income distribution. The top quintile’s share of income dropped to 40.6 per cent, closer to its pre-pandemic levels, while the bottom quintile’s share rebounded to 8.3 per cent, indicating that the city’s lower-income groups managed to recover some of their lost earnings. Middle-income groups, particularly the third quintile (Q3), saw their share rise signifi­cantly to 18.8 per cent, surpassing pre-pandemic levels.

The Q5:Q1 ratio dropped sharply to 4.9, indicating a reduction in inequality compared to the pandemic period, and even slightly below the pre-pandemic ratio of 5.1. Similarly, the Gini coefficient fell to 0.339, suggesting a more equitable income distribution than in 2015-16. This recovery suggests that lower-income and middle-income groups benefited from policy measures, such as cash transfers, food security programmes, and employment schemes initiated and implemented by the Union government during and after the pandemic to mitigate the fallout.

Delhi has remained a strong economic centre, with per capita income rising from ₹3,20,000 in 2019 to ₹4,00,000 in 2023. However, income inequality has become a growing issue, with the top 20 per cent of Delhi’s population seeing substantial income growth, while the bottom 20 per cent continues to face financial instability. The Covid-19 pandemic worsened this divide, with informal and daily wage workers bearing the brunt of economic hardship.

Public Transport Lifeline

Delhi’s public transport and infrastructure tell a more complex story. While the city has developed an impressive Metro network and a variety of public transport options, the overall quality of its infrastructure is under strain from overpopulation and persistent traffic congestion.

The Delhi Metro, one of the best in India, has been a major success, offering residents a reliable, affordable, and environmental­ly friendly alternative to personal vehicles. However, other aspects of the city’s transport system, such as poor road conditions, frequent traffic jams, and air pollution, detract from this achievement.

In comparison to cities like Chennai and Mumbai, which also have strong transport systems but face less severe traffic congestion, Delhi’s infrastructure still has significant room for improvement. The congestion is partly due to the heavy influx of vehicles from neighbouring cities like Noida and Gurugram. The increase in car ownership, from 20 per cent to 25 per cent between 2019 and 2024, although much lower than other metros like Bengaluru (37 per cent) and Mumbai (38 per cent), contributed to the traffic challenges.

To address these challenges, Delhi needs to focus on expand­ing a multi-modal transport system. This system should integrate the Metro with other forms of transport, such as buses, electric rickshaws, and cycle tracks, to improve last-mile connectivity. Cities like Copenhagen and Tokyo offer good examples of how integrated transport networks can reduce congestion and improve the quality of life for residents. Delhi could benefit from implementing similar intelligent traffic management systems that use real-time data to optimise traffic flow, reducing jams in high-density areas.

In addition, exploring options like congestion pricing, which has been successfully implemented in cities like London and Singapore, could help reduce traffic in the most congested parts of the city. Investment in pedestrian-friendly spaces and bicycle-sharing programmes, as seen in cities like Amsterdam and Paris, would also help reduce reliance on private vehicles, making Delhi’s urban mobility more sustainable in the long run.

Battling Air Pollution

A critical issue that severely affects the quality of life in Delhi is its air quality. The city frequently experiences hazardous pollution levels, especially during the winter months. Compared to cities like Chandigarh, Pune and Bengaluru, which maintain moderate to high standards of air quality and environmental health, Delhi struggles with severe pollution, negatively impacting public health and overall liveability.

Delhi’s air pollution has been one of its most significant chal­lenges in recent years. Ranked among the most polluted cities globally, its air quality worsens dramatically in winter due to fac­tors such as vehicular emissions, industrial pollution, and crop residue burning from neighbouring states. Although short-term measures, like the Odd-Even traffic rule, have been introduced to reduce vehicular emissions, these efforts have not tackled the root causes of the pollution crisis.

In comparison, cities like Chandigarh and Pune have man­aged to sustain cleaner air through stricter regulations and more sustainable urban planning. Learning from such cities, Delhi has the potential to not only improve the quality of life for its residents but also enhance its global image as a more liveable, cleaner city.

The Affordable Housing Conundrum

Housing affordability remains a pressing issue in Delhi, particu­larly as rapid urbanisation has driven up real estate prices. The influx of people has created a demand for affordable housing that outstrips supply, leading to the growth of informal settlements and pushing many middle-and lower-income residents to the outskirts. Compared to cities like Noida and Gurugram, which have newer developments and more available land for housing projects, Delhi’s saturated urban core presents significant chal­lenges in developing affordable housing within the city limits.

Slum rehabilitation remains an urgent issue. Many Delhiites living in informal settlements lack access to basic services like clean water, sanitation and electricity, further deepening the socio-economic divide.

To address the housing shortage and rising real estate prices in Delhi, policymakers should incentivise the development of affordable housing through public-private partnerships. Financial incentives for developers could encourage construc­tion within the city limits, providing more affordable options for middle and lower-income residents.

Mixed-use zoning should be promoted to create integrated neighbourhoods where people can live, work and access ameni­ties, reducing the pressure on residential-only areas.

Healthcare and Education Realities

Delhi offers moderate access to healthcare, similar to cities like Ahmedabad and Faridabad. While the city has decent medical infrastructure, there are notable gaps, particularly in public health­care services. These gaps result in long waiting times and uneven access to care. In contrast, cities like Bengaluru, Chennai and Mumbai provide better healthcare services, with excellent access to both public and private hospitals. Delhi’s healthcare challenges underscore the need for improvements in public services and a more equitable distribution of healthcare resources to serve its large urban population. The pandemic exposed these vulnerabilities, as public hospitals were overwhelmed by the surge in demand.

On the education front, however, Delhi excels. It boasts high standards comparable to cities like Bengaluru and Pune, with a strong presence of top-tier public and private schools, as well as well-regarded higher education institutions. This makes Delhi a key educational hub, helping cultivate a highly competitive workforce. The city’s educational strengths give it a distinct advantage over places with more limited opportunities.

While Delhi’s education system remains a strong point, improving healthcare is essential for the city’s overall well-being.

Ease of Living

Delhi stands out for its abundant employment opportunities, inspired no doubt by its status as a national political and eco­nomic hub. The city offers a diverse range of job markets, span­ning sectors such as IT, services, trade and commerce, providing opportunities for both skilled and unskilled labour. This places it on par with other major economic centres like Bengaluru, Gu­rugram and Pune, which are also known for strong job markets.

However, Delhi’s cost of living is moderate, striking a difficult trade-off between employment opportunities and expenses. Housing, utilities, and general living costs are more affordable than in cities like Mumbai, where living expenses are significantly higher. At the same time, the cost of living in Delhi is somewhat higher compared to smaller cities like Ahmedabad and Surat.

Globally, cities like Berlin and Toronto have successfully man­aged this trade-off by offering strong job markets while keeping living costs relatively manageable. Delhi could benefit from similar strategies, ensuring that its high employment potential continues to attract talent without disproportionately raising the cost of living.

Water Security and Waste Management

Delhi’s water security and waste management systems have struggled to keep pace with its rapid urban growth. Water shortages are common, particularly during the summer months, and many residents are forced to rely on private water tankers. Additionally, the city’s waste management infrastructure is inadequate, with overflowing landfills and limited recycling capacity contributing to environmental degradation.

To build a sustainable future, Delhi must prioritise water con­servation initiatives and improve its waste management systems. While cities like Surat have implemented successful water recy­cling and waste-to-energy programmes, Delhi has come up short.

Public Safety and Gender Inclusivity

Safety in Delhi is considered moderate, with occasional concerns about crime, particularly in certain areas. Despite law enforce­ment efforts—administered by the Union government—the city’s vast size and dense population make it difficult to police evenly. In comparison, cities like Pune and Chandigarh generally perform better in terms of safety.

Public safety, especially for women, remains a concern in Delhi. While crime rates fluctuate, the large population and urban density present significant challenges for effective policing. In contrast, cities like Pune and Chandigarh are improving safety and creating gender-inclusive public spaces.

Last Word

In the final analysis it is clear that in the last five years AAP only flattered to disappoint. Despite an overwhelming legislative supe­riority it was unable to walk the talk on delivering on its promises— its first manifesto had 70 guarantees. Instead, its tenure has been rocked by scandals and it has expended much of its social capital in frequent confrontations with an equally feisty Union government.

Will it be able to turn a new chapter under a new leadership?

(With Anil Padmanabhan)

About The Author

Rajesh Shukla

Rajesh Shukla is managing director and CEO, People Research on India’s Consumer Economy (PRICE)

Anil Padmanabhan

Anil Padmanabhan is a Delhi-based journalist who writes on the intersection of politics and economics in his weekly column ‘Capital Calculus’

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