Bombay needs to upgrade dramatically essential civic services: roads,
sewers, transport, health, security. But, as one planner said, "The
nicer we make the city, the more the number of people that will come to
live there." Most migrants to Bombay now come from the impoverished
North Indian states of Uttar Pradesh and Bihar. Bombay's problems cannot
be solved without solving Bihar's problems. And that means that
agriculture has to become viable again for the small farmer. Abolishing
trade-distorting subsidies in the US and the EU would go a long way
toward making, say, Indian cotton competitive with US cotton. Bombay is
at the mercy of national and international factors beyond its control.
Its fate will be decided not just locally, but – given India's
overcentralized decision-making – in New Delhi and in the course of
arcane, secretive trade negotiations in Washington and Geneva.

Indian governments could take some immediate steps. There’s no reason
Bombay should be the capital of Maharashtra state. Shifting the state
government to Navi Mumbai across the harbor, as originally intended,
would free large amounts of space in the congested office district of
Nariman Point. Beyond that, legislation should establish a strong
executive authority for the city, with real decision-making power. The
office of the mayor is currently no more than a figurehead; the city is
run at the whim of the chief minister, and the state's interests are not
necessarily those of the city. Smart and brave architects and planners
attempt to work with the state government. The city, which contributes
37 percent of all taxes paid in India, gets only a small fraction back
from the central government in the form of subsidies.

cont'd....
http://yaleglobal.yale.edu/display.article?id=9297