India's Privately Owned City

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What would a city look like without a government? Imagine not a lawless anarchy—there’s still a government at the federal and state levels—but the city itself has no local government. There would be no planning, no zoning, no mayor, and no public infrastructure.

You might think it’s a silly question. Who in their right mind would live there, after all? But imagine a city the size of Phoenix or Philadelphia, home to about 1.5 million people. Without government, who would make the trains run on time or even ensure that there was a train in the first place? Who would inspect buildings for safety or test the purity of water?

You don’t actually need to imagine—there is such a place. It’s called Gurgaon—India’s privately-owned city. Since there were no public roads, water pipes, energy lines, or fire stations, corporations simply built their own.

Why would anyone—much less a million and a half people—move to a place with no central sewage or water system? While Gurgaon may not have any natural resources to speak of, it does have one big advantage: proximity. It’s about a half-hour drive southwest of Delhi, India’s capital and the second-largest city on Earth.

Instead of slowly sprawling outward into suburbs, construction in Delhi was suddenly forced to relocate. In 1957, the Delhi Development Act banned private real estate developers, leaving them with no choice but to move elsewhere. Gurgaon was chosen for industrial development because the land was considered worthless—rural, undeveloped, and unimportant.

The catalyst for Gurgaon’s growth was a man named Sanjay Gandhi, who dreamed of an Indian-made automobile that would symbolize the nation’s pride. Although the government favored mass transit over personal cars, Sanjay was the son of India’s prime minister, and his wish became a command. A car factory was established in Gurgaon, but the car itself was a failure. Eventually, the factory was acquired by Suzuki, which by the early 1980s employed 20,000 workers in the small town.

India’s complex land laws require owners to apply for permits that can’t be transferred to new owners, leading to bureaucratic red tape and corruption. Fortunately for Gurgaon, nearly all of its land fell under the jurisdiction of a single office, making the permit process relatively quick and straightforward despite corruption.

Soon, companies like Nestle, Coca-Cola, Dell, and American Express flocked to the city’s cheap labor, proximity to Delhi and an international airport, and lack of bureaucracy. With them came skilled middle-class workers and expats, attracted to luxury estates, walled high-rises with pools, clubhouses, and shopping malls.

However, Gurgaon had no real government, which meant no public transit, roads, sewage, electricity, or water systems. Even today, many roads don’t have names, and power outages are frequent. Developers stepped in to provide whatever was needed, including private fire stations and the world’s first 100% privately-owned modern light metro system, the Rapid Metro.

The city’s fire safety remained inadequate for a long time, with only 14 public fire engines for a population that required at least 42. The tallest building in the city stood 300 meters high, but the fire pumps could only spray up to 40 meters. Real estate companies had no choice but to build their own fire stations, which sometimes served as public resources in emergencies.

The business hub, Cyber City, is secured by weapon-mounted Scorpio SUVs, a security force of 500 personnel, and 8,000 security cameras. Despite all the private investment, Gurgaon remained without a formal municipal body until 2008, by which time it had grown to over a million residents. Even then, the local government had limited powers.

Gurgaon is an accidental experiment in what happens when corporations fill the role of government. On one hand, its privately-owned enclaves rival the world’s great cities in cleanliness and comfort. On the other hand, outside these luxury bubbles, the reality is grim—untreated sewage, sporadic electricity, polluted air, flooding, and daily traffic jams.

In 2016, a massive flood left thousands of cars stuck on the road, resulting in school closures for two days. At one point, traffic was so bad that a judge ordered a pause in toll collection to clear the roads.

So, what is Gurgaon? Is it a harsh lesson on the limits of capitalism or a remarkable example of how the free market fills in the gaps on its own? The answer is both.