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Then is it really worth living and working there?
It is bad rn but steps are being taken to cure it for the first time ever so lets hope
For example, I have not seen big/upcoming law firms having their offices in West Delhi, East Delhi or North Delhi. Most are concentrated either in Central Delhi or South Delhi.
In case of Mumbai, you will see law firms in South Bombay and few in BKC. Apart from ICUL, not sure if any famous/prominent firm has office which are north of BKC.
All this is because law firms are heavy brand dependent and that gets diluted if you are not is fancy locality. No one cares how the team commutes and issues faced by them.
To answer the main thread, I think the overpopulation is definitely causing major issues and gravity of such issues are increasing with time. Delhi still has good public transport due to Metro (but last mile connectivity is not that great). Mumbai has been in construction forever (like Delhi has about 25 years back around Commonwealth games). Overall city infrastructure, does not justify rent of residential properties. Add to that pollution (which now is also increasing in Tier 2, 3, 4 cities) is just killing people.
Government does not appear to have done enough. In case of Delhi, centre and state blame each other or neighboring states, but cities like Mumbai (which has a rich municipality, state coffers, complete power) are also not looking to improve the quality of air and quality of life.