Significant differences between economic classes already existed in Bangalore, and with the introduction of globalization came another sector, a domain of highly skilled labor force. IT industry created employment at two different levels-high skilled and high value-added level and low qualified support service level (Sassen, 2000). The access to this highly skilled labor force was restricted to those with high technical knowledge. Bangalore, which is the largest city in the state, had only 76% literacy level in 2000-01, and as a result, a lot of people didn't have the opportunity to work at a high skilled level. Though these people had the chance to be a part of informal support service, but they couldn't contribute to the range of formal sector (Benjamin, 2000). The income gap between the privileged and deprived widened, which further worsened the situation of economic classes. Formal sectors witnessed a rise in wages every year, but similar was not the case with the informal sector. The NCAER (2000) survey depicts that only 2% of the total population belonged to the Upper class that earned more than 500,000 rupees yearly. 70-75 % of the population came under deprived category that earned less than 35,000 rupees annually, which was not at all sufficient to satisfy the needs of a family. With the development in the city, the cost of basics like food, fuel, housing, and transport raised, which added more risk to the livelihoods of deprived class. This underprivileged and deprived class was known as the ‘new urban poor’. During the 1990's the city also witnessed a tremendous boom in private housing and real estate business. Government's liberalization policy removed protection for tenants, and the government investment to help urban poor also reduced (Mengers, 1997). At the same time, because of the continuing high level of demand, the real estate prices increased rapidly, having a tremendous adverse effect on the deprived class. The city also couldn't cope up with the rise in demand for houses, and there was a shortage in the low-cost rental housing sector creating further problems for urban poor and people who migrated from different places into the city. These ‘urban poor’ were the actual losers of globalization who stood nowhere in this game controlled by urban elites (Dittrich, 2004).
“Globalization is an uneven process, with unequal distribution of benefits and losses, both across the countries and within a country across different income groups” (Khor 2000, p 7). Bangalore grew rapidly, both economically and in terms of population. On the one hand, the city served as a base for leading companies and house for millions of people. It developed into a globally integrated 'e-region' and with its booming software industry, attained the title of 'Silicon Valley of India'. But on the other hand, it also started to be known as a ‘Divided City' where huge glass-walled office complexes contrasted with the dense sloppy settlement and their poor services. Besides all the development, one could still see potholed roads, cows grazing amid the dirt and trash on the roadside, small decaying stalls selling food and other items, and a dense group of vehicles stuck in long traffic jams could still be seen. With globalization the city also witnessed two completely different classes, one of educated managers and engineers who have been able to take advantage of the opportunities made available through globalization, and the other…living in low-productivity jobs in the informal sector and slums. The condition of the informal sector became vulnerable as they started to lose all the capabilities and capacities to fulfill their basic needs. Thus, looking at two different sides of the city, it is clear that the internationalization of Bangalore has had both positive and negative effects, with mainly negative effects on urban poor.
Yes, globalization did bring many ills. But on balance, it also opened a number of opportunities for the city (Stern, 2001). The city has the resources to use the globalization as a force for development and poverty reduction, but now it's in the hands of the government to limit the adverse effects of globalization and harness its force to benefit human welfare.