A historical assessment of the Political economy of India, through imperialism and the brief period of colonialism, puts the Indian state and its development apparatus into perspective. Spatial formations that emerge out of an economic doctrine are better understood when thought of as abstractions rather than physical spaces. Yet, the state engages in a rhetoric of development that centres on administrative categories, often without attention to the logic of their formations. The state further creates a space from which it removes itself and leaves the ideological production to its other. This paper takes a historical overview of the political economy through a case study of the development of Bombay/Mumbai city from the 17th century till the period of liberalisation of the Indian economy in 1991.