A giant billboard on a sagging shop front reads: “I landed a great job with my degree.” Beneath it, two young boys sleep on the street, their arms across each other.  

It’s not yet light but the drive from Kolkata International airport, 15km northeast of the centre, immediately presents a city that is struggling to keep pace with its ambition. Blocks of luxury apartments are under construction, yet in the moonlight the scaffolding that supports them is revealed as bamboo, and black crows, which compete for food with the city’s poor, sit on the power lines waiting for dawn.

If you are coming to the West Bengali city on business, you will find a good choice of high-end hotel brands that promise a secure, peaceful retreat from the dirt and noise. But this hasn’t always been the case – 25 years ago there was only the government-owned Great Eastern, dating back to the 1840s, the Oberoi Grand, which has been in operation for more than 125 years, and the Park hotel, which launched in 1967. The Taj Bengal didn’t enter the scene until more than two decades later, in 1989, followed by the Hyatt Regency in 2002, the ITC Sonar a year after, and the Swissotel, which was unveiled last year.

That the hospitality industry is picking up is a sure sign that the economic drivers of international tourism and trade are taking hold, and as of May, with a new political party in power after 34 years of communist control, the future of Kolkata has never looked brighter. George Kuruvilla, general manager of the Oberoi, says: “People voted for change and are looking forward to seeing it become a reality. There are tremendous opportunities for infrastructure to improve but the original historical charm of the city still exists and careful work is being done to preserve it.”

Heading up the recently inaugurated All India Trinamool Congress (AITC) is chief minister Mamata Banerjee, who has been campaigning to reform healthcare and education, and battling against industrialisation at the cost of rural land (80 per cent of the population still rely on agriculture) for many years. Her landslide victory in the spring, which ousted the world’s longest-serving democratically elected communist party, is already proving a catalyst for rebirth.

Sanjay Wadhwani, deputy high commissioner for the UKTI (UK Trade and Investment) in eastern India, says: “West Bengal is, per capita, one of the eight poorest states in India, and if you take Kolkata out of the equation it sinks even lower. With its rich history as a major trading port and erstwhile second city of empire, Kolkata has suffered since before independence in 1947, and particularly in the past four decades.”

But a new Bengal Renaissance is on the horizon. Sitting in the back of one of the city’s cadmium yellow Ambassador taxis – the morning sunshine bringing colour to the now jostling streets – the roads in Kolkata’s 2 sq km heritage zone are surprisingly uncongested. There aren’t any auto-rickshaws or handcarts, and there is a ban on beeping your horn (although not everyone abides by it).

What’s more, since July, the Calcutta Municipal Corporation has taken down all the advertising hoardings across the area, which stretches between Eden Gardens in the west, Tipu Sultan mosque in the east, Writers Building – where the government resides – in the north, and Maidan metro in the south.

This is just one step that is being taken as part of the government’s “beautification” programme, but Kolkata is not the first to make efforts to clean up visual pollution – Sao Paulo removed hoardings as part of its Clean City Act in 2007, and more than a dozen US cities, including San Francisco and Dallas, have banned digital billboards.

In a guardian.co.uk interview, documentary maker Morgan Spurlock – whose upcoming film Pom Wonderful Presents the Greatest Movie Ever Sold investigates branding, advertising and product placement – described how Sao Paulo benefited. “The distraction people had from interacting with their landscape was removed. Businesses flourished, the economy flourished and crime decreased,” he said.

It’s too early to tell if Kolkata will respond in a similar way, but Sumit Bhattacharyya, a Ministry of Tourism-approved tour manager and escort, says regeneration extends far beyond taking down posters. “You can already see lampposts being replaced by the old-style gas lamps, although they will be electric, and we have new trams,” he says. “There are more than 190 examples of British Raj architecture that are catalogued as historical buildings throughout the city, and eventually these will all be restored.”

When the British East India Company arrived in 1690, they chose Kolkata (then Calcutta) in the east as their seat of power because of the state’s wealth of natural resources such as indigo, tea, cotton, opium and saltpeter (gunpowder), which were then exported at great profit. The city’s position on the banks of the Hooghly River made it an ideal trading point, and less than a century later it became the capital of British India.

The colonialists remained until 1911, at which point they appointed Delhi in the north the new capital. So how do local people feel about a return to the glory of the Raj? Bhattacharyya says: “It is a long time since we had any bad feelings towards the British. Now [the era] is romanticised.”

One of the best-preserved buildings is the Victoria Memorial Hall (pictured above), an immaculate Indo-Saracenic edifice carved from the same pearly white marble as the Taj Mahal. It was built in the early 1900s to mark Queen Victoria becoming “Empress of India” – even though she never visited the country – and a plaque inside, inscribed with the words she spoke on January 1, 1887, when she received the title, takes on a new resonance today.

“We trust that the present occasion may tend to unite in bonds of yet greater affection ourselves and our subjects; that from the highest to the humblest all may feel that under our rule the great principles of liberty, equity and justice are secured to them; and to promote their happiness, to add to their property, and advance their welfare are the ever-present aims and objects of our empire.”

The speech sounds almost like something the Trinamool Congress’s Mamata Banerjee would give, particularly in light of her announcement in the summer to redevelop Kolkata in the image of London. A pilot project costing Rs 360 million (£5 million) will initially see the cleaning up of a 1km section of the riverbank between Fairlie Place and Babughat (followed by another 9km stretch later), as well as a 15- to 20-metre-wide landscaped pathway laid along it by next February.

Further stages will include the addition of a waterside shrine, an open-air theatre, restaurants, shops, bars, art galleries, museums, parks and even a “Kolkata Eye” Ferris wheel, transforming it into a more exotic version of London’s South Bank – albeit one where locals still flock to bathe in the river and wash their clothes. The new Kolkata School of Economics, which is part of the city’s Cambridge School (affiliated with the UK university), will offer degrees from the University of London, and Curzon Park – more of a rat-infested jungle at present – will become the new Hyde Park.

Other aspects of the facelift, which is set to cost Rs 4.4 billion (£60 million) in total, will include the demolition of dilapidated warehouses to make way for meditation areas, a tree zone, a community centre, revamped sheds for the ferry boats that cross this tributary of the Ganges, a literary square in Babughat and a congress centre by BBD Bagh station. Banerjee is also keen to open a Veta English language training institute and create an integrated transport system.

The implementation of these plans will, to some extent, improve the quality of living for those on the ground and, in time, help to attract tourists. But how will it affect the position of Kolkata on the global business platform? UKTI’s Wadhwani says: “It’s a massive mandate for change and is about benchmarking Kolkata against London. It’s an aspirational thing – two big cities with long historical links, both on big rivers, and once thriving ports with a common heritage. It’s about how you can turn a city that has all this history into a modern functioning hub.”

He adds: “The finances are not in a good state but the new government has said it is interested in public-private partnerships, and welcoming new models of setting up manufacturing and transport infrastructure. After more than three decades of what was effectively one-party rule and quite a lot of stagnation, there is quite a big turnaround operation to be done.

“I would say the mood in the business community, as well as the general public, has really taken an upturn since the elections. There has been some despondency in the past few years at too little investment coming in, but now there is a lot of hope and energy.”

Much of this optimism is placed in Kolkata’s burgeoning “generation next”, educated middle class individuals who are proving desirable candidates for employers. Wadhwani says: “One of the key assets of the state is its youngsters, who are highly employable to work not just in call centres but BPOs [business processing offices] and IT. Over the past few years far too many have left for jobs in Bengaluru, Mumbai and Hyderabad, but a number of firms have set up here in more recent times.”

HSBC has a large BPO operation here, with almost 4,000 people, and Pricewaterhouse Coopers, IBM, Wipro, Pepsico, Cognizant and Tata Consultancy Services all have a significant – and growing – presence. “Siemens has both software and hardware divisions here and is capitalising on the fact that Kolkata is cheaper than the likes of Bengalaru and Delhi, both in terms of physical infrastructure and salaries,” Wadhwani says. As a result, poverty has come down from a percentage in the high 30s to 27-28 per cent, although it is reported that 80 per cent of Kolkata’s 16 million inhabitants still earn less than £1.20 a day.

Since the economic reforms of the 1990s, the eastern side of the country has seen less growth than southern and western India. This is because West Bengal has traditionally been seen as an agricultural state, trading in “cash crops” such as rice, wheat, tobacco, sugar cane and tea from Darjeeling in the Himalayas. But it is also rich in coal – Coal India, which has its HQ in the city, is the largest coal mining corporation on the planet – along with oil, natural gas, minerals and steel production, which has resulted in heavy engineering, shipbuilding, and railway and car manufacturing. With this in mind, the city has become an important access point to the surrounding regions.

What’s more, many multinational banks are based here, including BNP Paribas, Standard Chartered and Citibank, and the service sector, which includes IT, accountancy and office services, is booming. So what advice would UKTI give those looking to broker deals or invest here? “Research, due diligence and patience are necessary but it’s a highly rewarding market,” Wadhwani says. “A good local partner is helpful, as is a good sense of humour.”

With the sun setting and the streets thronging with vibrant sari-clad women and shouting hawkers, the heat of the day subsides and the evening begins. Back out at the airport, work continues on a new 40,000 sqm integrated domestic and international terminal, located next to the existing facilities that are now looking shabby and sad.

“In the early 1990s, the airport was the best in India, but again it is a sign of how the previous government took its eye off the ball,” Wadhwani says. But Banerjee has been spurring on the upgrade – which will see capacity rise from five million to 20 million – and with continued hard graft, it will be complete next year. It seems Kolkata could once again be known as the City of Joy.

For more features on India, see businesstraveller.com/tags/mumbai, /delhi and /bengaluru