Informed by the ‘right to the city’ literature a large body of research on urban transformation in India and other developing countries had shown how Global city aspirations of the urban elites have increasingly come about through commoditisation of urban space and inter alia dispossession of the poor. Taking-off from the above conceptualisation as the point of departure, this paper provides an alternative perspective of political consolidation of the urban informal sector and its implications. Looking through the lens of political mobilization of the street vendors in Kolkata, India, this paper shows that how the labour unions has enabled informal vendors to not only resist the designs of the hegemonic state successfully but to become a part of the city’s governance framework. The paper argues that class binaries provide only a partial picture about what it is an evolving and layered relationship in which at the neighbourhood scale, often there is high degree co-existence and interdependence between formal and informal economies and the people associated with it. Power relations and engagement patterns between the street vendors and the state authorities had changed over years, impacting quality of life within the core city and its long term sustainability. A new, fragmented spatial structure has started emerging, with the middle classes and the globalizing segments of the economy, moving away to gated enclaves at the urban fringe. These changes are not isolated phenomenon, but rather symptomatic with the larger process of urban transformation and entwined with the political-economic change in the state level.