The mean streets of Mumbai have rarely looked so vibrant, so lavish, so positively otherworldly as they do in Bombay Rose, a meticulous, handcrafted animation which plays in the critics’ selection here at Venice. Gitanjali Rao’s film paints a luminous valentine to the city in all of its squalor and beauty and audaciously frames social-realist drama as a sentimental folk tale. The disparate ingredients do not always gel. But in fits and starts Bombay Rose casts quite a spell.

I’m even tempted to regard the overstuffed plot as something of a necessity, given that the film is essentially about the crisscross of lives in a densely packed community, showing how this surging human traffic is really all connected and how the actions of one party have a domino effect on others. This introduces us to Kamala (voiced by Cyli Khare), who works as a dancer at an illegal nightclub while planning to sell herself into marriage in Dubai, before informing us that wait, she’s only doing this to provide for her younger sister Tara and her disabled grandfather, who works as a watchmaker but isn’t getting much trade. From here it ranges further afield, via child labourers on the run from the cops, to meet Salim (Amit Deondi), a Kashmiri youth orphaned by the military, who earns a crust selling the flowers he steals from graves. Salim, it turns out, is the one Kamala privately wants to marry.

But this isn’t all; the picture’s barely getting started. There’s also a cat that likes to wander the streets at night, watching the ghosts who dance inside the cemetery, and Mrs D’Souza (Amardeep Jha), an eccentric old actor who longs to be visited by a ghost of her own. If Bombay Rose doesn’t quite boast a cast of thousands, this can only be because Rao’s hand finally cramped up from drawing.

Every now and then, Mrs D’Souza gives private lessons to Tara. When she’s not teaching the girl English, she’s schooling her in her colours, explaining the difference between red and crimson, purple and carmine. And this feels appropriate since Rao’s film appears captivated by colours, so drunk on its palette of turmeric oranges and primrose pinks that it eventually succumbs to a kind of Dutch courage and starts throwing in fantasy sequences involving flying horses and a talking bird. Bombay Rose works best when it keeps its feet on the ground, when it thrums to the sound of Mumbai street noise and keeps obscuring its characters with passing trucks and bicycles. The talking bird, on reflection, is a flight of fancy too far.

Then again, Mrs D’Souza was once a Bollywood star, swooningly romantic in the high old style, and perhaps Rao’s animation takes its lead from that. Bombay Rose’s high-stakes melodrama might be ripped from the real world, but it has been powdered and perfumed – crammed full of archetypes and over-egged emotions, liberally sprinkled with musical interludes. Kamala wants Salim but she’s Hindu and he’s Muslim, which means their love can never be: “That only happens in fairytales,” scoffs the annoying talking bird. Except that maybe that’s the point; maybe this is the quality that the film, despite its harsh realist trappings, has been aiming for all along. Life is a grind and the game is rigged and these citizens of Mumbai are barely getting by as it is. But that’s reckoning without a good fairy story’s knack of stepping in at the last moment to set everything wonderfully, magically straight.