Located between Mumbai’s Western and Central Railway lines, Dharavi shantytown is home to a dense population of over one million people in India's commercial and entertainment capital (pop: 27 million). The 2.4 square km (about 600 acre) area supports approximately 12,000 micro, small, and medium enterprises (MSMEs), operating across industries such as textiles, leather, food products, and pottery.

Businesses in Dharavi manufacture goods for brands such as Zara, H&M, and Giorgio Armani. The well-known Mumbai mithaiwala Punjabi Ghasitaram traces its origins to Dharavi, while Lijjat Papad, a brand associated with women's empowerment, sources part of its supplies from the area which is considered one of the world's largest and densest slums.

Dharavi also plays a critical role in Mumbai’s informal waste-management system, recycling nearly 60 percent of the city’s waste. Its pottery colony, which has thrived for over a century, is among the largest in India. Together, these businesses generate an estimated 250,000 jobs, anchoring livelihoods for thousands of families.

Against this backdrop, the proposed redevelopment of Dharavi by the state government of Maharashtra raises serious concerns about relocation and disruption within this largely unorganized but economically vibrant ecosystem. The degree to which livelihoods are interwoven makes the government’s redevelopment strategy especially consequential.

The Redevelopment Blueprint

The Dharavi Redevelopment Project (DRP) officially aims to aims to transform Dharavi as an integrated, planned and self-sufficient township for the purpose of rehabilitation of slum dwellers.The Maharashtra state government has partnered with Adani Realty through a joint venture (JV), a real estate firm of the Adani Group, one of India's largest conglomerates with diversified corporate and business interests ranging from ports and airports to infrastructure and green energy, financing the project partly by allowing free-sale development on a portion of the land.

The DRP proposes a single-window clearance mechanism for approvals, involving multiple authorities, including the Municipal Corporation of Greater Mumbai (MCGM), the High-rise Committee, Brihanmumbai Electric Supply and Transport (BEST), Tata Power, the Mumbai Police, Civil Aviation authorities, Indian Railways, the Ministry of Environment, Forest and Climate Change (MoEF&CC), and the Maharashtra Coastal Zone Management Authority (MCZMA).

A special purpose vehicle (SPV), a dedicated legal entity created to execute large infrastructure projects, has been formed, with an initial 20 percent  government stake, which is expected to reduce to 12 percent over time. But do these plans translate into tangible benefits for everyday life on the ground in Dharavi?

Disruption Beyond Redevelopment

At present, the project offers limited clarity on how residents will continue their traditional vocations and sustain livelihoods during and after redevelopment. Many MSMEs depend on proximity to customers, suppliers, and workers. Relocation risks disrupting established supply chains and eroding long-standing business networks and relationships.

Increased rental costs in redeveloped infrastructure could further displace small businesses. Former Maharashtra Chief Minister (CM) Uddhav Thackeray has warned that relocating large populations would strain Mumbai’s already burdened infrastructure, a concern echoed by many locals and urban planners alike.

Dharavi residents have also raised concerns about being asked to vacate their homes during redevelopment. Many insist on remaining within Dharavi, citing not only economic dependence but also deep emotional and social ties. They fear losing their sense of community. Opposition has emerged in neighboring areas such as Mulund and Kurla, where local communities have opposed the relocation of Dharavi residents, raising questions about social integration and acceptance.

Tensions have additionally surfaced between residents deemed eligible and ineligible for rehabilitation housing within Dharavi, creating uncertainty and anxiety around fairness and inclusion. Analysts warn that these social fractures may be compounded by broader urban and ecological consequences.

Ecological Impact 

An estimated 255 acres of salt pan land have been allocated to the DRP. Environmentalists argue that these lands are vital to Mumbai’s coastal ecosystem, supporting mangroves, wetlands, and the livelihoods of salt harvesters. Salt pans also play a crucial role in flood regulation and temperature moderation within the city.

Construction on such land poses significant challenges, including heightened flood risk, higher development costs, and the intensification of urban heat island effects — where dense construction leads to higher localized temperatures.

Moreover, approximately 124 acres of land from the Deonar dumping ground, a long-standing biohazard site, have reportedly been earmarked for housing. This has raised concerns regarding long-term public health and safety. These ecological implications warrant careful scrutiny before irreversible damage occurs.

 Risk Of Gentrification

While the DRP promises improved housing, it also carries the risk of gentrification, a process in which redevelopment drives up land values and displaces lower-income communities. Past Slum Rehabilitation Authority (SRA) projects in Mumbai have often resulted in low-quality housing for original residents, while developers profited from premium real estate sales.

Under the current framework, Dharavi residents are classified based on proof of residence before 2011. Eligible residents receive basic housing units, while ineligible residents must purchase units at subsidized rates.

Developers are permitted a Floor Space Index (FSI)—the ratio of built-up area to land area—of 4.0, higher than Mumbai’s citywide average of 3.0. This provides significant commercial upside. Rising land values may push out micro-businesses, while redeveloped commercial zones could favor large corporate offices over small-scale local industries. The central question remains whether Dharavi’s residents will benefit meaningfully or be marginalized within their own neighborhood.

The Slippery Slope 

Previous rehabilitation efforts highlight another challenge. Many beneficiaries have historically rented or sold their allocated units and returned to informal housing elsewhere. A 2011 report on evictees relocated from Sanjay Gandhi National Park found that several families had rented out their rehabilitation units and resumed similar living conditions elsewhere.

To curb this practice, authorities introduced a 10-year lock-in period on the sale of rehabilitation flats, later reduced to five years. However, a 2018 SRA survey revealed that out of 86,429 tenements, 30,564 had been illegally transferred. Given Dharavi’s prime location, a thriving informal rental market is inevitable.

Many residents also operate businesses from their homes, an arrangement unlikely to be feasible in standardized high-rise apartments. Without robust enforcement and adaptive policy design, the redevelopment risks repeating past failures. 

For People Or Profit?

The Dharavi Redevelopment Project has the potential to serve as a model for inclusive urban planning. However, this outcome depends on whether economic growth, social equity, and environmental sustainability are treated as equal priorities. Without adequate safeguards, the project risks becoming another instance where redevelopment favors corporate interests over human needs. Whether Dharavi’s transformation preserves its social and economic heart, or erases it, will become clear only with time.

(Chakshu Saraswat, Pranit Jain, and Umesh Jaiswal are participants of the Post Graduate Diploma in Management (PGDM) Class of 2024–26 at S.P. Jain Institute of Management & Research (SPJIMR), Mumbai. Views expressed are personal)