Mumbai – from the slums to the penthouses

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If there is one area of India which replicates Indian society from the very bottom to the very top it has to be Mumbai. The city is often seen as the acceptable face of new India and generates a massive proportion of India’s GDP, industrial output, maritime trade and capital transactions. However, on the reverse side of the Mumbai coin you have the slums which are often kept hidden from the press but can house anything up to 1,000,000 people. So how do these two communities interact and how exactly did Mumbai get into this situation?

The Indian economy

There is no other economy in the world which is as polarised as that in India with the rich becoming ever richer and the poor seeing very little improvement in their standard of living. The gap between the so-called “haves and the have-nots” has been further increased during the recent economic upturn in the country, much of which was centred upon the property market.

Even though we have recently seen a significant fall in Indian property prices and the economy has slowed significantly, there is still a massive gap between lifestyles and incomes when comparing those at the top and those at the bottom of the Indian social ladder.

The Mumbai property market

Mumbai is the financial centre of India with the vast majority of business transacted in and around the area. This has attracted significant overseas businesses to the country with many choosing to settle in Mumbai next to the financial heartland of the country and the centre of the economy.

The massive change in the city of Mumbai has attracted the elite of the business world and seen property prices in the region pushed to unbelievable highs. Even though the general property market has fallen over the last few months many of these “super rich” property enclaves have remained relatively untouched, as have the assets of many of those living in the area. So while the rest of India struggles to make ends meet the elite continue life as normal.

Indian taxes

Mumbai is the hub of the country contributing 10% of all factory employment, creating 40% of all income tax collected, 60% of all customs duty and 20% of all central excise taxation not to mention contributing over 40% of India’s foreign trade. Turnover in the Mumbai economy is by far and away the largest in the country and highlights perfectly the position it has in the “food chain”.

The slums of Mumbai

Unbelievably while we have the rich and famous, the elite of the wealthy in India, taking up residence in Mumbai city just a few short miles away we have the largest slum in India which has a population estimated at over 1 million people. Dharavi is just one of many slum areas in the city of Mumbai which has attracted hundreds of thousands of people over the years and has effectively grown its own economy.

Dharavi

While officially recognised as one of the largest slums in Mumbai, Dharavi is more than just a sluim and is in fact an administrative board which takes in a number of suburbs of Mumbai. The area itself is spread over 175 hectares and sandwiched between Mahim in the West and Sion in East. Officially the population of Dharavi is put at 600,000 but in reality there are over 1 million people living in this desolate area of the city.

The economy of Dharavi

Rather bizarrely even though the people living in and around Dharavi survive on minimum income per day the slum has actually created its own internal economy which has a turnover estimated at around US$650 million a year. Rents on properties in the region can be as low as four dollars a month as opposed to the tens of thousands of dollars a month charged in the elite quarters of Mumbai city.

The slum itself first began to evolve in the 19th-century and over the years as the land has been drained for other purposes, more and more people have moved to the region and created their own internal economy. Traditional industries such as pottery and textiles are still very prevalent in the area but perhaps the largest and most significant industry in the Dharavi slum is recycling. There is also a massive financial services industry in this downtrodden area of Mumbai city which may well surprise many people.

Planned changes to Dharavi

The government of India has recently forward with a number of controversial plans to change the style and make-up of Dharavi with many older residents set to be re-housed into modern day housing. There are plans to construct 30,000,000 ft.² of housing, schools, parks and roads to accommodate the 57,000 families known to live in the region. Each resident would be given a 225 ft.² area in which to live, although this has not been well received by families in the region.

There is also confusion about the state of many businesses in the slum which are unofficial and may well disappear as and when the reorganisation of the area is pushed through by the Indian government. All in all, despite the promise of millions of dollars being ploughed into Dharavi it would appear that the vast majority of those living in these slum conditions would prefer to be masters of their own future rather than be pulled into the 21st century by the Indian authorities.

Community v property prices

Those who live in the slums of Dharavi literally have nothing to call their own and work long days to put food on the table and support their families. The property market in the region is non-existent and more emphasis is placed upon community than physical assets, which is in many ways the exact opposite of the elite areas of Mumbai city.

If Dharavi is the conscience of Mumbai city then the planned reorganisation by the Indian authorities could well be seen as the “guilt trip” after the creation of massive wealth for the region, which has not been shared out. However, such is the community spirit within Dharavi that the vast majority of residents would rather take control of their own future and remain very much as they are today. We have a definite conflict of opinion between the value of community and the value of material assets and nowhere is this more focused and visible than Mumbai city and the slum region of Dharavi.

Who is right and who is wrong?

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