Water, electricity, latrines, and sewage disposal were all part of the Slum Improvement Programme (SIP) of 1972, which was designed to provide basic facilities to slums. Despite this, due to a lack of a full census of Mumbai’s slums, it was unable to carry out these plans. In 1976, the government attempted to grant “legitimate status” to slum inhabitants. Residents were required to provide picture identification and pay a nominal fee, a portion of which was paid to the government as land rent. This programme permitted residents to renovate some old houses and build lofts on top of existing structures. Electricity and water were also made available. However, due to administrative issues caused by a lack of reliable records on the number of occupants and houses, the scheme was cancelled in 1991.

The World Bank supported the Slum Upgradation Programme (SUP) in 1985. Under this scheme, existing slum land was leased out to cooperative groups of slum dwellers at affordable rates, and loans were made available for environmental and housing improvements. However, because asset distribution to households was unequal, battles over land value persisted, producing unhappiness among particular slum groups who did not profit from the scheme. This programme also failed to overcome a fundamental slum redevelopment roadblock: a large percentage of the slum was located on privately owned land that had been encroached upon, making it difficult to obtain land for slum redevelopment.

In the same year, the Prime Minister Grant Project was launched, with Rs. 30 crores set out for Dharavi reconstruction. Housing societies were granted the option to choose their own architects under this system, while the government engaged construction contractors. The slum’s roads were supposed to be enlarged to make them more accessible to cars. However, the designers failed to account for the slum’s large population density, making it difficult to evacuate residents to allow for development work. In 1995, the Maharashtra Housing and Area Development Authority (MHADA) formed the Slum Rehabilitation Authority (SRA) to address the issue of slums in the state through a Slum Rehabilitation Scheme (SRS). Many of the faults in prior systems looked to have been ironed out in this scheme. The SRS provided rewards to every slum dweller who voted in the 1995 election. To lure private developers, the strategy established the notion of Transferable Development Rights (TDR), which would allow developers to transfer a portion of the extra SRS rights to other regions of the city.

The strategy, however, did not work out as planned. Only 3,486 of the estimated 100,000 apartments had been rehabilitated by 2000, despite the fact that it required the permission of three-quarters of the population. Several tenants who were given these rebuilt units just rented them out for extra money while continuing to live in their improvised hovels. The strategy was also criticised for favouring private developers over redevelopment because it allowed for the transfer of freed-up property to private developers despite Dharavi’s already dense population.

In 2004, the government proposed the Dharavi Redevelopment Project, in which developers would rehouse Dharavi people in 300-square-foot apartments with built-in high-rise tower blocks, freeing up land for their own development projects. While the tower buildings alleviate the slum’s existing hygiene and sanitation issues, they have been met with intense criticism from its residents. Residents feel that a tower will disrupt the community spirit that has allowed Dharavi’s micro enterprises to survive for so long, as well as drastically increase the area’s already dangerously high population density.

The most recent urban rehabilitation plan suggested for the Dharavi neighbourhood is led by Mukesh Mehta, an American-trained architect. To accommodate the area’s 57,000 households, the plan asks for the building of 2,800,000 square metres (30,000,000 square feet) of houses, schools, parks, and roads, as well as 3,700,000 square metres (40,000,000 square feet) of residential and commercial space. Existing inhabitants believe the reduced permanent alternate accommodation of 33 square metres (350 square feet) per tenant is insufficient, and there is still substantial local opposition to the plans. In addition, only families who lived in the region before the year 2000 would be relocated. Residents have also expressed concerns that some of their “informal” companies will not be relocated as part of the redevelopment plan. In response to this criticism, the Dharavi Community Land Trust has been established, which will be made up of residents, landowners, and neighbourhood associations.