But instead of living there themselves, many shanty residents saw the flats as a source of easy cash, and sold them to clerks and other workers at the lower end of the housing market.
It is a chaotic warren of factories and homes where tanners beat large strips of leather and potters work at their wheels in dimly-lit rooms, while people cook, eat, sleep and bathe on adjoining pavements.
Out of the squalor have emerged success stories, including a poor migrant who launched his own brand of peanut butter, providing further encouragement for the thousands who pour into Mumbai every day hoping to make a living, if not a fortune.
over development
"Development is fine. But we also need land for the kiln, to store clay and to make pots," said Raju Wala, whose family has been fashioning pots out of clay in Dharavi for generations.
Dharavi inhabitants, seen as encroachers who rarely pay for electricity and water, fear redevelopment will saddle them with huge bills and leave them without a roof over their heads.
"How will the new project help me? Property taxes will be high and as it is I have so many bills to pay for," said Bhimavati Maitre, who makes ends meet by washing dishes.
Mohammad Kuddus Sheikh, who runs an embroidery unit in a cramped little room where half a dozen people sit hunched over their frames surrounded by swathes of fabric, insists his business would suffer if he was forced to move.
He echoed the views of others sitting by vast sheets of dried red chillies, spread out near open drains swarming with flies.
"Settlement is a complex issue; it is not just an architectural or engineering job," said Sheela Patel, director of the Society for the Promotion of Area Resource Centers, a group that helps people with housing.
"The state must understand the need to bring in investments and fulfill people's dreams."
The government believes it is up to the challenge.
"It is a big and a complicated exercise. But we are confident we can give a total facelift to Dharavi," said Suresh Joshi, a senior official in the Maharashtra state housing department.
"It will become a model township in the country."
RSS