But many who live here take fierce pride in a community that they and their families built, for some over several generations, with little help from the state. They refuse to be uprooted without a fight.
"This is like my country now," said Ramakant Rai, a grizzled electrician who has lived in Dharavi for 35 years, most of them in a shack built right up against a massive water pipe laid down during the British Raj. "I say to the government, let us stay here and we'll build our own houses."
It is a war of wills, the outcome of which could have far-reaching consequences. What happens to Dharavi could presage the fate of the rest of Mumbai's many slums, home to half of the metropolis' population of 16 million.
The slums are the first thing many visitors to this city see. Arriving air travelers gaze down on the winking metal roofs of another large shantytown that has pushed right to the edge of the tarmac.
In many ways, the battle over Dharavi is a battle over how India sees itself and the image it wants to project as a rising power.
With a competitive eye on China to the east and an envious eye on developed countries to the west, India's leaders and elites are yearning to prove that their country belongs in the same league. They want Mumbai mentioned in the same breath as Shanghai, New York and London, a world-class city that embodies the new India of stock markets, cocktail bars and Bollywood glamour.
Having what is possibly Asia's biggest slum does not fit into that ideal, especially when the slum occupies premium property in a city where commercial rents can approach $2,000 per square foot. In addition to the nearby train lines, Dharavi lies just a few miles from the airport, making it especially attractive to Indian and foreign businesspeople.
"You're talking of a location that's fantastic. This is the only location in Mumbai where I can bulldoze 500 acres of land and redesign," said architect Mukesh Mehta, whose $3-billion redevelopment plan was adopted by the Maharashtra state government in 2004 but has been subject to repeated debate and delay.
His goal is to "create a brand-new beautiful suburb," complete with green space, schools, hospitals and reliable public services such as sanitation, things Dharavi currently lacks.
All costs are to be borne by the developers, who still will profit handsomely from the high rents charged to companies and people Mehta calls "mainstream," by which he means the middle and upper classes. The slum dwellers will receive nicer housing than they have now, he insists.
