Associated Press
A view of Dharavi, Asia's largest slum in Mumbai, India.
Nobody is saying Dharavi is a paradise. But we need to understand the dynamics, so that when there is an intervention by the government, it doesn't destroy what is there.

MUMBAI, India — At the edge of India's greatest slum, Shaikh Mobin's decrepit shanty is cleaved like a wedding cake, four layers high and sliced down the middle. The missing half has been demolished. What remains appears ready for demolition, too, with temporary walls and a rickety corrugated roof.

Yet inside, carpenters are assembling furniture on the ground floor. One floor up, men are busily cutting and stitching blue jeans. Upstairs from them, workers are crouched over sewing machines, making blouses. And at the top, still more workers are fashioning men's suits and wedding apparel. One crumbling shanty. Four businesses.

In the labyrinthine slum known as Dharavi are 60,000 structures, many of them shanties, and as many as 1 million people living and working on a triangle of land barely two-thirds the size of Central Park in Manhattan. Dharavi is one of the world's most infamous slums, a cliche of Indian misery. It is also a churning hive of workshops with an annual economic output estimated to be $600 million to more than $1 billion.

"This is a parallel economy," said Mobin, whose family is involved in several businesses in Dharavi. "In most developed countries, there is only one economy. But in India, there are two."

India is a rising economic power, even as huge portions of its economy operate in the shadows. Its "formal" economy consists of businesses that pay taxes, adhere to labor regulations and burnish the country's global image. India's "informal" economy is everything else: the hundreds of millions of shopkeepers, farmers, construction workers, taxi drivers, street vendors, rag pickers, tailors, repairmen, middlemen, black marketeers and more.

This divide exists in other developing countries, but it is a chasm in India: Experts estimate that the informal sector is responsible for the overwhelming majority of India's annual economic growth and as much as 90 percent of all employment. The informal economy exists largely outside government oversight and, in the case of slums like Dharavi, without government help or encouragement.

For years, India's government has tried with mixed success to increase industrial output by developing special economic zones to lure major manufacturers. Dharavi, by contrast, could be called a self-created special economic zone for the poor. It is a visual eyesore, a symbol of raw inequality that epitomizes the failure of policy makers to accommodate the millions of rural migrants searching for opportunity in Indian cities. It also underscores the determination of those migrants to come anyway.

"Economic opportunity in India still lies, to a large extent, in urban areas," said Eswar Prasad, a leading economist. "The problem is that government hasn't provided easy channels to be employed in the formal sector. So the informal sector is where the activity lies."

Dharavi is Dickens and Horatio Alger and Upton Sinclair. It is ingrained in the Indian imagination, depicted in books or Bollywood movies, as well as in the Oscar-winning hit "Slumdog Millionaire." Dharavi has been examined in a Harvard Business School case study and dissected by urban planners from Europe to Japan. Yet merely trying to define Dharavi is contested.

"Maybe to anyone who has not seen Dharavi, Dharavi is a slum, a huge slum," said Gautam Chatterjee, the principal secretary overseeing the Housing Ministry in Maharashtra state. "But I have also looked at Dharavi as a city within a city, an informal city."

It is an informal city as layered as Mobin's sheared building — and as fragile. Plans to raze and redevelop Dharavi into a "normal" neighborhood have stirred a debate about what would be gained but also about what might be lost by trying to control and regulate Dharavi. Every layer of Dharavi, when exposed, reveals something far more complicated, and organic, than the concept of a slum as merely a warehouse for the poor.

Said Hariram Tanwar, 64, a local businessman, "Dharavi is a mini-India."

The order was for 2,700 briefcases, custom-made gifts for a large bank to distribute during the Hindu holiday of Diwali. The bank contacted a supplier, which contacted a leather-goods store, which sent the order to a manufacturer. Had the order been placed in China, it probably would have landed in one of the huge coastal factories that employ thousands of rural migrants and have made China a manufacturing powerhouse.

In India, the order landed in the Dharavi workshop of Mohammed Asif. Asif's work force consists of 22 men, who sit cross-legged beside mounds of soft, black leather, an informal assembly line, except that the factory floor is a cramped room doubling as a dormitory: the workers sleep above, in a loft. The briefcases were due in two weeks.

"They work hard," Asif said. "They work from 8 in the morning until 11 at night because the more they do, the more they will earn to send back to their families. They come here to earn."

Leatherwork is now a major industry in Dharavi, but only one. Small garment factories have proliferated throughout the slum, making children's clothes or women's dresses for the Indian market or export abroad. According to a 2007 study sponsored by the U.S. Agency for International Development, Dharavi has at least 500 large garment workshops (defined as having 50 or more sewing machines) and about 3,000 smaller ones. Then there are the 5,000 leather shops. Then there are the food processors that make snacks for the rest of India.

And then still more: printmakers, embroiderers and, most of all, the vast recycling operations that sort, clean and reprocess much of India's discarded plastic.

"We are cleaning the dirt of the country," said Fareed Siddiqui, the general secretary of the Dharavi Businessmen's Welfare Association.

Today, more than half of metropolitan Mumbai's nearly 22 million residents live in slums. Many people live in slums because they cannot afford to live anywhere else, and government efforts to build affordable housing have been woefully inadequate. But many newer slums are also microversions of Dharavi's informal economy. Some newer migrants even come to Dharavi to learn new skills, as if Dharavi were a slum franchising operation.

"Dharavi is becoming their steppingstone," said Vineet Joklekar, a civic leader here. "They learn jobs, and then they go to some other slum and set up there."

Dharavi still exists on the margins. Few businesses pay taxes. Few residents have formal title to their land. Political parties court the slum for votes and have slowly delivered things taken for granted elsewhere: some toilets, water spigots.

"They are talking about redeveloping Dharavi," said Mohammad Khurshid Sheikh, who owns a leather shop. "But if they do, the whole chain may break down. These businesses can work because Dharavi attracts labor. People can work here and sleep in the workshop. If there is redevelopment, they will not get that room so cheap. They will not come back here."

Matias Echanove, an architect and urban planner, has long argued that Dharavi should not be dismissed as merely a slum, since it operates as a contained residential and commercial city. He said razing Dharavi, or even completely redeveloping it, would only push residents into other slums.

"They are going to create actual, real slums," he said. "Nobody is saying Dharavi is a paradise. But we need to understand the dynamics, so that when there is an intervention by the government, it doesn't destroy what is there."

Dharavi's fingerprints continue to be found across Mumbai's economy and beyond, even if few people realize it. Asif, the leather shop owner, made leather folders used to deliver dinner checks at the city's most famous hotel, the Taj Mahal Palace. The tasty snacks found in Mumbai's finest confectionaries? Made in Dharavi.

"There are hundreds of Dharavis flourishing in the city," said Mobin, the businessman. "Every slum has its businesses. Every kind of business is there in the slums."