This paper examines the institutional framework and financial
mechanisms for “slum” upgrading in Mumbai, including the use of Transferable
Development Rights (TDR), and assesses their strengths and limitations. Although
recent innovations through the Slum Redevelopment Authority did not produce
the hoped-for scale of slum improvements, it showed more effective possibilities for
the future. The paper discusses the historical relationship between the central, state
and local governments and slum communities, and the evolution of policies that
have affected slum dwellers from the 1950s to the present. It also describes the opportunities
that the institutional and legal framework provided for community-driven
approaches by the Society for the Promotion of Area Resource Centres (SPARC), the
National Slum Dwellers Federation (NSDF) and Mahila Milan. This includes a
discussion of how these approaches were financed and of the strategies of engagement
used by urban poor federations with the state, the private sector (especially
banks) and the World Bank. The paper also identifies the changes needed to make
pro-poor slum upgrading more effective and capable of reaching a much larger scale.