An Explainer: Informal Settlements

PropGuide explains informal settlements.

When families that cannot afford housing resort to encroaching upon government land and other facilities, it is known as an informal settlement. Slums, shanties near roads and on pavements, and encroachments in commercial centres are some examples of informal settlement. Despite occupying expensive real estate, these settlements are unaccounted for in the formal economy and end up hindering a country's urban growth. While developed countries like the US have shelters to house their homeless, developing countries have a large number of informal settlements. With more and more people moving to urban areas, such settlements are common in many cities of developing countries like India.

In fact, India's financial capital, Mumbai, has a number of informal settlements, including Dharavi. To be able to house its below poverty line population, the Indian government has been promoting subsidised housing since Independence. However, with a higher movement of people to the city's core in search of jobs, providing shelter to this huge population is becoming an increasingly challenging task. In recent times, the government has launched schemes like 'Housing for All by 2022', keeping in mind its programmes for the homeless. 

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