A 10x10 shanty can make you a Mumbai millionaire

“Kishor Patel, a resident of one of the thousands of slums near the airport, has cracked one of the most distorted real estate deals in Mumbai’s history, having sold his 10ft x10ft shanty to a developer for Rs 56 lakh - which works out to an incredible Rs 56,000 per square foot,” reports the Mumbai Mirror.

It’s just 100 square feet that we’re talking about, and one Kishor Patel. What would all the slums in Mumbai, and all the Kishore Patels be worth?

“And Mid-Day’s decided to find out just how strong the reek is. After considerable research, the estimated real estate value of Mumbai’s slums works out to be over Rs 1 lakh crore. That is 1 followed by 12 zeros,” said Mid-Day.

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“Mind it, this is only the estimated value of the present land acquired by the slums. If the floor-space index (FSI) of 2.5, allotted to the slums, is taken into account, the cost would multiply that many times. And except for a few, most can avail (themselves) of this FSI, says the same article.

[caption id=“attachment_99897” align=“alignleft” width=“380” caption=“The minimum value of those squatting on government land, in the measured area of Mumbai alone, is in excess of Rs 1,00,000 crore. Danish Siddiqui/Reuters”]  [/caption]

The figures were calculated on the basis of the approximate number of shanties in a slum, supposing each shanty is 10x10 sq ft, and multiplying it with the current property rate of slums in the market.

“Pankaj Kapoor, MD, Liases Foras, a real estate rating firm, said, “The prices of slums in the island city would vary between Rs 25-30 lakh, because of the high redevelopment returns. The rates of slums in central and western suburbs may vary between Rs 8-10 lakh. It could be up to Rs 12 lakh for Dharavi. Also, around Rs 16 lakh for the Golibar slum sounds legitimate”,” the Mid-Day report continued.

The Mid-Day report shared details about the distribution of the major slum clusters in Mumbai, not all.

2,33,000: Slum tenements in Dharavi

1,00,000: Mankhurd, Shivaji Nagar, Cheetah Camp

1,00,000: Airport fringes, Jhari Mari, Sakinaka

70,000: Shanties in Mulund, Bhandup, Powai

60,000: Shanties in Malwani

50,000: Slums in Nehru Nagar, Vinobha Bhave Nagar

That’s a reasonable amount of homework to say that the minimum value of those squatting on government land, in the measured area of Mumbai alone, is in excess of Rs 1,00,000 crore. Now add the rest of the slums in Mumbai, the slums in the major metros of the city, and we could easily arrive at a figure of over Rs 5,00,000 crore - assuming that Mumbai has only one in five slums of the country.

An illegal, money-generating of this size - and no one gets punished for it. That’s because, unlike ‘scams’, where the major beneficiaries could be just a handful of people, the slum industry has - literally - millions of direct beneficiaries. Each person who lives in a shanty in a slum is a direct beneficiary; politicians who ‘protect’ the slums see them as vote-banks. For politicians, policeman, slumlords and bureaucrats, of course, there’s money to be made as well, especially (but not only) when the land is ‘regularised’ and can be sold to a builder/ real estate company.

“Ministers elected from the city demanded that the government issue orders staying all demolition planned for slums that have come up before the 2000 cut-off line. Under the existing government policy, only slums up to 1 January 1995, have legal status and are “protected.”

The ruling Democratic Front alliance had included regularisation of all slums up to 2000 as an agenda in its manifesto before coming to power. Sources said Naseem Khan, guardian minister for the suburbs, raised the issue. He demanded a stay on the demolition of slums constructed between 1995 and 2000. Sources said he contended that the DF government was already committed to the protection of slums up to 2000,” says The Times of India.

At least this misuse of power, another instance of corruption, is one in which the primary beneficiaries include the poorest of the urban poor. There is, for once, political consensus on slums; all political parties want them, so the mushrooming of slums, and, later, the regularising of slums, will be policy decisions.

If slums - and their mushrooming - is a reality, then it’s time that the town planning authorities recognised that they exist. Roads, transport, water, electricity, drainage, etc., need to reach the slums as well.

Slums are - perhaps even for those who live there - a blot on the landscape. Once slums are regularised, there is no sense in not developing infrastructure for the slums as is available in the non-slum areas immediately adjacent to the slums.

While the ‘corruption’ that causes the slums in the first place might, indeed, be the most benign of corruption, there is untold pressure that slums put on the infrastructure of a metropolis.

But while very few people seem to lose from slums, the city itself is a big loser. And that could well be far more than the hundreds of thousands of crores that we speak of.

And, of course, there’s another question that needs to be asked. Does the millionaire Kishor Patel pay any tax on his capital gain?