The Development Logic and Practical Dilemmas of the Informal Economy in the Process of Urbanization: A Case Study of Dharavi Slum in Mumbai, India

Abstract

Urbanization is an inevitable trend in global socio-economic development. As a concomitant phenomenon of the urbanization process, the informal economy plays a significant role in alleviating employment pressure and stimulating urban vitality, while at the same time facing multiple challenges such as institutional deficiencies and inadequate protection of rights and interests. Taking Dharavi, a major slum area in Mumbai, India, as a case study, this paper examines the driving forces behind the emergence of the informal economy through the lens of urbanization theory. It further elaborates on the dual role of the informal economy in urban development and analyzes the practical difficulties it confronts in reality. Finally, the paper proposes pathways for the standardized and regulated development of the informal economy, with the aim of providing references for balancing development efficiency and social equity in the process of urbanization.