Understanding Informal Settlements: Meaning, Types, and Challenges

Walk through any major Indian city and two contrasting realities sit side by side. Gleaming high-rises overlook clusters of tin-roofed shelters, and busy commercial streets give way to lanes where families share a single tap. These pockets of unplanned housing are known as informal settlements, and they are home to a significant share of the country’s urban population. Understanding what these settlements are, how they are classified, and what life within them looks like is essential to making sense of modern urbanisation in India.

What are informal settlements? 🔗

Informal settlements are residential areas that exist outside the formal planning and regulatory framework of a city. The United Nations defines them as neighbourhoods where inhabitants have no security of tenure over the land they occupy, where basic services and city infrastructure are absent or inadequate, and where housing may not comply with current planning and building regulations. These settlements often sit on undeveloped urban land, public property, hazardous strips along railway lines, riverbanks, or marginal plots that formal real estate markets have ignored.

The label “informal” does not just describe poor housing quality. It captures a layered condition involving illegality of land occupation, absence of building permissions, and exclusion from municipal service networks. At the most extreme end, the UN considers slums the most deprived and excluded form of informal settlement, characterised by overcrowding, unsafe structures, and limited access to water and sanitation.

The scale of this phenomenon is striking. According to Census 2011, India recorded around 65 million people living in slums, and the absence of a more recent census means that planners still rely on this dated figure. UN projections suggest the country’s urban population will nearly double from 461 million in 2018 to 877 million by 2050, which means informal housing is unlikely to disappear from the urban landscape any time soon.

Why informal settlements emerge 🔗

Informal settlements are not accidents of urban growth. They are the predictable outcome of a structural mismatch between the demand for affordable housing and what formal real estate markets actually supply. Rapid rural-to-urban migration, low wages in the urban informal economy, soaring land prices, and a chronic shortage of low-income housing push millions of families into shelter arrangements that the city has never officially approved.

The numbers reveal how deep this gap is. PMAY-U 2024 reports a shortfall of 18.78 million housing units in Indian cities, and Mumbai alone needs around one lakh new apartments every year while constructing only about 20,000. When the formal market cannot accommodate workers who clean offices, drive autorickshaws, build malls, and staff restaurants, those workers settle wherever they can – on pavements, beside drains, on vacant public plots, or in older neighbourhoods that have slowly slipped out of formal regulation.

The seven main types of informal settlements 🔗

Indian planners, particularly in Delhi, recognise that informal settlements are not a single category but a family of distinct types. Policy documents of the Government of NCT of Delhi identify seven types of settlements besides planned colonies, including slum designated areas, jhuggi-jhompri clusters, unauthorised colonies, regularised unauthorised colonies, resettlement colonies, urban villages, and rural villages. Each type tells a different story about how informality is produced and managed.

Slums and notified slum areas 🔗

Slums are the most visible face of urban informality. The Census of India classifies them into three legal categories: notified slums (areas officially declared as slums under a Slum Act), recognised slums (areas acknowledged by state or local authorities but not formally notified), and identified slums (compact areas of at least 300 people or 60-70 households of poorly built congested tenements with inadequate infrastructure). The notification of a slum is significant because it brings the settlement into the ambit of state intervention. Notified slums become eligible for upgradation programmes, sanitation projects, and certain protections against arbitrary eviction. Regional names reflect local histories: slums are called Jhopadpattis or Chawls in Mumbai, Bustees in Kolkata, Cheris in Chennai, Ahatas in Kanpur, and Keris in Bangalore.

Jhuggi-jhompri clusters 🔗

Jhuggi-jhompri clusters, often abbreviated as JJ clusters, are temporary squatter settlements built on public land without permission from the land-owning agency. Houses are typically constructed from plastic sheets, tin, bamboo, tarpaulin, and salvaged wood. These clusters emerge organically around construction sites, industrial areas, and transport corridors where casual workers find employment. In Delhi alone, JJ clusters accommodated about 20.72 lakh people, accounting for nearly 15 percent of the city’s population. Residents face the constant threat of demolition because they have no legal tenure, yet many clusters have existed for decades.

Resettlement colonies 🔗

Resettlement colonies are sites where the state relocates residents of demolished slums or JJ clusters. They occupy a peculiar middle ground in the informal-formal spectrum. Residents receive a measure of legal land tenure, but the colonies themselves are usually located on the urban periphery, far from livelihoods, with inadequate infrastructure and weak transport connections. Studies of Delhi’s resettlement colonies show that families often lose access to the work, schools, and social networks that anchored their old neighbourhoods, even as they gain a formal address.

Unauthorised colonies 🔗

Unauthorised colonies are residential developments built on land that has not been earmarked for housing in the city’s master plan, or on land within the development area that has not yet been zoned for residential use. These colonies are often established by land assemblers or “aggregators” who informally subdivide agricultural land and sell plots to buyers. Unlike JJ clusters, unauthorised colonies often house middle and lower-middle income groups in pucca structures. Periodic political promises to regularise these colonies have made them a powerful electoral constituency, particularly in Delhi.

Pavement dwellers 🔗

Pavement dwellers represent the most acute form of housing exclusion. They live on city sidewalks, traffic islands, under flyovers, and along outer walls of public buildings, using cloth or plastic to mark out a sleeping space. They lack even the basic shelter that jhuggi residents have managed to build. Pavement dwellers are exposed to weather, traffic, harassment by authorities, and routine drives to “clean up” public spaces. Their visibility on Mumbai’s streets in the 1980s led to landmark public interest litigation that helped establish the right to shelter as part of the right to life under the Constitution.

Urban villages 🔗

Urban villages are former rural villages that have been engulfed by expanding city boundaries. They retain elements of their agricultural past – narrow lanes, irregular plot shapes, common ponds, and caste-based residential patterns – while the surrounding farmland gets converted into planned colonies or commercial zones. Urban and rural villages are essentially areas that have been grandfathered into the city and partially exempted from standard planning norms. Because they sit outside the formal building byelaws that apply to planned colonies, urban villages have densified rapidly, often hosting rental housing for migrant workers and small enterprises.

Regularised unauthorised colonies and legally notified slum areas 🔗

Finally, the typology includes settlements whose informal origins have been partly absorbed by the formal system. Regularised unauthorised colonies are unauthorised colonies whose existence the state has accepted, usually in exchange for a regularisation fee and infrastructure charges. Notified slum areas similarly receive recognition that protects residents from arbitrary eviction. Both categories show that informality in India is rarely permanent or absolute. It exists on a sliding scale, and political mobilisation, electoral incentives, and judicial intervention regularly push specific settlements towards greater formality.

Challenges that define life in informal settlements 🔗

Living in an informal settlement means navigating multiple, overlapping deprivations every single day. Each challenge feeds into the others, creating cycles that are hard to break without targeted policy support.

Inadequate sanitation and water 🔗

Access to clean water and toilets is perhaps the most visible failure in informal settlements. Census 2011 data shows that 34 percent of slum households did not have latrines within their premises and 43 percent had no source of drinking water. Shared community toilets are often poorly maintained, unsafe for women at night, and out of reach for the elderly and disabled. Open defecation, contaminated groundwater, and inadequate drainage drive recurring outbreaks of diarrhoea, typhoid, and other water-borne diseases.

Overcrowding and poor housing quality 🔗

Density in informal settlements is extreme. Entire families often share a single room that doubles as a kitchen, living area, and sleeping space. Walls are made of corrugated iron, plastic, or low-quality brick, and roofs leak during monsoons and overheat in summers. Overcrowding accelerates the spread of respiratory infections and tuberculosis, a fact that became painfully clear during the COVID-19 pandemic when physical distancing was simply not possible.

Insecure tenure 🔗

Land tenure is the structural fault line of informality. UN-Habitat identifies tenure insecurity as the most fundamental issue that informal settlements face. Without legal rights to the land they occupy, residents cannot use their homes as collateral, hesitate to invest in upgradation, and live under the constant shadow of eviction. This insecurity also discourages utility providers and municipal bodies from extending services, locking settlements into a self-reinforcing cycle of informality and deprivation.

Limited access to services and livelihoods 🔗

Schools, primary health centres, anganwadis, and ration shops may be physically present but are often overcrowded, understaffed, or located inconveniently. Residents working in the informal economy lack employment contracts, social security, and protection from exploitation. Children grow up balancing school with household labour or wage work, and women carry the additional burden of fetching water, queuing at community toilets, and caring for the sick in environments that constantly produce illness.

Vulnerability to disasters and climate risks 🔗

Because informal settlements often occupy hazardous land – floodplains, hillsides, drainage networks – they are disproportionately exposed to climate shocks. Slums are typically close to jobs but lack tenure security, resilient housing, and services, exposing residents to eviction cycles, floods, fire, and heat risk. As Indian cities face more intense heatwaves and extreme rainfall, the families with the fewest resources are the ones most likely to lose their homes and belongings.

Why the typology matters for policy 🔗

Treating all informal settlements as one category leads to one-size-fits-all policies that rarely work. A pavement dweller, a JJ cluster resident, and an unauthorised colony homeowner face very different problems and need very different interventions. Pradhan Mantri Awas Yojana-Urban 2.0, approved by the Union Cabinet in August 2024, aims to provide one crore houses for urban poor and middle-class families over the following five years, but its success depends on recognising this diversity. In-situ upgradation may work for established JJ clusters, regularisation suits unauthorised colonies, and night shelters with day-care services are more urgent for pavement dwellers. Without an accurate typology, public spending risks missing the populations it intends to help.

What do you think? Should the state prioritise in-situ upgradation of existing informal settlements, or focus on building large-scale affordable housing on the urban periphery? And how would you balance the rights of long-term informal residents with the planning needs of a growing city?

References

1. https://ebooks.inflibnet.ac.in/socp07/chapter/informal-settlements/
2. https://www.opensciencepublications.com/fulltextarticles/ESS-2454-5953-3-124.pdf
3. https://thediplomat.com/2024/09/why-millions-go-unaccounted-for-in-indias-invisible-slum-crisis/
4. https://sociology.institute/urban-sociology/urban-poverty-housing-challenges-indian-cities/
5. https://link.springer.com/chapter/10.1007/978-81-322-2154-8_8
6. https://compass.rauias.com/current-affairs/slums-india/
7. https://cprindia.org/wp-content/uploads/2021/12/Categorisation-of-Settlement-in-Delhi.pdf
8. https://www.patrickheller.com/uploads/1/5/3/7/15377686/cities_of_delhi-overview.pdf
9. https://allianceforscience.org/blog/2023/05/hunger-poverty-and-disease-stalk-indias-slum-population-as-sustainable-development-goals-ignored/
10. https://www.amulyacharan.com/2025/08/23/slum-rehabilitation-in-india-best-practices-and-new-challenges/
11. https://www.orfonline.org/expert-speak/pmay-u-s-in-situ-slum-redevelopment-scheme-a-critical-analysis