How do you solve one of the world's most intractable housing problems? One floor at a time, says Rajkumar Nader, as he gazes up a nearly vertical ladder to the second storey of his tiny home on a cramped backstreet in the heart of Dharavi, Mumbai's largest slum. "My brother will be married in May, and we need extra space for him and his wife to live here", he says. "So we are adding a new level."

Up above, a team of four builders is working quickly in cramped, dusty conditions, aiming to add a third floor to Mr Nader's home in just two weeks. Dozens of similar self-improvement or makeover projects, overseen by teams of contractors with little formal training, can be found dotted around Dharavi.

These are projects that embody the aspirations of the estimated 1m or more residents who crowd into the slum's 540 acres - people hoping for a little more space or a modicum of privacy from neighbours, and saving a little money each month to turn their dwellings from tents into shanties and ultimately solid brick homes.

  The skyline over Mumbai

Some experts, dismayed at the slow progress and disappointing results of more grandiose government redevelopment plans, believe these informal slum upgrade schemes could form the basis for a longer-term plan to help India's more than 170m slum dwellers.

Around half of Mumbai's population live in slums, according to India's last census, placing the city at the forefront of a housing crisis that has shamed the nation's leaders and vexed its policy makers. With projections now suggesting the population of India's cities could double to around 600m over the next 20 years, it is also a problem set to worsen rapidly without firm action.

Manmohan Singh, prime minister, has repeatedly called for an end to slum housing. Since the 1980s innumerable schemes have been introduced to help build better homes for India's very poorest - most famously a series of potentially innovative moves to hand valuable city-centre slum land to private developers, on condition that they provide free high-rise housing for existing residents, ideally on the same site.

But the results have been mixed, at best. The best known plan, to redevelop Dharavi itself, is effectively on hold, gummed up by court cases and bureaucratic infighting between developers and local politicians. Such schemes have been dogged by accusations of corruption and complaints about poor-quality housing that leaves residents separated from their families and jobs.

"The stock which has been produced through theses schemes is often extremely bad. These are effectively vertical slums," says Matias Echanove, a founder of Urbz, an academic research network dedicated to studying "user-generated cities". "You visit buildings built 10 years ago which look [as if] they were built 30 years ago. They are already crumbling," he says.

Mr Echanove is part a wider group of experts and campaigners who launched an exhibition at Mumbai's prestigious Sir JJ College of Architecture, highlighting slum upgrading as a potential alternative to demolition and redevelopment. This approach is used increasingly around the world, they say, notably by local authorities aiming to retrofit the favelas of Brazil's business capital São Paulo.

Students from the college have visited slums around the city to observe local builders at work, and returned impressed by their technical sophistication and clever use of space as they transform make-shift shanties into sturdy, 300 sq ft houses.

The exhibition is part of a broader trend to re-examine slum housing. Recent books by Harvard economist Edward Glaeser and environmentalist Stewart Brand, in particular, have criticised the image of slums as desperate poverty traps, instead describing them as entrepreneurial, socially supportive, and even relatively ecologically friendly.

Ultimately, even if stalled government plans to redevelop areas like Dharavi can be restarted, experts say they are unlikely to provide a model for most of the rest of India, where land values are not high enough to attract developers.

"The best option may be for the government to focus on providing the basic trunk infrastructure of water, sanitation and so on, and then let the people themselves invest in upgrading their own houses," says Ashish Karamchandani, head of the Mumbai office for Monitor Inclusive Markets, a consultancy that has spent a number of years researching low-cost housing markets in India.

Back in Dharavi, Saraja Udaikumar, a community leader who has lived in the slum for 18 years, is hopeful that the city's housing authorities will soon provide her family and their neighbours with new homes. But she says the area has already waited years for promised redevelopments, and it could be two more before work begins, if at all.

"For two children and a husband and wife this is ok," she says, gesturing around the modest two-room ground floor of her small home. "But for others with less, they really do need this help [to improve their homes]." If they don't get it, fixing up what they already have could be the only option.