“What happens to the people who come?” asked R. K. Srivastava, the secretary of urban development in the Delhi state government, who is critical of the national development agency. “There is no housing stock. These people are forced to live in shanties, unauthorized colonies and, shall I say, subhuman facilities.”

In the 1970s, the Delhi Development Agency took control of New Ashok Nagar, which was then farmland. The agency never took physical possession of the land, even as it doled out compensation to farmers, and residents say that some farmers simply resold the same plots to people looking to live in the capital. “I knew this was an unauthorized colony, but I did not have the money to buy in an authorized colony,” said Mr. Tyagi, the longtime resident. A public school English teacher, he bought a plot of about 1,000 square feet for 8,000 rupees, or $148. “At that time, even 8,000 rupees were too much for me,” he said.

Mr. Tyagi estimates that when he arrived in 1984, perhaps 5,000 people lived in the colony. “We used to live without electricity,” he said. “We made our own arrangements with candles or kerosene lights. For water, we built our own hand pumps.” To fend off the occasional demolition notices, residents began dabbling in politics. As the populations rapidly grew in colonies like New Ashok Nagar, local lawmakers realized that these colonies represented troves of potential voters and found ways to divert funds to provide rudimentary electrical connections, roads and other services.

Tapan Kumar Chowdhury, 62, a retiree now working as an activist in the colony, said legalized status would be likely to improve sanitation and local health standards through installation of a true sewage system. But he remained skeptical about whether the election-year promises would be carried out, noting that politicians preferred to keep colonies vulnerable so that residents remained more beholden to them for even incremental improvements. “They have a vested interest in keeping us illegal and unauthorized,” he said, “so they can use us as a vote bank.”

Or as a real bank. Merchants like Vinod Kaushik, who runs a small pharmacy, said petty officials routinely demanded bribes to allow new construction projects. Others said that the police routinely required payoffs, too.

Mr. Srivastava, the state urban development secretary, agreed that even those colonies like New Ashok Nagar that were listed to become authorized still had to navigate loopholes, like providing layout plans for official approval. Doing this would mean that every lane and building must meet city specifications, though code violations are common. He characterized the requirements as somewhat unrealistic but said the process was established under a 2007 national law. He said state officials were planning to seek the “relaxation” of certain code requirements, which could help illegal colonies like New Ashok Nagar pass muster but would also leave them with substandard housing.

“Where will the poor man go?” he asked. “That is the problem.”

Partha Mukhopadhyay, an urban affairs specialist at the Center for Policy Research in New Delhi, said politicians had made promises that were not fulfilled, but that this time the process seemed much farther down the bureaucratic track, a reason for cautious optimism. “Usually, it is promised and not delivered,” he said. “It is possible that this time they might actually go through with the regularization process.”