The major industrial and financial centre and the most populous city in India, Bombay traces its roots to the small settlement of the East India Company. After it ceded to the British crown in 1661, little growth was witnessed until the development of a stimulating economic environment in the nineteenth century. Factors that spurred the growth of Bombay include: the development of foreign shipping services to exploit its location on the Arabian Sea; the extension of a railway line to the cotton-growing areas in the hinterland of Bombay in the 1860's; and the boost in cotton prices as a result of shortages caused by the American Civil War. This economic growth resulted in an increase of population from only 10,000 in 1661 to 644,400 in 1872.
Conditions such as famine in the country side and epidemics in the city have created an unbalanced demographic profile throughout the city's history. The 1990 United Nations population estimate for the urban agglomeration of Bombay was 12.2 million, making it the sixth largest city in the world.
The economy in Bombay is rooted in a mixture of light and medium engineering industries, as compared with heavy engineering found in Calcutta. Other manufacturing activities in Bombay include: oil refining and petrochemicals, pharmaceuticals, publishing, tobacco, leather, timber, ceramics and jewelry.
Bombay is considered the most congested of any city in India. The 1981 census estimated that 2.8 million people lived in slums or near-slums. In spite of several programmes, the slums in Bombay continue to grow with the rapid increase in population. Slums have encroached on private and public land and overwhelmed all attempts at providing services.
The water supply situation in Bombay is critical, with the level of supply so much below demand that water use is restricted and reaches emergency proportions when the monsoon fails. Bombay is also one of the noisiest cities in the world and suffers from serious air pollution, both from noxious industries and automobile emissions. Despite a substantial public transport system, congestion in the metropolitan area continues. More than 2 million Bombay residents have no sanitary facilities, and most sewage collected in Bombay is discharged untreated or partially treated into creeks or coastal waters. Attempts have been made to relocate industries outside the island city, but industrial pollution remains a serious problem.