A few days of heavy rain and the city looks battered - as if hit by a typhoon rather than a stronger-than-usual monsoon. There is chaos at the airport, the train stations are overflowing with stranded commuters, and the crumbling potholed roads are like running sewers.

On the two-hour crawl from Bandra to Colaba I notice that enterprising pavement squatters have now begun to invest in stepladders, to hoist themselves on top of their roadside hovels. There they sit, night after night, with bits of tin and plastic for protection, braving the downpour in a precarious state of suspension rather than be consumed by the watery mess below.

Diehard Mumbai optimists will probably see this as yet another example of the sheer inventive genius of its inhabitants, one more instance of the city's never-say-die spirit. But I disagree.

Mumbai is now a city in perpetual crisis. Like a patient suffering from a breakdown of the immune system, it is increasingly prone to disasters, both natural and manmade. If there was a medical facility to treat the ills afflicting the great cities of the world, Mumbai would be the case headed straight for the ICU.

After the devastation caused by last year's floods, the chief minister went rushing to Delhi to beg for funds to upgrade Mumbai's archaic storm water drainage system. The system is about a hundred years old and no government woke up to do something about it until calamity struck on a huge scale.

The project is expected to cost Rs 1,800 crore (Rs 18 billion), but last month, on the first anniversary of the floods, Vilasrao Deshmukh was still hoping that the first part of the funding, about Rs 500 crore (Rs 5 billion), would come through soon. This has nothing to do with financial assistance that the city is demanding for its metro and flyovers.

So how broke is the country's financial capital? Mumbai was always a place of contrasts (in its clich�d image of slum posed against skyscraper) but these now appear more glaring in a declining city. Mumbai's appetite to generate and spend money seems limitless.

Oblivious of the torrents outside, bars and restaurants were packed to capacity last week. There wasn't a spare seat to be found in the vast lobbies of luxury hotels while outside the newly restored Metro cinema - a fine old relic of Mumbai's art deco heyday - crowds stood in pouring rain late into the night for a glimpse of Abhishek Bachchan.

Construction never stops in one of the world's most overbuilt cities and property prices continue to climb as dizzily as the tacky new blocks going up at every corner.

Environmentalists have warned against the disaster of unchecked numbers of high rises being built on the land vacated by the old textile mills - the Bandra-Kurla complex for example -but it is the hunger for illicit building that oils Mumbai's financial machinery.

In Vikram Chandra's new novel (Sacred Games) about gang wars in the city, the main gangster's rise is traced back to his early days as a slum lord on land grabbed in the outer suburbs. Turf wars, quite literally, centre on turf.

For all its wealth and its ability to produce and consume, Mumbai has no money for rudimentary infrastructure. Its roads are pitiable and its taps are dry. Lack of planning has been exacerbated by bad decisions.

Activist Bittu Sehgal pointed out recently that the city will continue to flood because the mouth of the Mithi river, where it enters the sea, is blocked by flyovers. "We will continue to have floods, whether it is 944 millitres last year or 134 millimetres this year."

The city's decline is terminal. Mumbai may have a great heart but it has no conscience.