AbstractThis article examines an incident of fire in a squatter settlement in Delhi to understand the interaction between the urban poor and the state. Following the incident, the Delhi government undertook different welfare measures for the affected residents. These included immediate relief in the form of temporary tents for the families, a proposal to build proper houses for them, and compensation checks as direct monetary support. The empirical materials presented in this article show how state interventions tend to suffer from deficiencies of knowledge, trust, and bureaucratic effectiveness. Thus, they do not commensurate with the apparent intentions behind them. Each of these welfare measures engendered an entanglement of the urban poor in the state that affects their relationship to the law, urban space, the local economy, and bureaucratic structures. Analyzing the unfolding of the everyday state on the ground, I suggest that a squatter settlement's dynamic and entangled relationships with the state make it a unique site for analysis of the state from an urban perspective. Critical interpretations of their interactions and the discourses they engender are key ethnographic resources for understanding the dynamics of inequality in contemporary cities.