Chief Minister Devendra Fadnavis visited the spot and ordered an inquiry, apart from announcing a compensation of Rs 5 lakh for the kin of the deceased.
The government will bear all the medical expenses of those injured, he said.
"Additional chief secretary has been ordered to conduct a probe to find out what led to this unfortunate incident," the chief minister said.
"Redevelopment project had been approved by the agencies, and subsequently this building was supposed to be demolished. The final approval for demolition was granted in May 2016, but a few families opted to stay in the dilapidated building which led to this unfortunate loss of life," the CM said.
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"We will probe how the developer concerned failed to redevelop the project when it was granted the NOC way back in 2011," said Waikar.
Housing Minister Prakash Mehta also visited the spot. Forcible eviction could have saved lives, he said.
"It is high time we started forcible eviction of tenants living in such dilapidated buildings across the city, because we can't be simply mute spectators, seeing people die...Our ministry is going to think seriously about this," he said.
Earlier, Industries Minister Subhash Desai, who is the guardian minister for Mumbai, said a meeting will be held with the chief minister and an action plan prepared to rehabilitate those residing in such structures.
The Saifee Burhani Upliftment Trust (SBUT), run by the Bohra community, was granted the rights to redevelop the cluster of old buildings in the area, including the collapsed building.