The summer heat appears to have no effect on Bhagwan Das Bhat. He sits in a dimly lit, light-pink room with his legs folded on the cement floor, sipping hot tea and smoking a beedi (a cheap hand-rolled cigarette), as the mercury touches 43 degrees Celsius. Surrounded by musical instruments, metal trunks and rucksacks stuffed with bright, but very small, clothing, the 65-year-old leisurely inhales long puffs of short, thin tobacco granules wrapped in a leaf and blows the smoke towards a rickety table fan, gusting warm air. 

Bhat is a puppeteer by profession and has been in the family business for almost six decades. Soon, four French tourists will arrive at his house, for an afternoon performance given by the puppet master, a son and a grandson.

Once a prominent performance art in India, today Bhat's kathputlis - "wooden carved dolls" - are seen mainly by tourists and people with personal connections to the shows.

Bhat lives in New Delhi's fabled Kathputli Colony, the inspiration for the magicians' ghetto in Salman Rushdie's 1980 novel Midnight's Children. However, an inspiration it may be, this "colony" is living on borrowed time, as it faces demolition to make way for a shopping centre and a block of luxury flats. The residents were told they had to start moving out in February, but so far few have left, and no one is sure what the next move will be.

The area is categorised as a slum - it's a bona fide version of the raw poverty portrayed in the Oscar-winning film Slumdog Millionaire; an eyesore on Delhi's horizon - but Kathputli Colony's character, argue many, outweighs the definition. This is a slum with a soul. It is a beautiful, solitary conglomeration of India's traditional folk artists - many of whom have been ambassadors for their country - and the world's largest community of street performers.

Spread over 5.22 hectares - roughly the size of nine football pitches - the quarter is home to more than 13,000 people, living in about 3,000 houses painted bright turquoise, green and pink. It's a maze of meandering, narrow lanes where open sewage flows like a stream in between the tightly packed houses, and where magic, craft and performance linger on every street corner.

Fifty years ago, this was a campsite for travelling gypsies who were passing through Delhi. With increasing opportunities in the capital, people such as Bhat and his family opted to settle here, in makeshift tents, in an area that was surrounded by jungle. And this is where puppeteers, magicians, fire-eaters, sword-swallowers, dancers, acrobats and snake charmers from far-flung states prospered.

Every other house in Kathputli Colony has a performer living in it, and each has a story to tell.

BHAT, A SHORT MANWITH A pot belly, explains the origins of his puppetry shows, which stretch as far as the state of his birth, Rajasthan, in northern India.

"The stories [I tell with puppets] have been passed from generations," he says. "We sing about the kings and the queens."

According to the 2006 book Indian Puppets, by Sampa Ghosh and Utpal K. Banerjee, the art form can be traced back to Delhi's 12th-century ruler Prithviraj Chauhan, who ordered the Bhats of Rajasthan to produce plays about his life. The word " bhat" is used to describe puppeteers from Rajasthan and also serves as their surname. In the 17th century, Amar Singh Rathore, a courtier of Mughal emperor Shah Jahan, gave them special patronage.

These historical figures are the protagonists of Bhat's shows, which can last for up to an hour. While songs help to narrate and refresh history, lavishly adorned kathputlis bring the characters to life.

Bhat hand-carved every one of his more than 50 puppets. The process, he explains, starts with the moulding of wet wood from a mango tree. It takes him about three days to give it a shape. His younger son then paints the puppets, to give them a human aesthetic, while his wife stitches their clothes.

"I've been doing this since I was 15," says Sarbati, Bhat's wife, who resembles a human-sized puppet, with kohl around her eyes, a red bindi on her forehead and a striking nose ring. "Our names are associated with this [art form].

"This is the only thing we can do, and we want to keep it alive," she adds, piercing a needle and thread into a puppet hand in an airy courtyard-like space in their three-bedroom house.

Shankar Lal Bhopa, a fellow colony resident, produces phad paintings, another art form from Rajasthan. Made on cloth using a mix of home-made colours, phad paintings are often several feet long and serve as an account of folk deities, such as Pabuji.

A 15-foot-long painting takes him almost two months to complete, he says, and will fetch between 20,000 rupees (HK$2,600) and 25,000 rupees. He is one of only four phad painters left in the colony, says Bhopa, 50.

In all its grandeur, the phad portrays the adventures and heroism of deities in warm, earthy tones, and it's the responsibility of Bhopa singers such as Ghotli Devi to narrate the story, with the painting as a backdrop.

The 58-year-old, who lives in a single-room house painted an earthy orange, with posters of Hindu gods and goddesses plastered on the walls, remembers learning Pabuji ki Kahani ( The Epic of Pabuji) - a 600-year-old, 4,000-line poem and the phad painting it accompanies - from her grandmother, while growing up in Rajasthan.

"When someone was sick in the village, we travelled for hours to their house and sang for their recovery," she says, before reciting a couple of lines in a mellow voice. "It's spiritual and divine.

"We sang every day from 7am to 7pm for a week to finish the entire story," she says, colourful shawl covering her entire face except for her mouth. "Now, people aren't interested."

Ghotli Devi's voice once took her to countries including Britain and the United States, when the Indian Ministry of Culture invited talented folk artists to showcase their skills at diplomatic events. But her performances are now mostly confined to her room.

"Somehow we will continue our tradition," she says. "I'm teaching my grandchildren.

"We won't let it die."

THE CITY'S CULTURALCANVAS has changed drastically from the days when Kathputli Colony residents travelled in caravans into Delhi. Television and now the internet have stolen attention away from street performers, once an entertaining and enchanting force.

As her son watches a Bollywood music channel on TV, Laxmi Bhat shakes her head.

"I don't like this," says the 35-year-old dancer, who specialises in folk dances such as Kalbelia, Chari and Ghoomar. On the screen, the lead characters are moving to a preppy Hindi song. "I find this a bit provocative. There's no charm or cultural aspect."

Bhat's grandmother forced her to learn to dance, she says. The mother of five can balance up to seven water pots on her head and dance on the edge of a sword or on shards of glass, a part of Rajasthan's Bhavai dance.

With limited education and no other skills, Bhat says, her traditional folk talent has helped secure a livelihood. She travelled to Denmark for her first performance, at the age of 10, and has toured a dozen other countries since, displaying Indian culture.

"In a foreign [country], it's unique - people love it and respect us. But here, people are more interested in Western stuff. There's not much [we can] do in movies, too," says Bhat, who has performed in two Bollywood films, including Bandit Queen, about the dacoit-turned-politician Phoolan Devi.

Most artists in this colony have worked overseas, having been employed by government and non-government bodies to showcase India's diverse customs. Many have performed for diplomats and heads of state. Each has a thick scrapbook filled with photos and certificates. But after each trip, they return to shoddy houses with only a handful of cash to survive on until their next performance.

"[In India, people] see artists like us as a poor guy living in the slum," says Kailash, one of Bhagwan Das Bhat's sons, who leads a group of drummers called Dil Se, Drum Se ("from the heart, through drums"). "When we perform at nice venues, they praise us, but as soon as we're out, no one even cares. An artist's reputation is limited to the stage."

Kailash, 27, says his group has tried to reach out to a younger audience. Dil Se, Drum Se employs eight kinds of musical instrument - including, along with drums, a one-stringed, high-pitched instrument called a tumbi and a wooden clapper called a khartal - from around India, as well as tap dance. However, putting on a show involving 10 performers means high production costs, which make organisers in India hesitant, he says.

Like his son, Bhagwan Das is trying to reach out to a new, young audience. His puppet shows, mostly targeted at school children, are slowly modernising and adopting new plots.

"Before, [slave girl] Anarkali used to dance in the king's court," he says, exploding into laughter. "Now she does disco and dances to [Indian pop artist] Honey Singh."

The stories remain the same, but the presentation is different, says the puppet master.

Bhopa speaks of a similar trend in phad paintings. The Epic of Pabuji is being replaced by contemporary topics such as Azadi ki Phad, which illustrates India's independence battle on a 15-foot-long cloth. He believes that is something with which the younger generation can connect.

Bhopa has also started making miniature artworks, which he sells at handicraft markets.

"It's less time consuming and fetches constant money," he says.

But not all performers are able to update their art - the magicians, jugglers and acrobats who still perform on the streets find it challenging to compete.

For 70-year-old Manoj Khan, it's a daunting task: the magician is weak and his voice frail but he refuses to retire. His white beard speaks of his experience and, he says, he can still attract an audience using his flute and damaru, a small hand-drum that fits in the palm. Usually, he has an assistant, sometimes a family member, sometimes an apprentice from the colony.

He takes out his props one by one and demonstrates his magic: Khan performs the popular cups and ball trick, where he makes the balls vanish under the cup and then reappear; he also shows his card magic, which he calls a "skill of the hands".

In the Khan family, everybody is a magician - all 65 of his grandchildren know a trick or two and one of Khan's sons, Ishamuddin, reinvented the Indian rope trick.

"It runs in the family," smiles Khan, looking at some grandchildren preparing the stage for a show. "Our generation didn't have any knowledge or skills to take our magic to another level. I hope these children can make something out of it."

But young magicians, such as Ishamuddin's son, Altmash, say street magic is no longer sustainable. Furthermore, any street performance, including those given regularly by most artists in the colony, is a violation of the Bombay Prevention of Begging Act 1959, enforced in Delhi since 1960. Soliciting or receiving alms in a public place for any sort of performance is considered begging and is punishable under the law.

"If I want to keep my tradition alive, I'll try my best to do it differently," says Altmash, in English. The 19-year-old is waiting for his high school results and aspires to study business. "I'll do something like the foreigners do - shows like [American illusionists] David Copperfield and Franz Harary."

IN 1977, THE RESIDENTS officially registered Kathputli Colony as India's first artistic cooperative: the Bhoole Bisre Kalakar Sahkari Samiti or the Cooperative of the Forgotten and Neglected Artists.

According to Rajeev Sethi, an internationally acclaimed designer and a long-time supporter of the colony, the artists coming together in such a way was "a real shift and an objective towards their instinct to survive".

In a letter to the government in 1976, the residents complained that they had never been recognised as artists and that they remained "scattered and forgotten, wandering from place to place".

"For some time, now, we have been experiencing the need for a base we can call our home," it stated.

Almost 40 years later, residents are still struggling with the notion of home. Every family here is worried about the Delhi Development Authority's (DDA) order to redevelop the colony. Residents will be shipped out and rehoused in transit camps for two years while the district is razed to make way for the gleaming new buildings, and then, it is promised, they will be rehoused in new flats in an area that will replace the colony.

According to the DDA website, "families shall be given a new lease of life by providing them the latest modern apartment with high-end amenities".

Most locals don't want to relocate to these "temporary tin shelters". They fear being trapped there, never to return. And even if they do return, how will they make a living?

Dunu Roy, director of Hazards Centre, a multidisciplinary support group assisting the residents in exploring more favourable alternatives, sees the transit camps and high-rise tenements as problematic for sustaining home-based work and also lacking in performance space. He says the colony should instead be redeveloped with better municipal services for sewage and waste management.

All around the neighbourhood, there are flyers discouraging people from moving out. For most, the colony defines their existence.

Bhat, the puppeteer, despises the idea of leaving: "If there are no artists, there won't be any art. Their taking this colony means they're taking away our art, our lives."

"If we relocate, our names will vanish," says a furious Sarbati, cutting into the conversation. "We have invested in every brick. It was an unfit place to live but we've made it our home."

The disappearance of a cultural cluster such as Kathputli Colony could deal a severe blow to India's cultural heritage and to performers who are trying to save their craft from extinction.

The residents do have supporters. Tomorrow We Disappear, a documentary about the colony's artists, premiered at New York's Tribeca Film Festival in April, and campaigners have started online petitions and social media groups, such as Friends of Kathputli Colony Delhi, on Facebook. But Sethi, also chairman of the Delhi-based Asian Heritage Foundation, sees a bleak future for the colony unless the government acknowledges the artists and their craftsmanship.

"The government has a responsibility," he says. "If they can cry about whales and tigers, they should look at human skills, too."

Bhat adds, "The government takes us abroad for cultural exhibitions as a showpiece. Then we return to our homes as struggling artists again."

Despite the melancholy, Kathputli Colony retains its magic. If this place could become a tourist attraction, displaying India's disappearing acts, its residents might be able to prove its future is viable.

Unfortunately for the artists who linger here, time is running out.

Watch: Tomorrow We Disappear - Teaser Trailer