MADRAS, India (AP) _ When Samuel Jayakody's kidneys failed, doctors told the math teacher he could survive only on a dialysis machine or if he found a new kidney.

Choosing the second option was easy.

Dozens of people offered to sell him a kidney. They came from ''Kidney Colony,'' a ghetto of this south Indian city where many people are willing to part with a kidney for enough money to start a business, pay dowries for sisters or daughters, or finance gambling or drinking habits.

''I paid 15,000 rupees ($500) for a kidney and 50,000 rupees ($1,660) for the operation ... but I've got a new life,'' Jayakodi said.

Mani Vijay Kumar, 27, who owns a bicycle repair shop, said he sold a kidney to buy more bicycles for renting.

''The money I get every month isn't enough even for myself,'' he said outside his shop, built of scraps of wood from crates. ''I have two daughters and a sister to be married.''

More people sell kidneys to strangers in India than in any other country, according to report in 1993 by the U.N. Commission on Human Rights.

Patients from developed countries also search for donors in such Third World countries as India, where there are kidney markets Bombay and New Delhi.

''Much of the demand comes from developed countries, and there is the lure of remuneration for potential suppliers from developing countries,'' according to the U.N. report.

India plans to introduce legislation this year that would permit doctors to remove organs from cadavers. Until that is passed, people suffering kidney failure must get a replacement from a relative or buy one.

The draft law also would regulate the sale of organs by living donors to prevent them being cheated, according to Bhupinder Singh Lamba, a Health Ministry official.

Like many other buyers, Jayakodi the teacher relied on kidney peddlers, most of whom work in hospitals, and a donor from Villiwakkam, the slum on the outskirts of Madras known as Kidney Colony.

The lure of collecting hundreds of dollars for a kidney has caused about 200 people in the slum, 40 percent of its population, to become donors.

During a walk through Kidney Colony, it was hard to find families that had not sold at least one kidney in recent years.

Senthil Thiyagarajan, 40, one of the first donors, sold his kidney in 1987 for 10,000 rupees, then worth slightly more than $900.

His brother Murthy said Senthil lost the money on horse races, then forced his wife, Rajathi, to sell one of her kidneys. With the money, she opened a shop that buys trash and sells it to recyclers.

Rajendran, a 17-year-old who gave only his first name, said, ''I won't sell my kidney for making a fast buck.'' But as he spoke, his mother wondered aloud how she would pay her share of a younger sister's dowry.

''Even if he got a regular job, we will need at least 30,000 rupees ($970) to conduct the marriage,'' she said. ''The only way out is to sell our kidneys.''

Half of India's kidney transplants are done in six Madras hospitals. That has made the city a major center for buying and selling the organs.

Dr. K.C. Reddy, a urologist at the private Pandalai Clinic, has performed 1,000 transplants and sees nothing unethical about selling kidneys.

''Nobody is forcing a person to give his kidney,'' he said. ''The decision is voluntary, but the result is monetarily beneficial.''

Reddy said removal of a kidney is an easy operation that carries little or no risk if patients are carefully screened.

A person with one remaining kidney has to work harder to avoid infections, especially in the urinary tract, and drink a lot of fluids to keep the kidney flushed. The person does not need to take medicine or restrict normal activities.

But Dr. A.P. Pandey, head of the urology department at Christian Medical College in nearby Vellore, said some deaths result from transplants because doctors do not take enough precautions.

A study of 130 patients from the Middle East who received kidney transplants in Bombay hospitals over several years found that 25 died of infections.