I agree with the previous educator that there are many themes including the aforementioned "self-identity" and "isolation;" however, I would add that the MAIN theme of the story is (for lack of a better term) immigrant assimilation difficulty.
"Squatter" is aptly titled in that the poor immigrant named Sarosh, from Bombay India, is unable to adapt to the way western culture (and specifically Canadians) use the bathroom. Growing up in Bombay, without plumbing, and squatting to defecate his entire life, Sarosh struggles to use an actual western toilet with its over-use of water and his inability to "squat." There are other bathroom customs that Sarosh must overcome as well. Further, even though the following quotation is from a different story ("A Fine Balance"),
You have to use your failures as stepping stones to success. You have to maintain a fine balance between hope and despair. In the end it’s all a question of balance.
Sarosh's issues with western toilets are a sort of metaphor for all immigrant troubles as a whole. Eastern cultures and Western cultures are very, very different. Mistry's point is that the two do not blend well and any immigrant from the East to the West (and vice versa) should expect similar challenges. What is interesting about this story is that all of Mistry's other fiction deals directly with India, so this one stands out in its theme of immigration issues.
There are multiple themes in Rohiston Mistry's short story "Squatter".
One theme examined in the story is self-identity. Sarosh, a struggling immigrant, tries to find his place in white society. Without a full understanding of the new culture, Canadian, Sarosh tries desperately to find his own personal identity.
Another theme examined in the text is one of isolation. When Sarosh is unable to find himself in Canada, he tries to return to his homeland. Unfortunately, so influenced by Western culture, Sarosh is unable to fall back into the life which he knew prior to leaving. Sarosh does not feel at home in Canada, he cannot acclimate, and does not feel at home in his homelands, in Bombay, either. Sarosh is left isolated based upon his inability to adapt to either culture.