GWEN IFILL: Now, part two of our series of reports on the world's largest democracy, India, where voters go to the polls later this month.
Tonight, special correspondent Simon Marks reports on plans for dramatic change in a slum catapulted to Oscar-winning fame.
SIMON MARKS, NewsHour Special Correspondent: If it looks like a scene from "Slumdog Millionaire," that's because it is the place where part of the Oscar-winning movie was filmed.
Every day in the center of Mumbai's Dharavi slum, clothes are washed at a community laundry. Some of the slum's residents wade waist deep into waters that are heavily polluted by open sewers. The stench is hard to describe, but this is the only place in the neighborhood with even the most basic laundry facility.
The neighborhood is Asia's largest slum: 535 acres of land in the heart of India's financial capital. Dharavi is prime real estate, lying at the junction of two busy commuter lines and just a few miles from Mumbai's international airport.
How many people actually live in the warren of lanes and alleys that comprise the slum is a subject of heated debate. But many of them, like Siddharth Mehde, who operates a small transportation business here, have lived in Dharavi for more than 40 years.
SIDDHARTH MEHDE, Slum Resident (through translator): They say they've taken an official survey, but it was done from the air by helicopter. Tell them to come to Dharavi. They should meet everyone, walk the streets, even though they're big, important people.
SIMON MARKS: Those important people who took an aerial survey of Dharavi did so as part of a proposed government-endorsed slum rehabilitation project. They concluded that around 300,000 people live here; community activists insist the real number is closer to a million.
Whatever the truth, the plan calls for Dharavi to be bull-dozed, for its existing residents to be re-housed in modern apartment buildings, and for much of the land here to be made available for up-market housing, office space, and commercial areas for India's upwardly mobile.
And that doesn't sit well with some families, despite the slum's privations.
SIDDHARTH MEHDE (through translator): We've never asked the government for new houses. The government came to us. We're very happy where we are. Some people even say that, if we move into bigger houses, there will be problems, because we'll have to pay property taxes and we'll be living right alongside people who are wealthier than us.
SHAAN MEHTA, MM Project Consultants Ltd.: I don't blame some people for being a little skeptical, but at the end of the day this is a project that is going to break ground.
SIMON MARKS: The slum clearance proposal is the brain child of Shaan Mehta and his father, urban designers who used to build mansions in Long Island until they moved back to India a decade ago.
They're promising to create a world-class environment in Dharavi by insisting that property developers who win bids to develop the land are required first to re-house the slum's existing residents in state-of-the-art high-rise housing.
Developers will also be required to provide health care, schools, and all the essential services that any modern first-world city demands. Only then will they be allowed to use the land that's left, an estimated 40 million square feet, for upscale and highly profitable housing and commercial real estate.
SHAAN MEHTA: They'll be given, you know, absolutely international standard of building so that there won't be a question of poor construction or, you know, paint peeling or the plumbing not working or anything like that. It will be absolutely a professional standard of that.
Apart from that, one of the things that we believe is very important is to provide a lot of amenities for them. So we'll be providing top-class health care. We'll be giving them income-generating capabilities. We'll be doing a lot of education initiatives. Environmentally, it will be a very eco-friendly suburb.
There will be the naysayers, but I'm very confident it will take off.
SIMON MARKS: There certainly are naysayers in Dharavi. John Bai is one of them. He's lived in his home -- he calls it the Lily Mansion -- since 1976. The stars of "Slumdog Millionaire" used it as a dressing room, but he's used it to raise four children. And now he's part of a community movement, National Slum Dwellers Federation, campaigning for Dharavi's social and economic pillars to be retained.
JOHN BAI, National Slum Dwellers Federation: We are not against the redevelopment. We want redevelopment. And who doesn't want redevelopment? Everybody wants good facilities, good amenities, safe water, toilets, all these things, schools and all types of facilities.
Everybody wants that, but not at the cost of our bread and butter. See, most of the people, they are earning a living in their house itself. They've got small home industries. Now, if we are displaced from this place, in buildings, we can't do all these businesses.
SIMON MARKS: Businesses, like pottery. The potters of Dharavi are known throughout Asia for the quality of their work. They're all small-scale entrepreneurs who throw their own clay, have built their own kilns in one section of the slum, and dried air pots in the open air of Mumbai's nearly tropical climate.
They argue the proposals to rehabilitate Dharavi and house its lower-income residents in high rises puts their livelihood at risk.
JAYESH DENK, Dharavi Resident: Then there will be no drying space, actually, which we need, no manufacturing space. They don't understand, actually. The kind of space we need, they don't understand that.
SIMON MARKS: But the advocates of slum rehabilitation argue that their proposal's importance as a symbol of India's progress trumps the concerns of some of the slum's artisans.
SHAAN MEHTA: If a city has ever had a chance to reinvent itself, to make its mark on the international world, I believe that the process through which it will happen is through slum rehabilitation.
The whole country is waiting and watching for the first bulldozer to go in and bulldoze those slums so they can start doing it in their cities, too. I think this is really a pilot project for the rest of India and maybe even the rest of the world, as far as slums are concerned.
SIMON MARKS: In the decade since plans for Dharavi's redevelopment have been seriously discussed, the residents of the slum have won concessions from the government. Each family is now due to receive an apartment with a carpeted area of 269 square feet. That's more than the developers were original offering and less than the residents were demanding, but the plan is still highly controversial.
SUHEL SETH, Managing Partner, Counselage: You can't rehabilitate people through a movement or a migration from one building to another. You've got to understand culture.
SIMON MARKS: Suhel Seth runs a marketing consultancy in New Delhi. He's one of India's most outspoken economic commentators.
SUHEL SETH: We have a tragic way of dealing with rehabilitation in this country. We believe that we need to take people out from where they are, put them into multistoried buildings, consume that land, and hope that we've succeeded.
The Dharavi issue is not about relocation. It is about avarice. It is not about genuine benevolence. It's about greed. It's all about the land; it's not about the people.
SIMON MARKS: There is an irony in all of this. The very economic boom in India that has led developers to want to get their hands on this land is also creating opportunities for many of the people who live here in Dharavi. And that is making them even more determined to stay here, close to Mumbai's big money, rather than move to a distant, less opportune location.
As India grows, the small-scale entrepreneurialism evident in the heart of the slums is being matched by much larger-scale free-market activities in the city nearby. And that leaves community activists to insist that the people of Dharavi will roll out the welcome mat if high rollers move into their neighborhood, provided the high rollers act the same way in return.
JOHN BAI: They want friendly atmosphere, provided the multimillionaires, they accept us.
SIMON MARKS: John Bai told us that he thinks it will be at least another decade before the rooftop of his Lily Mansion disappears from Mumbai's skyline. The global economic downturn, he says, has made the project much less likely.
But property developers say they plan to break ground in Dharavi within the next few months. And the tendering process is now underway aimed at selecting the contractors who will fire up bulldozers and send them in to change forever a community now known worldwide.