Mumbai, Jan 4 (IANS): The Maharashtra government Tuesday paved the way for a massive development of central Mumbai's Dharavi, Asia's largest slum, made famous by the Oscar Award winning film "Slumdog Millionaire" and Gregory David Roberts novel "Shantaram."

Announcing amendments to the state's Development Control Rules (DCR), making the project a time-bound possibility, Chief Minister Prithviraj Chavan said a 10-year corpus fund would be created for developing Sector 5 in Dharavi, which is mainly owned by the government.

He said the state's apex housing body, Maharashtra Housing and Area Development Authority (MHADA) will be the nodal agency to re-develop it systematically, within seven years.

The congested shanties and dilapidated tenements in Dharavi - which houses nearly 1.20 million dwellers in more than 100,000 dwellings according to the National Slumdwellers' Federation of India secretary M.G. Shekhar -- would be re-developed as clusters of 300 square feet carpet area each.

He said that the state government had given the go-ahead for the Dharavi re-development project - spread across 535 hectares - but it did not register any significant progress.

"We have now given a boost for the project. It is poised to change the face of Dharavi," Chavan said.

Chavan's announcement came barely an hour before the State Election Commissioner Neela Satyanarayan declared the schedule for polls to 10 municipal corporations, including Mumbai, Feb 16 and 27 Zilla Parishads Feb 7.

The mega project would also include development of roads, toilets, gardens and playgrounds.

The original re-development of Dharavi, approved in 2004, aimed at benefitting around 60,000 families living there. But now, along with the families all existing small businesses shall also be protected.

Now, the state plans to invite competitive bids for the re-development proposal.

Chavan said that one of the hitches to re-development was that nearly 20 percent of Dharavi land was owned privately.

"Urban experts and NGOs suggested options of permitting self-development jointly by the land-owners and the residents/tenants. We shall look into this," Chavan said.

Dharavi is located strategically, flanked by the posh Bandra-Kurla Complex, which houses top business centres and the US consulate and British Deputy High Commission on the north, and newly-developed prime areas of Wadala to the east, and mega-commercial and residential areas in south and west.

Boasting of a thriving mini-economy with many small scale industries, it is also one of the most crime-prone areas of Mumbai, termed as the "city underbelly" by Roberts.