MUMBAI (Reuters) - With one of Asia's largest slums, congested streets and sometimes startling whiffs of human waste, Mumbai may not be everyone's first choice for a world-class financial centre.
Yet that is exactly what India hopes it will become in the next decade as it rises to the challenge of financing one of the world's fastest growing major economies after China.
"I think we are where China was with a lag of maybe 10 years," K.V. Kamath, chief executive of ICICI Bank, India's largest private bank, told a conference recently.
"That is the catch-up time that we need to build various structures whether they are financial or whether they are real ... to provide the sort of momentum that we need."
Formerly known as Bombay, Mumbai is a bustling port on India's west coast. Home to 17 million people, it is already a base for two stock markets, their watchdog and the central bank.
The city which overlooks the Arabian Sea is the face of old and new India: bullock carts toil alongside shiny sedans, shanties slope from walls near glazed offices, and sea vistas take your breath away with the low-tide stench of sewage.
But India's central government envisages a time when Mumbai will be a gleaming financial hub not too far removed from London, Dubai and Singapore.
To this end it has appointed a panel to study ways of turning Mumbai into the sort of place where a high-rolling banker might want to live.
Democratic government, a vast and growing economy, a large English-speaking workforce and a time zone overlapping Asia and Europe all work in the city's favor, although markets need to be liberalized and the financial and legal system must improve.
But financial reforms are nothing compared to the Herculean task of revamping Mumbai's infrastructure and housing, an initiative that will probably cost tens of billions of dollars.
With its pockets of faded British colonial grandeur, Mumbai is beset by infrastructure problems: debilitating traffic, a lack of housing, poor water delivery, with some homes served simply by water trucks, and an unreliable power system that results in routine power cuts in the suburbs.
Even the geography of the city, a series of islands joined by reclamation, works against it. Space is at a premium and the city is getting increasingly cramped as an estimated 300 poor families arrive each day in search of work.
The city's infrastructure is rusty and overloaded. Six million people a day cram into -- or on top of -- its battered commuter trains.
Efforts are underway to modernize the infrastructure, but observers say the massive sums of money involved are just a drop in the ocean.
The Municipal Corporation of Greater Mumbai has budgeted 18 billion rupees ($450 million) to upgrade roads and bridges and 29 billion rupees to improve water supply this fiscal year.
"Our journey on urban investment is just beginning," Ramesh Ramanathan, founder of the group Janaagraha, which pushes for civic reform, told a conference recently.
"These numbers are insignificant ... compared to the true amount of money that will have to be invested in infrastructure over the next 15 to 20 years," he said.
Officials are tackling some issues: corporation figures show 19 billion rupees allocated to widen century-old storm drains after about 1,000 people died in severe monsoon floods in 2005.
Sanjay Ubale, secretary of special projects for the state of Maharashtra, of which Mumbai is the capital, says 250 new trains are on the way.
Last year, a law that controlled urban land holdings was scrapped, potentially freeing large areas for development.
High-rises increasingly dot the skyline and a second international airport is planned for the city's outskirts.
Further progress is hampered by miles of red tape and the housing shortage is not helped by a 1947 rent control act, that keeps rents for long-time tenants far below modern-day market rates and makes it difficult to get people out.
So while a well-to-do family may live in a three-bedroom apartment in a choice part of town for just 250 rupees ($6.25) a month, newcomers are likely to pay 800 times that sum at $5,000 or more -- similar to rentals in London or New York.
"Mumbai has been plagued by draconian urban regulations for the past 50 years," said Alain Bertrand, an urban development expert who previously worked for the World Bank. "(We must) find an equitable solution to get out of rent control."
For the less well-off, there are plans to tear down one particular shantytown, Dharavi, a thriving slum considered to be one of Asia's largest, and resettle families in high-rises. Many slum residents are opposed as they fear losing their livelihood.
"It's impossible to arrive in Mumbai and offer any solutions because everything is paled by the complexities of the problem," Ramanathan said.
Authorities aim to attract $39 billion in private investment and Ubale says firms are interested in bidding for projects such as a light rail system in the north of the city.
But implementation is fraught with problems. Bureaucracy, land acquisition and perhaps most importantly finding a fair solution to rehouse displaced people, estimated at 57,000 in the case of Dharavi alone, are a few of the obstacles.
"It's not just a question of funding, but of executing projects on time and maintaining them properly," federal Urban Development Minister S. Jaipal Reddy said.
Despite all the challenges ahead, ICICI's Kamath is upbeat on Mumbai's progress towards becoming a world-class centre.
"It may not happen tomorrow, but it is inevitable," he said.
Editing by Charlotte Cooper, Mark Williams and Megan Goldin