"I am right now doing the organisation-related work before I start actual filming in April next year, " Kapur told IANS on the sidelines of a Confederation of Indian Industry (CII) summit in the capital Tuesday.
"Paani", based on water wars, will be produced by Danny Boyle of "Slumdog Millionaire" fame. Its music will be composed by A.R. Rahman.
The project was formally announced at the 63rd Cannes Film Festival in 2010.
Filmmakers tend to misread audience
Shekhar Kapur feels that Indian filmmakers tend to misjudge the audience and this eventually leads to compromising on the content of the films.
"The filmmakers don't have faith in the audience, there is a mistrust between both sides. There is a coalition of people saying 'how much money the film will make' and 'let's introduce an item number otherwise people will not go and watch the film'. But it's not like that, and this thinking has a huge impact, " Kapur said at CII Media and Entertainment Summit 2012.
The filmmaker, who is known for making films like "Masoom", "Mr India" and "Bandit Queen", feels that the Indian film industry is not growing, rather it's contracting.
"We say that it (films) is the medium of masses but it is actually now a medium of the elite, due to multiplexes. I think we are dismantling the audience that we have, " said the 66-year-old.
The filmmaker feels Indian cinema is behind Hollywood, only because of the lack of technology.
"We keep comparing our film to Hollywood movies. It is not that we don't make great films or don't tell great stories. We lack in technology, in production design, which is not considered important here, " Kapur said.
"We need to merge with the world to compete with them and not isolate ourself from the world. We have to improve our infrastructure, " he added.
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