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India's Economic Growth Is Reflected In Smaller Cities

Economists and government officials have long acclaimed India’s so-called second-tier cities as new founts of prosperity and incubators of India’s growing middle class. Now even smaller cities in India’s most prosperous states are booming too.

"Aurangabad, with 1.2 million people and a stable base of automotive assembly plants, factories and agribusiness," is emblematic of experiences across the burgeoning nation. It has attracted the attention of companies selling small appliances, cellphones and economy cars but now companies selling luxury goods are also seeking out these newly flush consumers. A sprawling new mall just opened here, as well as new multiplex theaters and luxury hotels.

"The story of Aurangabad is the story of India," said Debashish Mitra, head of sales and marketing for Mercedes-Benz in India. "There are many cities like Aurangabad, where Indians have money but were not indulging in luxury; they were always in a saving mode. But now that is changing."

Not everyone is cheering Aurangabad's new ostentatious wealth. Sanjeev Unhale, a local antipoverty activist and journalist, said that the money spent for the luxury cars could have gone a long way to help those left behind by Aurangabad's boom. The Marathwada region, of which Aurangabad is the capital, is cursed with perpetual droughts. Cotton farmers often assume huge debts to stay in business. Suicides by debt-ridden farmers are common, Mr. Unhale said.

Full Story: India's Smaller Cities Show Off Growing Wealth

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