Tata's are a VERY successful business group. There automotive division has proved it's reliability in the Indian market for long. They are just about sound to take on new challenges. They know the shit they are making and how to position it. The Car can carry the load of an A/C along with the passengers, and that's enough assessment of a 'cheap' engine I presume. It's always a joy to see such incremental jumps in technology, whether it works or not is an entirely different question. You don't think they are using the technology used 20yrs back to make the the heavy fuel guzzling cars, do you?? lol.
Just because a cheap car appears people aren't going to jump into purchasing it.. there are a bazillion other factors (Time it takes to take the Road, Parking space, Fuel costs, need!)
All and all nothing BIG changes; atleast the pollution, the car denisty doesn't change an iota;
Take my word on it, I have spent my life here in India -- except that the Tata's may prove there mettle in the Auto segment... or it might just go down as an experiment.
No one is jumping into getting this car just because it's cheap. The price difference between the next priced car and this one isn't too much either!
It's just a big market people!!! Toyota, Ford, Honda, Skoda -- all are there on the roads... and in huge numbers. You talk about vehicle density and shit... huh!
You seem presumably afraid of a developing nation suddenly "getting it"! That's not cool man!