I voted, "I'm not sure". This is because on one hand, the introduction of smaller and cheaper cars will result in a lot of people finally having personal means of mobility and freedom from the monopoly of the taxi and auto-rickshaw drivers. Comfort, convenience and safety during travel is something that everyone needs and deserves. Fuel-efficient, light small cars are certainly the way to go if the rising population is considered. Smaller cars are easier to drive, park, repair and consume considerably less fuel too.
However, on the other hand, this can prove to be a bane for Indian traffic. You see, we already bang our heads on the windscreens of our cars when we're stuck in the weakest of traffic jams, and with more and more cars rolling down the road, traffic rates are bound to increase and the day won't be far when we might have to witness the same 10 day traffic block-out seen in China recently. Quite frankly, our car industry is growing quicker than our basic infrastructure can develop. We can stretch our supply and demand, but one thing we can't control is NATURE. We don't have proper roads, safety measures in vulnerable places like highways are negligible and people are least bothered to adhere to traffic rules. Secondly, with more and more newbies (who assumably haven't driven ever before) taking to the wheel, more and more accidents will take place.
Thirdly, the incessant flow of new cars on the road will ultimately result in a drastic rise in pollution levels (which are already higher than they're supposed to be), more so in major cities. Fuel consumption will too go up and with unthinkable and ridiculously high demand, prices of fuels will shoot up too.
All these factors are serious enough to be taken into consideration and as I am still not sure if the pros outweigh the cons or vice versa, I have voted "I AM NOT SURE".