India, Feb. 8 -- History bears testament to company towns that have failed to catch up with changing economic winds. In Bihar's Saran District, the quiet chimneys of C&E Morton India Limited confectionery factories and sugar and distillery mills at Marhowra paint a grim picture. Karnataka's now exhausted Kolar Gold Fields (KGF), the first Indian city to be electrified in 1902 and once called mini-England, is now home to mounds of toxic residue locally termed as cyanide hills.

While the causes of their obsolescence vary, the impact of industrial decay on both these company towns is rather similar. Industries become stranded assets when their licence to operate is revoked and their business formally terminated, either due to market forces ...