Projected in innumerable fantasy-packed Indian films as the ultimate 'city of dreams', Mumbai is increasingly falling out of favour with filmmakers.

The home of Hindi film industry or Bollywood is no longer inspiring story-weavers with most using small towns, overseas locales or even the capital city as the backdrop of their fables.

This year's two big Bollywood hits, Rakeysh Omprakash Mehra's "Rang De Basanti" and Kunal Kohli's "Fanaa", were set in Delhi while the fantasy hit flick, Rakesh Roshan's "Krrish", was shot in Singapore.

A major chunk of recent movies by filmmakers like Prakash Jha, Sudhir Mishra, Vishal Bharadwaj, Shaad Ali, Anurag Kashyap and Tigmanshu Dhulia were set in small towns and infused with earthy sensibilities.

The most awaited film of this month, Bharadwaj's "Omkara", has been shot on locations in Lucknow and Allahabad. The central setting of the film is a township in Uttar Pradesh.

"Filmmakers hailing from the so-called cow-belt of India are more in touch with the dynamics of small towns. They provide audiences with an alternative to the woolly-headed reveries of designer flicks. No wonder the centre of the brave, bold and new Bollywood has shifted," say industry watchers.

On the other hand, the teeming metropolis that was once the preferred setting for escapists, uplift of Hindi films is now inspiring movies closer to real life. The days of the extended joint family designer flicks seem to be over. Mumbai cinema is getting real.

Filmmakers like Madhur Bhandarkar and Ram Gopal Varma who are inspired by their immediate surroundings come out with films that provide an alternative to the mush and mayhem of conventional Mumbai cinema.

In "Page 3", Bhandarkar portrayed the hollow core of high life. A small-budget venture, it became a huge multiplex hit. In his latest offering, "Corporate", he has tried to unmask the murky side of big corporate houses.

Bhandarkar's next venture is "Signal" based on the life of people living on the streets of Mumbai. According to him, an entire industry has sprung around traffic signals in the city and the film will try to capture that.

"People love to see their own problems being dealt with on screen. They love issues that they can relate to," says Bhandarkar.

"We are passing through a transition in society, which is why such films are being made," says Basu, whose earlier film "Gangster" was much appreciated.

Basu's forthcoming "Metro" is about urban stress and ambitions that take the joy out of living. Similarly, Mahesh Manjrekar's "Big Bazaar" is based on the impact of malls on small-time traders.

Putting Delhi in the spotlight in the days ahead will be Mehra who will soon return to the city he grew up in to shoot "Delhi 6", produced by UTV Motion Pictures and featuring Abhishek Bachchan.

According to reports, "Delhi 6", will draw elements from the filmmaker's real-life experiences.

In addition, reports say a Chennai-based production company is producing a film titled "Delhi Heights" with debutant Anand Kumar at the helm and Adman Balakrishnan's film, "Cheeni Kum," starring Amitabh Bachchan and Tabu as an unusual pair will be based in Delhi too. Clearly, Mumbai's loss will be Delhi's gain.

Mumbai is fast loosing its dominance over Bollywood, the unique form of escapist cinema it brought forth.

Cities both within India and abroad are upstaging Mumbai by offering better film production facilities, higher returns to investment and political patronage. So much so that the British government has announced its intention to promote, produce and distribute made-in-London Bollywood films.

Now a Bollywood film distribution company Eros International, which reportedly raised Rs.1.89 billion through equity placement in Britain, has listed its shares on the London Stock Exchange (LSE).

Welcoming Eros International, Martin Graham, head of AIM, LSE's global market for innovative and growing companies, said: "The Indian film industry is one of the country's most high profile and successful export sectors and Eros International is a key conduit through which its massive output can reach a wider global audience."