@TSIVipul,
like you say, we engineers are awesome :-)
Firstly, torque and power are two different things. Torque is twisting force that is applied to turn the wheels. More torque is equal to greater pickup. Torque is usually applicable to move objects from a standstill.
Power is the effort put in to maintain motion. This is usually meant for moving objects
That's why the diesel engines quote lower peak power figures but are great fun to drive around in the cities.
Anyway, if you take a 4 cylinder engine and convert it to a 3 cylinder engine, the torque will be less. So if you take a 1.2L 4 cyl engine (300cc/cyl) and convert it to a 3Cyl engine i.e. 900cc, its going to have a lower torque on account of lower displacement. There is no real replacement to displacement. So, how do manufacturers manage to make usable 3 cylinder engines? Well, its a compromise. For IC engines, the torque and speed are usually inversely proportional. So max torque is produced at low revs and vice versa. However, engineers can play with the bore and stroke length of the piston to modify this characteristics. So if you increase stroke at the expense of bore, the torque will increase but the moving mass now travels more, so engine becomes more vibrational and max rpm gets restricted. But if they increase the bore, moving mass reduces and engine speed increases but torque reduces. So, to produce torquey engines for city driving where top speed is not so much of a concern, usually stroke length is increased making the engine vibe happy. However, there is a limit to how much they can increase the stroke before the torque starts reducing again- lower piston face area is equal to lower pressure bearing area for combustion is equal to lower torque. Engineers work to build a compromise between the two. That's why all these smaller engines are low in torque than the 3 cylinder ones. Another point- in a 3 cylinder engine, the torque is applied to the crank at three points in its rotation- at 0 Deg, 120 Deg and 240 Deg. For a 4 cylinder engine, it is applied at 0, 90, 180 and 270 Deg. SO the average torque is also more in the case of a 4cyl engine
Now, there is a way around this- engines are rated by displacement, not by the amount of working fluid (meaning fuel air mix or charge) the cylinder can accommodate. So, if you compress the charge, you can put in more fuel into a smaller cylinder to produce the same power out of a smaller displacement engine- this is turbocharging or supercharging (depending on which engine and how it is implemented). The catch is, if you turbocharge (i.e. use a turbine on the exhaust gas side to drive a compressor which pumps in the charge into the cylinder), the engine gains power with rpm. So at lower engine rpm and driving speeds, when torque is required rather than speed, the exhaust gas pressure is low and turbo is not turning at sufficient speed turbocharger may not produce enough pressure to produce the required torque where as higher RPMs, the turbo can produce more pressure on the charge. It can also be the other way around. It all depends on the turbo design but usually, turbo design is a compromise between low engine rpm performance and high engine rpm performance. Alternative to this is to go for twin turbos, one for low and one for high engine rpm operation like is done on the TUV's engine. This compromise is also the reason for the turbo lag that most older diesel engines and some modern engines too are known to suffer from.
The trend to use smaller blocks and turbos started in Formula1. In order to control costs, they have come down from 3.6L engines to 3L engines to 2.6L V6 engines to 2.4L V6 engines over the years. Whereas, track speeds are only increasing. It means, if we engineers are presented with a challenge, we just think harder and move forward. The merits of that technology and research put into develop it is now filtering into road cars
Coming back to the Baleno issue, I believe, the turbo Boosterjet engine will definitely be a well tested one because as a concept, this sort of thing is not new. However, expect that engine to behave very differently from the current K12 engine. At the least, that engine will be more noisy and less torquey then the k12
Ameyam