Amit: There are number of online advertising options to target local specific audience for lead generation. Assuming your audience is searching for keywords relevant to your product/service, Google Adwords (Search Ads) is surely one of the best approaches. You can use Google Adwords Keywords Planner Tool to verify the number of average monthly searches in a given location.
You should also consider Google Display Ads, wherein you can target even specific websites, which allow Google Adwords. Success of Display Networks is a function of continuous optimization.
If your audience is on Facebook, you should surely leverage Facebook Ads as well.
Also, if cost of your product/service is high, LinkedIn Ads are also worth trying. Remember LinkedIn Ads have a min CPC of US$ 2.
Also, ensure that you drive people to an optimised Landing Page for higher click-> lead conversions.
Hope this gives you some ideas to take care of your lead generation requirement. In case you've any specific query, do let me know.
Btw, on implementation of above (or any other inputs you would have got) approaches, please do come back and share your success/challenges here for benefit of the community and for others to contribute further to your objectives.