Sridhar Vembu on why Chennai and Bengaluru land prices rival New York

Zoho founder and chief scientist Sridhar Vembu has attributed the high cost of land in Indian cities such as Chennai and Bengaluru to corruption, arguing that property prices in these cities have reached levels comparable to those in New York despite India's significantly lower per capita income.

In a post on X, Vembu said the ratio of land value to per capita GDP in India is likely among the highest in the world. He noted that land prices in Chennai and Bengaluru rival those in New York, even though the US city has a much higher per capita GDP.

According to Vembu, one of the main reasons is that large amounts of political corruption money are parked in real estate, pushing up property prices. He said elevated land prices then affect multiple sectors of the economy.


"First, vast sums of political corruption money is parked in real estate. This raises real estate prices and high real estate prices affect everything downstream," Vembu wrote.


He further argued that corruption in building approvals and related processes increases construction costs. Higher real estate and construction costs eventually translate into higher expenses for households.

Vembu also claimed that corruption linked to regulatory compliance in private schools and hospitals contributes to rising education and healthcare costs. In addition, retailers are forced to pay higher rents because of expensive land and construction, increasing the cost of household goods.

As a result, housing, education, healthcare and consumer goods become more expensive, placing a greater financial burden on families.

The Zoho founder said these rising costs have broader social consequences. According to him, many young people delay marriage and postpone having children, or choose to have fewer children because of the increasing cost of living.

Vembu pointed to Tamil Nadu, one of India's most urbanised states, as an example. He said the state's birth rate is now well below the replacement level and argued that corruption-driven increases in living costs are among the major reasons behind the trend.

"Corruption is becoming an existential threat to our society," he wrote, adding that while corruption is not the only factor affecting demographics, it is a significant contributor in the Indian context.