Why Bengaluru land prices rival NYC? Sridhar Vembu explains
What's the story
Sridhar Vembu, the Founder and Chief Scientist of Zoho Corporation, has blamed rampant corruption for the skyrocketing land prices in Indian cities like Chennai and Bengaluru. He drew a stark comparison between these cities and New York City, despite India's much lower per capita income. In a post on X, Vembu highlighted that the ratio of land price to per capita GDP in India is possibly among the highest globally.
Corruption's role
Political corruption money is parked in real estate: Vembu
Vembu emphasized that a major contributor to the high land prices is political corruption money being funneled into real estate. "First, vast sums of political corruption money is parked in real estate. This raises the real estate prices and high real estate prices affect everything downstream," he wrote on X.
Economic impact
Corruption impact on housing, education, and healthcare costs
Vembu also highlighted that corruption in building approvals and related processes drives up construction costs. These inflated real estate and construction costs eventually lead to higher expenses for households. He further claimed that corruption associated with regulatory compliance in private schools and hospitals also adds to the rising education and healthcare costs, making life more expensive for families.
Social impact
Delayed marriages and fewer children
The Zoho founder noted that rising costs due to corruption have broader social implications. He said many young people are now delaying marriage, having children later in life or even opting for fewer kids due to the rising cost of living. Vembu cited Tamil Nadu as an example where the birth rate is now well below replacement level, attributing it partly to corruption-driven increases in living costs.