Daijiworld Media Network - Chennai
Chennai, Jun 28: Zoho founder Sridhar Vembu on Sunday said political corruption is a major factor behind rising real estate prices in India, which in turn is increasing the cost of living and contributing to declining birth rates, especially in highly urbanised states like Tamil Nadu.
Vembu said land prices in cities such as Chennai and Bengaluru have reached levels comparable to global cities like New York despite India’s much lower per capita income.
“The cost of land in our urban areas is far higher than what our GDP per capita would dictate. The ratio of land value to per capita GDP is probably higher in India than anywhere else,” he said in a post on social media platform X.
Explaining the reasons behind the trend, Vembu said large amounts of corruption-linked money are being invested in real estate, pushing up property prices and affecting the overall 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,” he said.
He also pointed to corruption in building approvals and regulatory processes, saying such practices increase construction costs in addition to already high land prices.
“Corruption in building approvals and the like raises construction costs, on top of already higher real estate costs,” he said.
According to Vembu, the impact of corruption extends to sectors including education, healthcare and household expenses.
He said corruption in regulatory enforcement for private schools contributes to higher fees, while similar issues in the healthcare sector increase medical costs.
“Corruption in private school regulatory compliance enforcement raises school fees. Corruption in private hospital regulatory compliance enforcement raises healthcare costs,” he said.
Vembu added that retailers also face higher rents due to expensive real estate and construction costs, ultimately increasing the prices of household goods.
He linked the rising financial burden to changing social trends, saying young people are delaying marriage and having fewer children due to increasing expenses.
“As a direct consequence, the economic burden on the average person gets worse. Young people, facing all these costs, postpone marriage, and postpone children or have fewer children,” he said.
He said this directly affects demographic trends.
While acknowledging that the issue exists across India, Vembu said Tamil Nadu, one of the country’s most urbanised states, has been particularly affected.
Calling corruption an “existential threat to our society,” he said rising living costs due to corruption are among the major reasons behind Tamil Nadu’s birth rate falling below replacement levels.
“If you worry about the super-low birth rate in Tamil Nadu, way below replacement, understand that corruption raising our cost of living is one of the major causes, not the only cause, but a big one in our context,” Vembu said.