Zoho's Rs 50,000 crore founder has a unique solution to India's traffic problems, suggests 'optimal city size'

Zoho Corporation's co-founder, Sridhar Vembu, has recently suggested an unconventional solution to address India’s worsening traffic congestion. Sharing his thoughts on X, Vembu argued that a complete overhaul of how cities operate is needed—specifically through massive investments in public transportation systems. According to him, without such sweeping changes, the functionality of India’s urban centers will continue to deteriorate under the weight of traffic and population density.

The Mathematics of Urban Infrastructure

Vembu explored the mathematical challenges behind large-scale city planning. He stated that the amount of money needed per person to sustain public infrastructure doesn’t increase linearly with population—it grows disproportionately. As a result, when a city becomes excessively populated, the required spending on infrastructure skyrockets, making these cities economically unsustainable in the long run. Much of the additional income generated by larger metropolitan areas is ultimately funneled back into building and maintaining advanced transit systems, thereby inflating living expenses and affecting residents' quality of life.

Population Density and Its Consequences

He emphasized that densely packed urban areas come with hidden social and economic costs. As cities grow larger, not only do they demand more sophisticated and costly infrastructure, but they also face a spike in living costs. This upward pressure on expenses, when combined with limited space and reduced affordability, discourages family growth. Vembu pointed to Japan as an example, where Tokyo’s enormous population of 34 million resulted in a national debt surge and a significant demographic decline. Despite Japan’s relentless pursuit of infrastructural excellence, it still suffered from diminishing birth rates and long-term economic strain.

On our big city traffic woes. Extraordinary investment in public transport is required to make our cities work.

That brings up a fundamental issue: I believe the investment required *per capita* to support high density scales with the population (that leads to total investment… https://t.co/PCa1RZiizd

— Sridhar Vembu (@svembu) July 5, 2025

A Case for Smaller Cities

According to Vembu, cities with populations between 100,000 and 250,000 offer the most sustainable model. Though these are typically labeled as “towns,” they strike a balance between the advantages of urban development and manageable infrastructure costs. These mid-sized cities enable the formation of tight-knit communities while avoiding the overwhelming expenses tied to megacity upkeep. They allow for innovation, job creation, and connectivity without the burden of excessive traffic or inflated living standards.

"There is a size of city that is "optimal" in that sense, and that is probably about 100K to 250K people (yes, we think of them as "towns"!). At that size, you get the clustering benefits of urbanization without the extraordinary infrastructure tax," he argued.

Why Zoho Builds Outside Major Cities

Vembu’s philosophy explains why Zoho’s offices are strategically placed in smaller towns rather than sprawling metropolises. He believes that smaller cities not only provide a better quality of life for employees but also help in redistributing economic growth more evenly across the country. With a reported net worth of ₹50,000 crore ($5.85 billion) in 2024, the Padma Shri awardee continues to influence tech and infrastructure discourse by advocating for decentralized urban development.