Chennai
The Mercer’s 2016 Cost of Living Survey, is used by multinational companies to determine allowances for their expat workers. This survey is based on typical spending patterns representative of expatriates on more than 200 items, ranging from food at home, personal care, electrical appliances and restaurants to clothing and transportation costs representative of expatriate shopping habits.
Ruchika Pal, India Practice Leader, Global Mobility at Mercer, says, “When it comes to the cost of living index perspective, Chennai is only 5% less costly than Delhi. The city has witnessed a spike in house rents, on an average of 13%, over last year.” Members of the expat community in the city say they have felt the pinch of rising costs lately. Satoshi Akimoto, a Japanese national who runs an Asian restaurant in Velachery, said that Chennai is certainly more expensive, when it comes to a lifestyle expats are used to.
“Most expats are used to having alcohol with their meals. But in Chennai, one has to go to a hotel for that, which is more expensive than other cities. When it comes to rents too, most expats prefer living in ECR or other beach-front areas, which have higher rents. This may contribute to why Chennai is more expensive,” he added.
Anita Krishnaswamy, President Global Adjustments, says, “In comparison to major cities in the south of India, Chennai is a coveted destination for the expat community as it has housing options along the beach. The city has to keep up with the increasing demand of high quality life-style which may have led to Chennai becoming more expensive. If this continues, Chennai may lose its edge as an attractive destination.”
Experts believe several factors have contributed to the rising cost of living in Chennai. M Vijayabaskar, Associate Professor, Madras Institute of Development Studies says, “Public transportation is an area of concern.
Large sections of office-goers are used to taking their own cars, two-wheelers or even taxis and autorickshaws to work owing to concerns like last-mile connectivity and comfort. That adds significantly to the cost. Being a hub for healthcare, the city has several major private players operating out of here.
As the quality of services offered by public health services (like government hospitals) lags behind their private counterparts, people are even willing to take loans to be able to afford better healthcare, which again is a cost factor.” “Infrastructure not keeping pace with rate of growth of the city is responsible to a large extent. For instance, a big chunk of households in Chennai rely on canned water for their daily needs. It can cost a family a minimum of Rs 1,000 just for potable water.
As Metro Water connectivity is limited, many households bear this overhead.” Aine Edwards, an Irish entrepreneur living in Chennai, concurred. “Entertainment, dining, clubbing and alcohol are way more expensive in Chennai. In Bengaluru, the taxes are cheaper. So drinking out turns out to be very expensive in Chennai – in fact, more expensive than it is in Ireland! A can of Murphy’s beer costs more than 10 euros here – no way anyone would pay that in Ireland,” she pointed out.
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