Followed the steps given on the official google app engine page for installing the sdk for php->
https://developers.google.com/appengine/docs/php/gettingstarted/hell
UPDATE: On linux use sudo apt-get install php-cgi dev_appserver.py --php_executable_path=/usr/bin/php-cgi app.yaml
sudo apt-get install php-cgi dev_appserver.py --php_executable_path=/usr/bin/php-cgi app.yaml