Indian Government's IT Spending to reach $7.8 billion in 2017, says Gartner

Jun 01, 2017

The Indian government‘s IT spending will be around $7.8 billion in the year 2017, says international research firm Gartner. The latest announcement translates into a 7.5 percent increase over the previous year for India’s IT spending. However, this is a revision of Gartner’s earlier projection of 9.5 percent growth for this year.

“The 2% revision in outlook is due to effects of demonetization and drop in industrial production,” said Moutusi Sau, principal research analyst at Gartner. “However, spending plans like affordable housing scheme and increased loans to small and medium enterprises (SMEs) by government are likely to have positive effect on IT spending in next few quarters.”

IT services (including software support, consulting, business process outsourcing, IT outsourcing, hardware support, and implementation) should grow at a rate of 10.8 percent in 2017 in order to reach $2 billion, making this the largest IT-spending category.

The software segment, in turn, includes enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), desktop, infrastructure, vertical specific software and other applications and tools. It is expected that the software segment should grow by 10.8 percent this year in order to reach $1.1 billion. ERP, SCM, and CRM are expected to be the fastest growing of all segments with around 14.5 percent growth projection in this category.

“Initiatives such as Make in India and Digital India need improved government spending on IT-related fields. Providing services online and improving infrastructure for improved broadband connectivity is a must to push India’s economy to high-trajectory growth. There has been massive expansion in the Internet‘s reach, particularly to rural areas and small towns,” said Shashank Dixit, CEO, Deskera, a global cloud-based business software services provider.

Devices, which includes printers, copiers, MFPs, mobile devices, PCs, and tablets, will grow at the rate of 10.4 percent in 2017 in order to reach $1.1 billion. Growth in IT spending signals improvement in India’s IT infrastructure.

The lowered predictions of Indian Government’s IT spending have caught many off-guard and reflect the actual status of growth of IT infrastructure in the past few years. This will have to be accompanied by an increase in technology adoption. With the common man becoming increasingly technology-savvy through Internet access and affordable smartphones, it is imperative to maintain the momentum. Initiatives such as Digital India and Make in India depend on the augmentation of the Information Technology (IT) sector.

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