Digital India: Gov’t IT spending to touch ‎₹47,000 crore

Article By : Gartner

IT services is expected to grow 8.8% in 2016 to reach ₹10,810.81 crore—with the business process outsourcing sub-segment growing by 22%.

Tech spending in India is about to go up as the government continues its push for a tech-savvy nation. According to research firm Gartner Inc., Indian state and national governments will fork an estimated ₹42,297 crore (USD 7 billion) on IT products and services in 2016.

The amount represents an increase of 3.1 per cent over the past year and will include spending on internal services, software, IT services, data centre, devices and telecom services.

IT services, on the other hand, is forecast to grow by 8.8 per cent in 2016, reaching ₹10,810.81 crore (USD 1.6 billion), with the business process outsourcing (BPO) sub-segment growing by 22 per cent.

Aside from BPO, IT services also include consulting, software support, IT outsourcing, implementation, and hardware support.

Telecom services will be a ₹10,135.14 crore (USD 1.5 billion) market, with the mobile network services sub-segment recording the fastest growth of 3.5 per cent in 2016 to reach ₹5,358.11 crore (USD 793 million).

"Government spending on software will total ₹6,337.84 crore (USD 938 million) in 2016, a 9.9 per cent increase from 2015," said Moutusi Sau principal research analyst at Gartner. "The software market will be led by growth in infrastructure."

Internal services—the salaries and benefits paid to the information services staff—will also grow 5.8 per cent in 2016 to reach ₹10,135.14 crore (USD 1.5 billion).

"The ‘Digital India’ initiative continues to be drive investments in the government, led by access of government services on mobile devices (part of the mobile government), and expansion on broadband services," said Sau.