India's IT sector to touch Rs 1.75 lakh crore by 2016: BCG-CII

India's Information Technology industry is expected to touch the Rs 1.75 lakh crore mark by 2016, helped by rise in IT services and software segments, a report by Boston Consulting Group (BSG) said.

"The domestic IT industry is expected to grow at 12% over next 4 years, reaching a size of Rs 1.75 lakh crore by 2016, driven primarily by the services and software segments," the BCG-CII report added.

According to the BCG-CII report on IT enablement of Indian business, the domestic IT sector was worth Rs 99,700 crore in 2011 with IT services contributing the largest share at Rs 49,400 crore followed by hardware (Rs 32,500 crore) and software services (Rs 17,800 crore).

The report pegs IT services sector to grow at 14% and touch Rs 96,600 crore by 2016 followed by hardware, that is pegged to grow at 6% to Rs 44,400 crore and the software products segment is expected to grow at 14% to Rs 34,400 crore by 2016, it said.

While presenting the report, Microsoft Corporation India Chairman Bhaskar Pramanik said Indian IT industry is expected to touch USD 100 billion in FY 2012-13, which is approximately 7.5% of GDP.

While it will continue to accelerate growth from the global market, there is an opportunity for the IT sector to work closely with the government to kick-start the economy, Pramanik, who is also the Chairman of CII National Committee on IT, ITeS and e-Commerce, added.

Speaking to reporters on the sidelines of the event, Pramanik said the challenges that IT sector will face are those related to looking for growth solutions, which are fast, have a shorter time frame and are financially viable.

On spending, he said more than 50% of the firms have indicated that they will step up their IT spending.

Infosys Co-founder and President Designate CII S Gopalakrishnan stressed on  adoption of IT as a transformation tool to help India leapfrog into higher growth trajectory.