Rise in IT spending to benefit industry

Buoyed by the expected rise in IT spending by companies across sectors in Gujarat, the state's IT industry expects better days ahead. With better growth rate being posted in sectors like telecom, BFSI, etc., these firms are increasingly looking at increasing their budget for in-house IT products and services thereby pushing demand for the industry.

What's more, according to industry sources, the rise in IT spending will continue for next 3-6 months. "While everyone had been struggling with the downturn in the country, many of the firms in Gujarat are now looking at opportunities to grow in both domestic as well as global market. Hence, they have realised the importance of technological advancement and the need for development in their IT infrastructure and began spending a lot on the same," said Nirav Shah, director of Jayatma Informatics Private Limited and former president of Gujarat Electronics and Software Industries Association (GESIA). Industry sources cite desire to be in global trade as well as increased IT awareness among firms, especially SMEs, as the reason for the rise in their spending on IT.

"Earlier, less creative work used to happen in Gujarat. But now, with the awareness increasing among them, more and more companies, especially SMEs are talking about things like ERP, SAP, software upgradation and international standards. With an increased desire to be in the global trade and match their products with international standards, several of them have increased their spending on IT," said KJ Thakkar, president, Ahmedabad Computer Manufacturers' Association (ACMA).

According to Thakkar, "As against a typical spent of 2-3 per cent, IT budgets are set to increase to 15-20 per cent in next few months."

Not only is the PC and laptop penetration increasing within companies, but the state is also witnessing an increase in number of manufacturing plants being set up, thereby pushing the need for IT infrastructure, added Thakkar.

Moreover, according to industry sources, most of the SMEs in Gujarat are traditional family businesses, but now increasingly they are finding the need for standardisation which has made them increase their spending on IT.

Apparently, almost 50 per cent of the monthly Rs 100 crore turnover of ACMA comes from SMEs, added Thakkar.