Indian government to spend $7 bn on IT in 2016: Gartner

Includes expenditure by Centre and states; it's a 3% increase over last year

Indian governments are likely to spend about $7 billion (Rs 47,117 crore) for buying Information Technology (IT) products and services in 2016, a 3.1 per cent increase over the previous year, said a new report by research firm Gartner on Thursday.  This will include spending by state governments as well as the central government on IT services, software, data centres, devices, telecom service and internal services, which essentially refers to salaries and benefits paid to the information services staff of an organisation.

IT services, which entails consulting, software support, business process outsourcing, IT outsourcing, implementation, and hardware support, is projected to grow 8.8 per cent in 2016 to reach $1.6 billion. While telecom services will cross $1.5 billion this year, with the mobile network services sub-segment recording the fastest growth of 3.5 per cent to reach $793 million. The government will spend $938 million on software, about 10 per cent more than what it spent last year. Internal services are also expected to grow 5.8 per cent in 2016 to reach $1.5 billion.

Driven by the Digital India initiative, government spending on IT has been increasing since last couple of years.

“The Digital India initiative continues to 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 Moutusi Sau, principal research analyst at Gartner.

Digital India is an umbrella programme that seeks to give access to internet to every Indian. It focuses on building digital infrastructure, providing government service on the web and mobile platforms to digitally empower citizens, with an estimated investment of Rs 1.13 lakh crore over the next three to five years. With the initiative, Prime Minister Narendra Modi plans to expand internet connectivity to rural areas and provide government services online in addition to boosting manufacturing of electronic goods in the country.
KEY TAKEAWAYS

• IT services projected to grow 8.8 per cent in 2016 to reach $1.6 billion
   
• Telecom services will cross $1.5 bn this year, with the mobile network services sub-segment recording the fastest growth of 3.5 per cent to reach $793 mn
   
• Government will spend $938 million on software, about 10 per cent more than what it spent the previous year
   
• Internal services are also expected to grow 5.8 per cent in 2016 to reach $1.5 billion