Bangalore, October 20, 2013 — Key mega projects like the Unique Identification Authority's Aadhar and the proposed government Cloud, Meghraj, will see official IT spending in India reach $6.4 billion in 2013, a 7 percent increase over 2012, predicts Gartner, Inc. This forecast includes spending by state and central government agencies on internal IT (including personnel), hardware, software, external IT services and telecommunications.
“IT services, which includes consulting, implementation, IT outsourcing and business process outsourcing, will be the largest overall spending category throughout 2017 within the government sector, “ said Anurag Gupta, research director at Gartner. “IT services spending is expected to grow 7.7 percent in 2013 to reach $1.4 billion USD in 2013, up from $1.3 billion in 2012 – with the business process outsourcing segment growing by 15.3 percent.”
Internal services will achieve the highest growth rate amongst the spending categories – forecast to be 12.8 percent in 2013. Internal services refer to salaries and benefits paid to the information services staff of an organization. The information services staff includes all company employees that plan, develop, implement and maintain information systems. Software will achieve a growth rate of 10.5 percent in 2013 to reach $709 million USD in 2013, up from $642 million in 2012, led by growth in vertical specific software (software applications that are unique to a vertical industry. These are stand-alone applications that are not modules or extensions of horizontal applications).
Many large ICT companies in India are now increasingly looking inwards and targeting the Indian government ICT market. The ICT industry will benefit from various eGovernment projects, which are part of the National eGovernance Plan, with investments in 31 Mission Mode Projects like UIDAI, which is delivering ‘Aadhaar’ numbers (a target of covering over 600 Million citizens by 2014). UIDAI aims to work with various partners in setting up infrastructure for authenticating and confirming digital identities for several purposes such as for Aadhar enabled payment systems.
“The Indian government is also developing a cloud policy, namely the GI cloud (or Meghraj) which will see more clarity in the near future. Wide proliferation of affordable broadband connectivity (and mobile phones alongside) is expected to provide further opportunities in eGovernance and mobility solutions. Alongside central government projects such as excise, income tax, and post office; other state governments will also undertake initiatives in municipalities, land records and other joint initiatives like digital court rooms and common service centres,” said Gupta.
More on government sector IT spending is available in the Gartner report, Forecast: Enterprise IT Spending for the Government and Education Markets, Worldwide, 2011-2017, 3Q13 Update ( a paid document)