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Government of India’s IT spending to increase 9.4% in 2021, report says




NEW DELHI: The Indian government’s IT spending is expected to grow 9.4% year-over-year (year-over-year) to $ 7.3 billion in 2021, Gartner Inc said in its latest forecast for India.

The increase in spending will be driven by various digital initiatives in India, including the very first digital census ever scheduled for this year. During the presentation of the Union budget for 2021-2022, the Minister of Finance Nirmala Sitharaman announced an allocation of Rs3,768 crore for the digital census.

Read also | India Inc prepares to return to the office

Gartner forecast that government spending on software, which includes industry-specific applications, infrastructure and software, is expected to grow at an even higher rate of 13.4 percent per year. Spending on devices will increase 11.8%, followed by IT services, which is expected to increase 11.2%. Spending on data centers, telecom services and internal services will see single-digit growth, with an expected year-over-year increase of 7.8%, 6.3% and 5.7%, respectively.

Due to the covid-19 epidemic, Indian governments’ digital transformation plans were ruled out in 2020. The government will shift from prudent spending to opening the tax floodgates in 2021, “said Apeksha Kaushik, analyst senior researcher at Gartner.

Wider adoption of artificial intelligence (AI), cloud services and blockchain will be the main focus areas of the Indian government in 2021.

Kaushik points out that the weakening economy has forced the Indian government to cut IT spending across all segments. “

Government IT spending in 2020 declined across all segments. For example, spending on devices fell 20.1%, internal services fell 10.9%, data centers fell 10%. Overall, government IT spending in 2020 fell 9.9%.

Compared with India, global IT spending by other governments in 2021 is expected to grow 5.1% annually to a total of $ 482.8 million. Globally, spending on software services is expected to grow 9.2%, while investment in other verticals hovers around 5%. The only exception is internal services, which are expected to decline by 2.4%.

The pandemic has exposed weaknesses in the ability of government organizations to respond quickly, scale and secure essential services, ”said Irma Fabular, senior research director at Gartner.

Fabular emphasizes that governments are innovating at a faster pace by adopting commercially available technology solutions for operational and mission critical needs.

According to NASSCOM estimates, India’s IT sector is expected to post 2.3% revenue growth to reach $ 194 billion in FY21.

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