Indian government to spend Rs 368 billion on IT in 2013

BANGALORE, INDIA: The Government of India (GoI) will spend 368 billion rupees on IT products and services in 2013, an increase of 10.5 percent over 2012 revenue of Rs 333 billion, according to Gartner, Inc.

This forecast includes spending by government organizations on internal IT (including personnel), hardware, software, external IT services and telecommunications, said Gartner.

Telecommunications, which includes telecommunications and networking equipment and services, will remain the largest overall spending category throughout the forecast period within the government sector.

"The Indian government is starting to leverage UID identities to authenticate citizens for transferring welfare benefits directly to the recipient's bank accounts, in the form of cash transfers, thereby creating a new system for welfare benefits," said Anurag Gupta, research director at Gartner.

Gupta further added, "India goes to the national polls in 2014, and the GoI will aim to expand the UID operational infrastructure by speed tracking 'financial inclusion', allowing easy access to banking for poor & encouraging micro ATMs. To expand the benefits of IT, GoI aims to invest more than Rs 20,000 crores in expanding broadband penetration," added Gupta.

The electronic chip making project, digitization of academic databases across all educational institutions, vehicle registrations, driving license databases etc will be the major focus areas, said Gupta.

It is expected to grow 6.8 percent in 2013 to reach 118 billion rupees in 2013, up from 111 billion in 2012 - most of this growth will be in enterprise network equipment. Software is achieving the highest growth rate amongst the top level IT spending categories - forecast to be 18 percent in 2013, led by investments in desktop software and infrastructure software.

The IT industry is expected to indirectly benefit from government projects such as the Unique Identification Authority of India (UIDAI), which will create an online database with biometric and identity details of Indian residents, the launch of the National Optical Fibre Network and the computerization of commercial taxes in states.