Gartner says Indian government IT spending will increase 8.9 percent in 2018 due to digital India initiatives

Via Gartner Newsroom

Nov 15, 2017

GOA, India, November 15, 2017

Analysts Provide the Latest IT Trends and Spending Outlook for Government Sector in India during Gartner Symposium/ITxpo 2017, November 13-16, in Goa

IT spending in the Indian government sector is projected to reach $8.5 billion in 2018, an increase of 8.9 percent from 2017 estimated spending of $7.8 billion, according to the latest forecast by Gartner Inc.

Software and IT services continue to exhibit strong growth with device spending continuing to drive the majority of the overall IT spending in the Indian government sector. Software spending is projected to growth 15.6 percent in 2017, and will grow another 15.1 percent in 2018 to reach $1.2 billion (see Table 1). IT services spending is on pace to grow 15.3 percent in 2017 to total $2 billion in 2017, and increase 13.8 percent in 2018 to reach $2.3 billion.

“Spending on devices, which includes printers/copiers/MFPs, mobile devices, PCs and tablets, is estimated to see the highest growth in 2017, with an increase in spending by nearly 21 percent to reach $1 billion,” said Moutusi Sau, principal research analyst at Gartner. “This will further increase by another 9.4 percent to reach $1.1 billion in 2018.”

Table 1. Government Sector IT Spending Forecast, India, (Millions of U.S. Dollars)

2017 Spending 2017 Growth (%) 2018 Spending 2018 Growth (%)
Data Center Systems 504 5.4 521 3.3
Devices 1,026 20.8 1,122 9.4
Internal Services 1,558 6.1 1,661 6.6
IT Services 1,986 15.3 2,261 13.8
Software 1,004 15.6 1,156 15.1
Telecom Services 1,762 7 1,818 3.1
Overall 7,840 11.4 8,537 8.9

Source: Gartner (October 2017)

“The Indian government sector is picking up pace again after the brief slowdown in the past two quarters due to effects reverberated by demonetization and a drop in industrial production,” said Ganesh Ramamoorthy, managing vice president at Gartner India.

Several initiatives by the government, such as the Make in India, Start-up India, Skill India, and the corresponding policy frameworks to support these initiatives, such as the new electronics policy, software product policy, data security and protection policy, will have a positive effect on government IT spending in the near future. However, the chief among all these initiatives is the Digital India programme.

“The Digital India programme, which aims to transform the country into a digitally-empowered society and knowledge economy, will call for technology investments in the backbone infrastructure, advanced data analytics, digital security, digital payment and e-commerce infrastructures, digitally-enabled G2G, G2B and G2C services, and score of other related services,” said Mr. Ramamoorthy. “This will be the key driver for IT spending growth in the Indian government sector over the next five years.”

Digital government relies on the use and reuse of data and analytics to simplify transactions for end users. It creates information from data to support and enhance decision making, and it fosters the creation of new, collaborative and disruptive service delivery models. In the process, underlying service models are re-engineered to improve mission effectiveness and to achieve long-range cost savings through optimized outcomes.

To be successful, Indian government’s digital strategy must address a variety of issues.

“While focusing on citizen services is an essential element of the digital strategy, the main and more sustainable benefits will come to the government from the transformation of its internal data and processes,” said Ms. Sau.

Therefore, establishing a sustainable collaboration among stakeholders in different domains and tiers; adopting more flexible funding, agile procurement and project management processes; improving IT workforce skills and management practices; and securing the technologies and/or services needed to support the digitalization of government business functions, will all be very essential for the Digital India programme to succeed.

Further information on government sector IT spending is available in the Gartner report, Forecast: Enterprise IT Spending for the Government and Education Markets, Worldwide, 2015-2021, 3Q17 Update. The forecasts provide total enterprise IT spending, including internal spending and multiple lines of detail for spending on hardware, software, IT services, and telecommunications for vertical industries and 43 countries within seven geographies.

Upcoming dates and locations for Gartner Symposium/ITxpo include:

March 5-7, Dubai, United Arab Emirates

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