IT Offtake All Set For Take-off: India To Up Spends By 24%

New Delhi: | Updated: Dec 23 2002, 05:30am hrs
IT spending in India, which includes spending on hardware, software and imports, is likely to rise by 24 per cent to $15.5 billion in this fiscal ending March 2003 from $12.5 billion in last fiscal, according to the National Association of Software Services Companies (Nasscom).

The government sector is spending heavily this year on IT compared to previous years, Nasscom vice president Sunil Mehta said.

The other strong IT spenders include sectors like the banks, finance services and insurance (BFSI) and telecommunication. BFSI, telecom and the government contribute over 55 per cent to the total IT spending in the country.

The other sectors like the retail and utilities have also become active but they still do not contribute significantly to the total IT spending in the country, Mr Mehta said.

Over 55 per cent of the total IT spending goes into services and personal computers (PCs) in the country.

According to industry estimates, servers/workstations account for 8 per cent, peripherals account for 10 per cent while packaged software, networking and training/education account for over 7 per cent, each, of the total IT spending.

Among other states, Andhra Pradesh, Kerala, Maharashtra and Punjab are the highest spenders on IT.

On the global front, more and more IT spending will take place on the offshore activities of companies, according to a survey. A Nasscom study shows that over one in four global giants outsource their software requirements to the Indian companies.

Outsourcing activities have received a tremendous boost in the last couple of years and will drive more global companies to allocate their funds for basing these activities in India, Mr Mehta said.

A survey by Merill Lynch indicates that the proportion of IT spend outsourced to India is likely to increase from 5 per cent to 15 per cent in the next two years.