IT PSUs expenditure expected to beat China

Mumbai, July 26 | Updated: Jul 27 2006, 05:30am hrs
Indias expenditure on information technology (IT) in the public sector will be the fastest growing in Asia, expected to grow at 19.6% to $2.9 billion in 2009 from o $1.4 billion in 2005. This beats China, which is expected to to grow at 14.6% during the same period, a report by IT market research firm Springboard Research has said.

The largest segment of spending within the government sector in India was the internal security and defence sub-verticals. They accounted for 14.4% of the IT spending in the government sector, with public education having the second largest share at 11.4%. The fastest growing area of IT spending is expected to be government managed healthcare with a growth rate of 22.1% from 2005-2009.

India is playing catch-up where the public sector is concerned, but it is making the key technology investments that are needed to help maintain the high rates of economic growth, Springboard India research manager Tirthankar Sen said. The government understands that heavy investments in technology are needed to help India continue in its efforts to modernise the public sector and attract foreign investment, he added.

Springboard found that within IT spending in the public sector, spending on hardware accounted for the lions share of expenditure with 60%, followed by IT Services at 23%, and software at 17%. IT services are expected to be the fastest growing area of IT spending in the public sector with a CAGR of 21.9% from 2005-2009.

Currently, India is among the lowest ranking countries in Asia for per capita spending on IT in the public sector. However, based on the growth rates that have been forecast, India is making investments needed to increase efficiency of government services. u