Demonetisation hits government IT spending: Gartner

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Mumbai | Published: June 1, 2017 5:34:32 PM

There will be a 2 per cent drop in the Indian government's IT spending this year due to demonetisation and a drop in industrial production, market research firm Gartner said on Thursday.

IT outsourcing, implementation and hardware support) is expected to grow 10.8 per cent in 2017 to reach $2 billion, making it the largest IT spending category. (PTI)

There will be a 2 per cent drop in the Indian government’s IT spending this year due to demonetisation and a drop in industrial production, market research firm Gartner said on Thursday. The government is forecast to spend $7.8 billion on IT in 2017 — a 7.5 percent increase from 2016. However, this is down from Gartner’s projection of 9.5 percent growth this year.

“The 2 percent revision in our outlook is primarily due to the effects of demonetisation and a drop in industrial production,” Moutusi Sau, principal research analyst at Gartner, said in a statement. “However, spending plans like affordable housing scheme and increased loans to small and medium enterprises by the government are likely to have a positive effect on IT spending in the next few quarters,” Sau added.

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IT services (which includes consulting, software support, business process outsourcing, IT outsourcing, implementation and hardware support) is expected to grow 10.8 per cent in 2017 to reach $2 billion, making it the largest IT spending category.

The software segment is expected to grow 10.8 per cent in 2017 to reach $1.1 billion. Enterprise resource planning (ERP), supply chain management (SCM) and customer relationship management (CRM) will be the fastest growing segment with 14.5 per cent growth. Devices (which includes printers/copiers/MFPs, mobile devices, PCs and tablets) is expected to grow 10.4 per cent this year to reach $1.1 billion.

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