Indian govt IT spend growth to slow down to 8.6% in 2022: Gartner

By: |
August 19, 2021 3:23 PM

Telecom services will see a 1 per cent decline in overall spending to USD 819 million, after posting an expected 4 per cent growth to USD 828 million in 2021, Gartner said.

The rating agency said the credit ratio, which illustrates the number of upgrades to downgrades, rose to over 2.5 times in the first four months of the fiscal, compared to 1.33 times in the second half of FY21. It had touched a decadal low of 0.54 time amid the first wave in the first half of fiscal 2021.As vaccination rates increase and public health improves, governments will focus on furthering the digitalisation efforts

The growth in information technology spending by the government is estimated to slow down to 8.6 per cent to USD 8.3 billion in 2022, against the 13.2 per cent rise expected in the ongoing 2021, a global consultancy said on Thursday.

“Digitalisation initiatives of Indian government organisations took a giant leap in 2020 because of the global pandemic. The pandemic forced the government to shift priorities as supply chains and revenue streams dwindled,” Apeksha Kaushik, senior principal research analyst at Gartner, said.

As the vaccination rates increase throughout the country and public health improves, governments will focus on furthering the digitalisation efforts on concerns such as ‘citizen experience’ and digital inclusion, she added.

The growth in spending on software will increase to 24.7 per cent to USD 1.823 billion in 2022, while the data centre spends growth will see one of the sharpest declines to 2.2 per cent from 7.6 per cent in 2021 to USD 507 million in 2022, the report said.

The fast-paced growth in software spends will be on the back of the adoption of citizen service delivery applications with the use of artificial intelligence and machine learning to improve across citizen initiatives, it said.

Telecom services will see a 1 per cent decline in overall spending to USD 819 million, after posting an expected 4 per cent growth to USD 828 million in 2021, Gartner said.

“As India prepares itself for 5G rollout, the telecom market requires deep pockets to make an impact on innovation, quality of services to citizens, and pricing. Hence, the focus on investing in telecom services will be lower as compared to the other segments in 2022,” it reasoned.

The prime focus of IT spending by government organisations is on building collaborative partnerships, along with technology solutions, as the investments in cloud and cybersecurity increase, Kaushik said.

“Government CIOs (chief information officers) are looking beyond implementation for signs of the impact from the technology, outcome-based futuristic direction they should take and for IT technology/service providers that go beyond the provision to partner and collaborate with them to achieve their mission-critical priorities,” she added.

As cloud deployments and implementations further the digital agenda, privacy and security continue to be government CIOs’ top concerns in the country, the consultancy said.

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