Indian Government’s IT Spending pegged at Rs. 36,800 Cr in 2013 [Report]

Indian Government’s IT spending is estimated to be Rs. 36,800 crore in 2013 according to a forecast by research and advisory firm Gartner. Telecommunications will be the largest expenditure category while software will see highest growth in government spending.

Government of India’s UID program is seen as a key driver of increase in expenditure. Direct cash transfersand a revamped welfare system are some of the ambitious goals of the UID program.

The UIDAI portal reveals that nearly 27.5 crore or 275 million AADHAARs have been issued across India. After achieving 200 million enrolments in February last year, the government reportedly allowed authorities to approve the enrolment of a further 400 million.

Implementing and issuing AADHAAR numbers across a user base of 600 million Indians will presumably drain a significant sum out of the government coffers. Ram Sewak Sharma, Director General, UIDAI, said last year that the total cost of the project may be Rs. 18,000 crore.

“India goes to the national polls in 2014, and the GoI will aim to expand the UID operational infrastructure by speed tracking ‘financial inclusion’, allowing easy access to banking for poor & encouraging micro ATMs” said Anurag Gupta, Research Director, Gartner.

The Rs. 20,000 crore National Fibre Optic Network (NFON), electronic chip making and digitization of databases are also seen by Gartner as factors which will drive government spending and benefit the Indian IT sector.

In October last year, the Union Cabinet approved the National Electronics Policy which envisaged the incubation of a $400 billion Electronic System Design and Manufacturing (ESDM) sector in India by 2020. Large scale indigenous chip making facilities was one of focus points of the policy.

Apart from the highlighted government initiatives in the Gartner report, there are other programs that are set to increase penetration of IT in everyday governance. “In the second generation revolution what we are doing is transforming governance, education, health and many other things with the use of internet and web” said Sam Pitroda, adviser to the PM in September 2013. The ‘second generation revolution’ will reportedly see the government spending over Rs. 1 lakh crore.

Gartner expects government spending on desktop and infrastructure software to drive a strong rate of growth in expenditure in the software category. Telecommunications, the largest driver of the 10.5% forecast increase in IT expenditure will include government spending on telecom/networking equipment and related services.

Information and technology is seen by commentators as a vital anchor point for India’s growth story. Commentators are hoping that expectations of increased expenditure in IT will eventually be backed by efficient implementation for delivery of better governance to the common man.