Wednesday, 26 July 2006

India Govt. IT Spending to Top in Asia

India’s expenditure on IT in the Public Sector will be the fastest growing in Asia with an expected growth to USD 2.9 billion in 2009 from USD 1.4 billion in 2005, said Springboard research. The growth rate beats China...

India’s expenditure on IT in the Public Sector will be the fastest growing in Asia with an expected growth to USD 2.9 billion in 2009 from USD 1.4 billion in 2005, said Springboard Research. The growth rate beats China, the second fastest growing country in Asia, which is expected to have a growth rate of 14.6 percent during the same period.

In India the internal security and defence sub-vertical within the government sector showed the highest spending on IT. The sub-vertical, consisting of the entire defence establishment, internal security and public safety agencies, border control and immigration, and intelligence, accounted for 14.4 percent of the IT sending in the government sector, Springboard said.

Another area in the government sector, which showed fast growth in IT spending, was Government Managed Healthcare with a compounded annual growth rate (CAGR) 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 and to increase the speed and efficiency with which government services are delivered," said Tirthankar Sen, the Research Manager of Springboard’s India Research Centre.

"The government understands that heavy investments in technology are needed to help India continue in its efforts to modernize the Public Sector and attract foreign investment, Sen added.

India is among the lowest tanking countries in Asia for per-capita spending in the public sector, but it has shown profound growth rate that will surpass other countries in IT spending.

"We feel that India is making the investments needed to increase the efficiency and capability of government services. As the Indian economy continues to post high growth rates, it will be crucial for the government to make sure that technology investments are being made to support this economic growth," Jonathan Silber, Senior Market Analyst- Public Sector for Springboard Research.

Springboard found that within IT spending in the Public Sector, spending on Hardware accounted for the lion’s 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.