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New Delhi May 23 Leading Indian companies are set to increase their IT spends by 26 per cent in the fiscal year 2007-08, taking it to Rs 8,974 crore from Rs 7,123 crore spent last year. However, IT expenditure reported 27 per cent growth during the previous fiscal year.

Expenditure

The one per cent marginal decline in expenditure is mainly due to reduction in cost of software, hardware as well as the sophisticated nature of IT adoption. These were the finding of a joint survey carried out by IDC and Dataquest covering 226 organisations, of which 50 per cent were public sector units from across eleven verticals.

Investments

Last year IT investments made by large organisations contributed to more than one tenth of the total domestic market that stood at Rs 68,411 crore. This includes the Government's expenditure, companies' as well as individual spend on hardware, software and IT-enabled services.

The report estimates that the average IT spend as a proportion of sample companies' turnover increased to 0.7 per cent in 2006-07 from 0.6 per cent over the previous year. Banking, financial services and insurance segment (BFSI) and the IT and IT enabled services (ITES) invested 1.19 per cent and 1.58 per cent of their revenues respectively on IT last year.

BFSI, telecom

According to the survey, IT expenditure of 35 banks, financial institutions and insurance companies stood at Rs 2,646 crore and is poised to grow to Rs 3,368 crore, continuing to make the sector the highest IT spender. Following this is the telecom sector comprising of eight major firms whose investments stood at Rs 2,314 crore last year and is slated to increase to Rs 3,031 crore.

The IDC-Data Quest report puts IT and ITES sector at the third slot with top 23 companies spending Rs 652 crore during the last financial year followed by retail sector that invested Rs 11.21 crore and would grow to Rs 15.83 crore.

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