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The Indian government’s IT spend is projected to touch $8.3 billion in 2022, an increase of 8.6 per cent from 2021, according to Gartner, Inc.
“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,” said Apeksha Kaushik, senior principal research analyst at Gartner.
Digitalisation presents a mixed bag of opportunities, challenges to Indian IT sector
“As vaccination rates increase throughout the country and public health improves, the government will focus on furthering the digitalisation efforts on concerns such as ‘citizen experience’ and digital inclusion,” Kaushik said.
However, individual digital solutions do not correlate to the overall digital maturity.
‘Digital transformation poses hidden risk’
The overall digital maturity of Indian government organisations remains low compared to western counterparts. A major reason for increased IT spending in 2022 is the shift from legacy systems to digital, it said.
“For initiatives such as digital licensing, online judicial proceedings, digital taxation, which were initiated as a knee-jerk reaction to the pandemic in 2020, there is still a long way ahead to achieve full potential as digital inclusion is not fully met in the country,” the report said.
Some of these challenges related to digital inclusion in 2022 will be tackled by the forthcoming 5G spectrum auction.
Indian government organisations, both local and national, will increase spending on all segments of IT in 2022, except for telecom services, as per the report.
The software segment is forecast to achieve the highest growth of 24.7 per cent in 2022, as the adoption of citizen service delivery applications, with use of artificial intelligence and machine learning, will improve across citizen initiatives. It is followed by IT services at 12.5 per cent estimated growth.
As India prepares for 5G rollout, the telecom market will require deep pockets to make an impact on innovation, quality of services, and pricing. Hence, the focus on investing in telecom services will be less compared to other segments in 2022, as per the report.
“In India, with increasing investments on cloud and cyber-security, the prime focus of IT spending by government organisations is on building collaborative partnerships, along with technology solutions. Government CIOs are looking beyond implementation for signs of the impact from the technology, outcome-based direction they should take and for IT technology/service providers that go beyond provision to collaborate with them to achieve their mission-critical priorities,” said Kaushik.
With cloud deployments accelerating the digital agenda, privacy and security remain top concerns of government CIOs. Key priorities in 2022 include digital workplace and business continuity solutions, business intelligence and data analytics, responsible AI and blockchain along with improved data privacy and data sharing tools.
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