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MUMBAI, India., August 19, 2021

Gartner Forecasts India Government IT Spending to Grow 8.6% in 2022

Highest Growth to be Recorded in Software in 2022

India government IT spending is projected to total $8.3 billion in 2022, an increase of 8.6% from 2021 according to a latest forecast by Gartner, Inc.

“Digitalization initiatives of Indian government organizations 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, principal research analyst at Gartner. “As vaccination rates increase throughout the country and public health improves, the governments will focus on furthering the digitalization efforts on concerns such as ‘citizen experience’ and digital inclusion.”

Individual digital solutions do not correlate to overall digital maturity. As a result, the overall digital maturity of Indian government organizations is low compared to its western counterparts. Moving from legacy systems to digital will be a major reason for IT spending growth in 2022. For initiatives, such as digital licensing, online judicial proceedings, digital taxation, that were initiated as a knee-jerk reaction to the pandemic in 2020, there is a still long way ahead to achieve full potential as digital inclusion is not fully met in the country. The forthcoming 5G spectrum auction in India will aim at solving some of these challenges related to digital inclusion in 2022.

Indian government organizations, both local and national, will increase spending on all segments of IT in 2022, except for telecom services. The software segment is forecast to achieve the highest growth of 24.7% in 2022 as the adoption of citizen service delivery applications with use of artificial intelligence and machine learning will improve across citizen initiatives (see Table 1). As India prepares itself for 5G rollout, the telecom market requires deep pockets to make an impact on innovation, quality of services to citizens, pricing. Hence, the focus on investing on telecom services will be lower as compared to the other segments in 2022.

Table 1. Government IT Spending Forecast by Segment, 2021-2022, India (Millions of U.S. Dollars)

Segment

 

2021

Spending

2021

Growth (%)

2022

Spending

2022

Growth (%)

Data Center

496

7.6

507

2.2

Devices

1,390

20.1

1,394

0.28

Internal Services

1,677

6.3

1,751

4.4

IT Services

1,783

16.4

2,005

12.5

Software

1,462

19.4

1,823

24.7

Telecom Services

828

4.0

819

-1.0

Total

7,636

13.2

8,299

8.6

Source: Gartner (August 2021)

“In India, with increasing investments on cloud and cyber-security, the prime focus of IT spending by government organizations 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 futuristic direction they should take and for IT technology/service providers that go beyond provision to partner and collaborate with them to achieve their mission-critical priorities,” said Kaushik.

As cloud deployments and implementations further the digital agenda, privacy, and security continue to be government CIOs’ top concerns in the country. Key technologies that government CIOs in India will be prioritizing their spending on in 2022 will be digital workplace and business continuity solutions, business intelligence and data analytics, responsible AI and blockchain along with improved data privacy & data sharing tools.

Gartner clients can get more information in “Forecast: Enterprise IT Spending for the Government and Education Markets, Worldwide, 2019-2025, 2Q21 Update.”

Additional analysis on how government CIOs will reinvent programs and service delivery will be presented during Gartner IT Symposium/Xpo 2021, the world's most important conferences for CIOs and other IT executives. IT executives rely on these conferences to gain insight into how their organizations can use IT to overcome business challenges and improve operational efficiency. Follow news and updates from the conferences on Twitter using #GartnerSYM.

About Gartner for High Tech

Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech. Follow news and updates from Gartner for High Tech on Twitter and LinkedIn using #GartnerHT.

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