IT spending by the Indian public sector is expected to grow to $5.1 billion

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by 2011 from existing $3.1 billion. According to a study by Springboard Research, an IT market research company, education has emerged as the biggest market segment with 11 per cent share of total IT spending, while defence and public safety and taxation and finance are the next three segments. In terms of IT segments, hardware cornered half of the overall spending, while IT services had a bigger share than software, the study found.

Over two-thirds of the total spending on IT would be controlled by the government, with states contributing to 22 per cent, and local governments 11 per cent. Government projects such as the national unique ID card project, defence tactical communication system and providing personal computers and broadband access to schools across the country would act as drivers to the growth of country’s public sector IT spending.

“The re-election of the Congress-led United Progressive Alliance government will spur further investments in e-governance projects, including the $5 billion national e-governance plan,” said Nilotpal Chakravarti, senior research analyst – vertical markets at Springboard Research. “The government’s strong commitment to improve the delivery system in India by leveraging ICT will propel IT investments in the public sector, and will offer significant opportunities for IT vendors eyeing this high-potential space,” he added. Chakravarti said that the challenges before IT vendors include slow decision-making process despite the adoption of e-procurement, delays caused by bureaucratic hassles, complex bidding procedures and an especially price-sensitive market. “On the other side, end-users face challenges in lack of transparency and efficiency in government services, lack of integration among different government agencies and poor mechanisms of complaint handling,” he said.