Government CIO Priorities
Spending Big on IT How government’s internal reforms, led by citizen centric initiatives are driving demand for IT in India!
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he National e-Governance Plan (NeGP), that planned a project outlay of `30,000 crore , laid the foundation and provided impetus to longterm growth of e-governance in the country. It comprised 10 central MMPs, 10 state MMPs and 7 integrated MMPs, several of which are in advanced stages of implementation. With all state governments in the execution phase of their NeGP projects, the IT spending in the government sector is expected to show a CAGR of 17.3% for 200712 . These center and state level initiatives are created upon robust infrastructures including state data centers, national data centers, state-wide area networks, NIC net and national knowledge networks. Although both center and state have increased its spending, the center still leads with about 70% share of government funds, followed by state with 20% share and lastly the local governments with 10% share . All the above citizen centric programs under NeGP and elsewhere, necessitated that the government became more innovative and efficient internally. These several outward focused internal reforms in the government meant increased opportunities for government process re-engineering, and large scale IT implementation programs (both hardware and software) and capacity building (both IT and non-IT led). All of this meant increased opportunities for the private sector to provide required, qualified and cost efficient hardware, software, infrastructure and people. This can be validated by the government spending on IT, which increased from 0.3% in the tenth 5 year plan to about 0.5% in the eleventh 5 year plan. The e-governance and e-government projects, the national identity programs and large-scale digitization programs both at the central and state level should create the demand for IT products and services. Also areas such as data center, business continuity/disaster recovery, security and networks would be the focus as many domestic organizations are focusing on increasing IT infrastructure efficiencies. Several citizen centric projects nationwide 52 | July 15, 2011
OUTWARD FOCUSED INTERNAL REFORMS IN THE GOVERNMENT MEANT INCREASED OPPORTUNITIES FOR GOVERNMENT PROCESS RE-ENGINEERING, AND LARGE SCALE IT IMPLEMENTATION PROGRAMS including the UID, India Post, Indian Railways and LIC projects would lead to a combined spend of about $13 bn giving the IT Industry a much-needed fillip. With several other projects being/to be initiated in the government sector, it is estimated that the government’s share of total IT spend in India will cross 10% over the next couple of years from about 6% in 2010-2011. Considering all the above, the domestic IT market for the vertical comprising government and education was expected to increase from $2,247.5 mn in 2007 to $4,996.2 mn in 2012. It is also to be noted that as the central ministries and state governments would build-up their basic IT infrastructure in the beginning, the hardware would dominate the market with about 50% share. After hardware installations which would typically be in basic computerization and interconnectivity, the government would shift its focus on software and IT services and the maintenance and sustainability of the projects undertaken. With the above facts and information in mind, it can be reasonably said that the government sector would be a key driver of the IT Industry in India for the next couple of years at the least and with the continued focus of the government stakeholders, only time will decide what numbers would be met. n
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NEEL RATAN The author is executive director, PwC India maildqindia@cybermedia.co.in DATAQUEST | A CyberMedia Publication