Demonetisation effect: India’s IT spending forecast down from 9.5% to 7.5%

The Indian government will spend $7.8 billion on IT in 2017, 7.5 percent increase from 2016, this is down from Gartner’s previous projection of 9.5% growth this year.

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The Indian government will spend $7.8 billion on in 2017, 7.5 percent increase from 2016, says a forecast from research firm Gartner. This is down from ’s previous projection for 9.5 percent growth this year. “The 2 percent revision in our outlook is primarily due to the effects of demonetisation and a drop in industrial production,” said Moutusi Sau, principal research analyst at Gartner.

IT services (which includes consulting, software support, business process outsourcing, IT outsourcing, implementation, and hardware support) is expected to grow 10.8 percent in 2017 to reach $2 billion USD, making it the largest IT spending category. “Spending plans like affordable housing scheme, and increased loans to small and medium enterprises by the government are likely to have a positive effect on IT spending in the next few quarters,” said Sau.

The software segment includes enterprise resource planning (ERP), supply chain management (SCM), customer relationship management (CRM), desktop, infrastructure, vertical specific software and other application tools. The software segment is expected to grow 10.8 percent in 2017 to reach $1.1 billion USD. ERP/SCM/CRM will be the fastest growing segment with 14.5 percent growth in this category.

Devices, which includes printers, copiers, MFPs, mobile devices, PCs and tablets, is expected to grow 10.4 percent in 2017 to reach $1.1 billion USD.

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