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Indian IT to benefit from a 40000 crore government spend

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Be it the rising rupee or recession in the west everything effects Indian IT. If recession has affected the IT spends and subsequently the project pipeline, rising rupee has eaten away the profits. That only proved to be a temporary thing. As there is hope on both accounts.

INdia IT Industry

Orders globally are coming along though in tranches of $25 million to $30 million. TCS signed a 5-year deal with Volkswagen. It also have a contract with ABB. Wipro on the other hand signed a $34 million con2tract with Sunoco.

But the biggest driver for Indian IT is not the contracts from the west but from India itself. Indian government is set to spend 40000 crore rupees on various government digitization projects. The Unique ID project is just the start. Even that project is set to balloon into multiple IT projects.

Infosys has $1bn orders in pipeline. All of them from various government and eGovernance projects. TCS, Wipro and HCL are not far behind. After all it is 40000 crore rupees and someone has to get it. In all probability the entire top 5 will get a piece. The top 5 includes Tech Mahindra + Mahindra Satyam (once merged the combination will be the 4th largest in terms of market capitalization leaving HCL behind).

What exactly will the Indian government spend 40000 crores on?

1. A national database of maintaining health records of patients.

2. Modernization of India post using IT

3. Telemedicine digitization (worth more than 5000 crores)

4. Automating and integrating municipal councils across the country

5. Indian railways is set to spend $2bn to become more efficient and customer friendly.

40000 crores is a big amount and I expect that amount to be spent in the next 5 years. Only problem Indian IT faces is IBM. It already is the top vendor for Indian companies in IT with more than 10% market share. Indian IT companies have to try really hard to eat some of IBM’s lunch.

All these efforts are aimed at increasing transparency and reduce leakage (read corruption). How are we going to track the leakage in these projects is the big question.

Source :ETIG

  1. Sreekumar J says

    let more digitization happens and i think India should even think of digitizing currency…only way to stop/reduce corruption

  2. Madhav Shivpuri says

    Sriram, Nice info. Thanks.

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