Government in India is emerging as the fourth largest vertical purchaser of Information Technology (IT) after the telecom, manufacturing and banking and finance industries. According to Gartner estimates, the Indian government has spent around US$ 1 billion on Information Technology in 2002. This includes the expenditure of the Central and State governments on hardware, software, telecommunication equipment, telecommunication services, and IT services, but excludes salary costs of IT staff. In fact, the government accounted for 9 per cent of the total IT spending in India for the year 2002, and in five years that is estimated to go up to 15 per cent. Though E-Government is still in its infancy, over 20 states/union territories already have an IT policy in place. In terms of basic computerization, police departments, treasury, land records, irrigation and justice are seen as having the maximum potential.
3% of the plan expenditure of each central ministry is allocated towards computerization and most of the state governments also follow a similar strategy. NASSCOM estimates that in the next five years, state governments in India will spend close to Rs. 15,000 Crores (US$3.3 Billion) on computerizing their operations. This estimate excludes major projects such as the National Identity Card that is currently undergoing pilot implementation and is likely to be executed within the next five years. This project alone is expected to cost the government between 10,000 and 15,000 Crores (US$2.2-3.3 Billion).
The pressure to be IT-savvy is not only to keep with times, but comes from a more pragmatic dimension; loans to governments from multilateral organizations have now become more or less contingent upon a proper treasury management system which translate into computerized systems that are providing rapid and transparent reconciliation to tell lending institutions the precise fate of funds it has lent.
According to NASSCOM, the E-Governance market is witnessing year-on-year growth and is estimated to be Rs. 1400 Crores (US$308 Million) in size in 2001-02. The E-Governance market grew by 18% last year and is the highest growing vertical in the domestic IT market. NASSCOM’s analysis of E-Governance implementation undertaken in 10 key States revealed that the southern States of Andhra Pradesh, Karnataka, and Tamil Nadu are leading in terms of implementing projects at different citizen - Government interface points. Others like Kerala, Gujarat, Maharashtra, Madhya Pradesh, West Bengal and Rajasthan, are catching up fast.
• One of the industry's most respected independent analyst groups
• National Association of Software and Service Companies. India's most important
Software trade body.
In addition to macro issues, NASSCOM’s study has identified industry level issues, which are inhibiting private participation in E-Governance projects. This includes the absence of a clear revenue stream offered by the government to the private sector, which is restricting private, sector investment in E-Governance. There is also inadequate awareness among government officials at all levels with respect to appropriate tendering, raising Requests for Proposals (RFPs), software pricing, bid assessment and IPR. |
