Indian PSUs Spent $8.5 bn on IT in 2012: Report

Growing GraphIndian public sector companies have spent over $8.5 bn on Information Technology to cut costs and automate functions, according to a new report.  IT spending by PSUs, accounts for about 2% of total revenues of 225 public sector undertakings in India, the report by Zinov Management Consulting said.

This sudden change can also be seen as a move by PSU’s to address the global competition faced by PSUs which accounted for a total turnover of $383 bn in the financial year 2012.

Some Key Findings:

  • Public Sector Units (PSUs) accounted for a $ 383 billion turnover in  FY2012, with a revenue growth of 11% since 2009, towards the economy.
  • The sector employees 1.4 million people with 40% of PSU companies operating in the manufacturing sector.
  • Energy and BFSI are the major PSU verticals for IT investments.
  • Indian PSUs are expected to witness a turnover of more than $ 1 Trillion by 2020 and a large part of the growth will be attributed to investments in modern forms of IT including cloud, big data & mobility.

Government Spending on IT

Meanwhile, the Indian government has also been spending a large amounts on technology. According to the latest Gartner report, the government is likely to spend Rs 36,800 cr on IT products and services in 2013.

We had recently reported a move by the Indian Government to make 100 % domestic sourcing mandatory for a massive telecommunications project worth around Rs 21,000 crore.

Global leaders in the telecom sector like Ericsson, Nokia Siemens Networks, Alcatel-Lucent, Huawei and ZTE are missing from the certified list of vendors eligible to supply Gigabit Passive Optical Network, which is the chosen fiber technology for this project. This move, criticised by overseas companies,  will give a boost to telecoms PSUs and other Indian companies like  ITI, Tejas Networks, Himachal Futuristic Communications, C-DoT, VMC Systems, Prithvi Infosystems, Sai Systems, United Telecoms and SM Creative.

Indian private IT sector is also benefiting from this increased IT spending by the Government. Large Indian IT projects won by private companies include the income tax automation project by Infosys, passport registration contract won by TCS, Aadhaar projects won by several private players, India Post modernization contracts and security projects.