Union Budget of India will boost hardware, software and services spend

IT will play a key role in addressing issues like poverty alleviation and job creation, following the recent budget

IT will play a key role in addressing issues like poverty alleviation, job creation, better security and financial inclusion following the recent budget.

The Union Budget of India for 2014-2015, which was announced in July 2014, gave IT a critical role in India’s development, according to country manager for India at Forrester Research Manish Bahl.

“We expect technology to be a critical driver in addressing deficiencies with improved oversight, coordination and management for India. 

"As part of the new budget, Indian government’s clear focus on addressing urbanization, improving power generation, transportation, public security, skill development, financial inclusion, revamping the manufacturing sector and building smart cities will drive significant investments across hardware, software and services," said Bahl.

He added that IT software and services will provide good revenue and growth for tech vendors.

Key issues to be addressed by technology:

  • Technology transfers will help provide affordable and quality healthcare services in rural India. The investment includes setting up model rural health research centers which will attend to rural masses.
  • The new government is striving towards launching the Digital India program. This is supposed to bridge the gap between digitally rich societies and those without it. Broadband connectivity in villages increases production of indigenous software and hardware for exports, as well as improved government services through IT-driven platforms. 
  • More transparency in government processes through IT would be inclusive of an Rs 500 crore investment. Software startups will be encouraged as prime minister Narendra Modi pushes towards an e-Kranti government.
  • Rs 200 crore has been set aside for investment in technology sector networks aiming to promote entrepreneurship and innovation in the field of IT.
  • Information technology will be given more prevalence for tax administration and adopting non-intrusive methods for broadening the tax base.
  • The Indian government has also allocated funds for the development of 100 smart cities wherein technology will be playing a key role in every step.

Bahl further added India's latest fiscal budget will be supported by new and innovative delivery models for the deployment of effective technologies. “The need of the hour for the Indian government is to adopt the CIO role at the federal and state levels, and focus on execution to get the maximum from the government's spending,” he said.

According to research director of Gartner India Arup Roy, the policies that would have a major positive impact on the domestic IT uptake are the Digital India program, good governance, and the Smart Cities program. "Also, a foreign direct investment (FDI) cap increase in the defense and insurance sectors is a huge positive and has direct bearing on the IT industry,” he said.

Amarjit Biswas from Samsung India (Odisha Logistics) said the interim budget for 2014-15 speaks of a 6% growth in the gross domestic product (GDP) and huge investments in the technology sector. “However, only time will suggest if the promises of good governance are kept. As of now, the initiatives look huge and will certainly lead India into a smarter territory,” he said.

Infosys product strategist and chief architect Abhijit Shroff had similar sentiments. “IT has always been the most popular profession for Indian executives, " he said. "It’s high time the government pours in investment so the earnings rotate in this nation and not abroad. If the 2014 budget plans are rightly met, a lot can improve for this country.”

Read more on Managing IT and business issues