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CHENNAI: In a marginal downgrade of its earlier forecast, global Information Technology (IT) consulting firm Gartner estimates that IT spending in India will total $94 billion in 2020- an increase of 6.6% compared to the current levels of $88.5 billion expected to hit in 2019.

Arup Roy, a research vice-president at Gartner, told TOI that this would represent a very small downward revision from their expectations earlier owing to both global macros and domestic demand factors in India.

He noted that though business spends on software and services have seen an uptick post the corporate tax cuts announced in mid-2019, certain sectors such as manufacturing have held back temporarily on digital transformation projects and other discretionary IT spends.

The projections for 2020 are however higher than the 2% growth rate for India IT spending that Gartner expects for 2019. The spending in consumer devices segment (including mobile phones) shrunk by around 2.4% in 2019 bringing down overall IT spends growth in the year.

“Over half of India’s total IT spending is done by consumers, so it was expected that a dip in consumer spending would have tremendous impact on total IT spending,” John-David Lovelock, a research vice-president at Gartner, said.

“Consumer resistance to investing in devices has impacted overall IT spending in the country. In 2019, private consumption slowed despite five back-to-back rate cuts throughout the year. This scenario is expected to change in 2020.”

For 2020, software and devices spending are expected to pull up the overall IT spending in 2020. The growth in total software spending will be driven by enterprise application software which is forecast to grow 17% in 2020.

“In the next two to three years, IT spending will increase as the economy benefits from the goods and service tax ( GST ) implemented by the Indian government in 2018, and as policies supporting consumer spending come into practice,” Gartner's Roy said.

