SPs in India bets big on Government sector

Creation of world class urban infrastructure is on the radar of the new government while the Modi Government has announced to develop 100 smart cities across the country. Rapid social change, macroeconomic uncertainty, technological innovation and citizen expectations from government are rising especially after the Budget 2014. There’s a feel good factor that is flowing among the IT industry and they see the tide in their favor with numerous opportunities offered by the government sector especially for the Partners in Tier 2.

With the vision to develop robust and sustainable skilling ecosystem for building India on the skill, scale and Speed will definitely take the IT industry for a positive growth. Why not, the government sector has always been lucrative when it comes to the IT budgets.

Indian public sector IT spending is predicted to grow at a rate of 10-11 percent between 2013 and 2017, according to Forrester Research.

The emphasis on manufacturing, infrastructure, FDI etc. will see a positive change in the working of the Solution providers. “With the government taking effective steps to develop better infrastructure and aiming to boost economic growth, there is high probability of rise in demand for skilled workforce. Also setting up of industrial smart cities will open up higher opportunities for talents who are more innovative and tech savvy,” says Vipul Datta, CEO, Futuresoft.

The government has pledged to support the growth of domestic information technology capabilities in both hardware and software, focused on enabling the timely delivery of citizen services and creating new jobs opportunities, especially in rural areas. Talking about the micro – Exemption on all inputs/components used in the manufacture of personal computers from 4 percent special additional duty (SAD) would help revive the subdued demand and promote domestic manufacturing in the country.

The establishment of 5 new IITs and 5 new IIMs in the Budget has raised the hopes of the industry stalwarts. “The focus on infrastructure will help the IT industry to grow at a pace. We are creating demand for IT, growing on technology and are focusing on government as a potential vertical for s to grow. As the government is encouraging industry to make technology available to common man, we are sure that this sector will yield major benefits for those who are servicing the government segment,” says Arun Kumar Dey, President, ITAO.

Each sector has its own challenges and opportunities. Government sector is one which is reviving from the dead and has been a key point focus for many solution providers now. The government has played a key role with public funding of a well trained pool of engineers and management personnel who could forge the India IT industry. The government is also promoting IT/ITES sector majorly by investing in Industrial smart cities, and making India the most preferred location for engineering by opening up 5 new IITs and IIMs, the industry will see good business in months to come.

Surendra Chikkala, MD, CA&S Solution is working with government from last 15 years and sees the vertical as the most potential for his business. He expanded his portfolio and filled up various tenders to approach the government sector. “Government work is time consuming, the deals are also closed in a period of 3-6 months, and the credit period is long. Therefore, we find the potential customer who have adequate fund to buy complete solutions. One has to make the approach different while dealing with the government sector,” explains Surendra Chikkala.

Tier-2 partners seem to be more focused towards state-level projects.

Sanjeev Bhattacharya, Director, E-Solutions also sees major potential in government sector. 60% of his business comes from the government sector. Having present in North East and Odisha his target customer is media and entertainment industry which is owned by the government majorly. To add icing on the cake, the announcement of funds in the budget for North East has also boosted the business for the IT industry.