Government IT Spending to Jump 10.3% in 2023 in India: Gartner

According to Gartner’s latest forecast, global government IT spending is expected to reach $589.8 billion in 2023, representing a 7.6% increase from the previous year. The surge in spending comes as governments face various challenges, including inflation, workforce scarcity, and the need to counterbalance internal talent scarcity.

Apeksha Kaushik, Principal Analyst at Gartner, highlighted the impact of these challenges on government CIOs, stating, “Global challenges like inflation and workforce scarcity and their local repercussions are testing the abilities of government CIOs to respond with appropriate service delivery mechanisms and organizational accountability.” In response, government organizations are committing to investing in digital programs, with a focus on replacing legacy applications. The 2023 CIO and Technology Executive Survey by Gartner revealed that 57% of government CIOs plan to increase funding for application modernization, compared to 42% in 2022.

Worldwide Government IT Spending Forecast (Millions of $)

Furthermore, government institutions are increasingly aligning their digital projects with mission impact. Over 75% of governments worldwide are expected to measure the success of their digital transformation initiatives by evaluating the enduring mission impact by 2026.

The report also indicates that software spending will continue to dominate in 2023, with investments in application modernization driven by the adoption of software-as-a-service (SaaS) solutions and the growing use of low-code application platforms (LCAPs) to accelerate legacy modernization efforts.

In terms of government IT services, spending is projected to continue growing. However, government organizations are facing constraints in terms of compensating and retaining IT talent, contributing to an IT talent shortage. To address these challenges and continue modernizing critical IT infrastructure and applications, governments are adopting a multi-sourced workforce strategy. This strategy involves optimizing the use of internal IT talent, investing in employee experience tools to foster innovation, and partnering with external IT service providers to expedite value delivery.

In India, government IT spending is forecasted to reach $11.6 billion in 2023, reflecting a 10.3% increase from the previous year. The Indian government is prioritizing initiatives that focus on modernization, productivity enhancement, automation, and software-driven transformations. For instance, initiatives such as the Unified Mobile Application for New-Age Governance (UMANG) and the Open Government Data Platform (OGDP) are providing mobile-first experiences and digitizing government services to improve the overall citizen experience.

India Government IT Spending Forecast (Millions of $)

While digital transformation remains a top priority for governments worldwide, some government CIOs have identified a need to realize maximum benefits from their digital investments. Kaushik emphasized the importance of aligning digital solutions with the mission or public purpose of the organization, stating, “Government CIOs who are moving beyond scaling digital solutions across their critical services are ensuring that further investment in digital solutions can directly impact how they achieve the mission or public purpose of their organization.”

As constituents increasingly demand online experiences equivalent to those in the private sector, government organizations will continue investing in initiatives to improve access to digital services throughout 2023.

The Gartner report provides valuable insights into the trends and priorities shaping government IT spending, highlighting the significance of digital transformation and the need for strategic alignment with organizational missions to achieve maximum impact.