Top Indian companies spent Rs 7,123 crore on IT systems in 2006-07, a growth of 27 per cent over the previous year, with PSUs forming a major part of the top 50 spenders, according to a survey.

The Dataquest-IDC MegaSpenders ‘07 survey said the growth rate of IT spend by top enterprises is expected to be 26 per cent in 2007-08, taking the combined spend to Rs 8,974 crore.

This marginal decline in growth rate is due to reduction in costs of IT inputs, both software and hardware, as the nature and pattern of IT adoption becomes more sophisticated.

PSUs leading
Interestingly, more than half the top 50 spenders on IT during 2006-07 were PSUs, breaking the myth that modernisation processes such as automation and IT deployment can take place only after privatisation.
Among these, Banking Financial Services and Insurance (BFSI) and Telecom sectors emerged as the biggest spenders.

“The survey points to a healthy growth in IT investments beyond the banking, financial services and telecom sectors. Utilities, automobiles, and were equally aggressive in investing in IT,” Dataquest Chief Editor Prasanto K Roy said.

“These IT MegaSpenders of India Inc set the tone for the domestic market, which had an annual growth of 27 per cent for the previous three years. The projected growth at a nearly similar level for this year is great news,” Roy added.

The average IT investment by an Indian company was Rs 34 crore in 2006-07 and is expected to grow by 26 per cent to Rs 43 crore this financial year.

Banks big spenders
The Top 15 IT buyers from the BFSI sector also made it to the Top 50 in the survey. These included Bank of Baroda, Bank of India, Canara Bank, Centurion Bank, HDFC Bank, ICICI Bank, IDBI Bank, Indian Overseas Bank, ING Vysya Bank, Karnataka Bank, Punjab National Bank, State Bank of India and Syndicate Bank.

Four insurance firms, LIC, New India, Oriental and United India also made to the Top 50 IT buyers. In 2007-08 as well, the BFSI sector is expected to remain the highest inductor of IT with expected investment of Rs 3,368 crore, says the survey. The telecom sector comprising 8 firms pumped in Rs 2314 crore on IT during 2006-07, making the highest average IT investment of Rs 289 crore for each company.

Telecom push
These included Aircel, Bharti, BSNL, Hutch, MTNL, Reliance Communications and VSNL. IT investments by the telecom sector is projected to increase to Rs 3031 crore this year.

The sunrise IT and ITES sector invested Rs 652 crore during the last financial year. This resulted in 23 mega spenders, including Mphasis, NIIT, TCS, Wipro from the IT and ITES sector investing an average of Rs 34.32 crore.
Retail sector is expected to increase its IT spends by 41 per cent while the utility, telecom and BFSI are expected to grow at 35 per cent, 31 per cent and 27 per cent respectively.

Hardware purchases make up for 42 per cent of IT spend. Overall, about 42 per cent of the total spend on IT was on hardware while expenditure on packaged software and services software stood at 26 pc.