Most civic agencies in India expect less than 10% increase in their IT budgets: Report

In Maharashtra, five civic agencies (Pune, Thane, Pimpri-Chinchwad, Nagpur and Navi Mumbai) will spend between Rs 60 million and Rs 220 million for ICT deployment in 2014-15, according to Schneider Electric India’s ‘ICT in Urban Governance’ report, which surveyed 53 cities across India**.**

From these, Nagpur was one of 10 civic agencies in India with the highest municipal budgets for 2014-15, accounting for 38 percent of agencies with budgets exceeding Rs 10,000 million. With a municipal budget of approx. Rs 12,000 million, Nagpur will spend 0.5 percent or Rs 60 million on ICT deployment in 2014-15.

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Percentage-wise, the highest budget deployment for ICT will be done by Navi Mumbai Municipal Corporation, which will spend up to 1 percent (Rs 220 million) of its approx. budget of Rs 22,000 million.

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In the case of IT budget spends, huge variations exist in the proportion spent by different civic agencies across India. More than 40 percent reportedly spend in excess of 40 percent of their IT budget, while another 13 percent spend 31-50 percent. Conversely, about 33 percent reportedly spend less than 5 percent of their IT budgets.

IT spends are evenly spread across different categories. Most civic agencies spend less than 30 percent of their IT expenditure on software, maintenance, upgradation and hardware. Around 45 percent spend more than 30 percent on hardware and software.

Most civic agencies expect less than 10 percent increase in IT budgets over the next two years; only two plan to have a hike of more than 50 percent. About 60 percent plan to increase IT budgets by only 1-10 percent during the next two and a half years.

Less than 10 percent plan to hike the IT budget by more than 50 percent during the period in consideration; and about 11 percent plan to increase it by 11-20 percent.

Over the next two years, IT budget increase in most agencies will be either in the 1-10 percent or 11-20 percent range, the report said.

Stressing the importance of higher budget allocations and prudent spends on ICT, Anil Chaudhry, Country President and Managing Director, Schneider Electric India, said: “The present Government’s vision of building 100 Smart Cities will be contingent upon the efficient adoption of ICT solutions. In turn, this needs support at the ground level, along with robust budget allocations for ICT. Accordingly, spends should be increased and allocated budgets spent judiciously for the Government’s vision of Smart Cities to become a reality.”