IT services is expected to grow 9.3%, with the business process outsourcing sub-segment growing 21%.
Driven by the Digital India initiative, the Indian government is forecast to spend ₹48,280 crore ($7.2 billion) on IT products and services, according to Gartner Inc.
2016's spending for internal services, software, IT services, data centre, devices and telecom services is 24% higher than 2015, the market research firm said.
IT services—including consulting, software support, business process outsourcing, IT outsourcing, implementation and hardware support—is expected to grow 9.3% in 2016 to reach ₹12,070 crore ($1.8 billion), with the business process outsourcing sub-segment growing 21%.
Telecom services, meanwhile, will be a ₹10,728.89 crore ($1.6 billion) market, with the mobile network services sub-segment recording the fastest growth with 5.2% in 2016 to reach ₹6,095.35 crore ($909 million).
"Government spending on software will total $885 million (₹5,934.42 crore) in 2016, a 4.5% increase from 2015," said Moutusi Sau, principal research analyst at Gartner. "The software market will be led by growth in applications."
Internal services, which include salaries and benefits paid to IT services staff of an organisation, will growth 5.8% in 2016 to reach ₹10,058.34 crore ($1.5 billion). The information services staff includes all employees that plan, develop, implement and maintain information systems.
"The e-governance initiatives to simplify digital channels and data-driven initiatives are driving investments in the government and are anticipated to grow through 2020. The ’Digital India’ initiatives are making government processes streamlined and integrating the data repositories," said Sau.