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Home IT spending to surge in India, study says

Spending by Indian households on information technology, particularly computer hardware, is set to surge 55 per cent in the current fiscal year, the International Data Corp said.

IDC, in a statement, said there was a clear shift in IT spending towards home use and away from spending by larger firms.

IDC said households, together with small- and medium-sized businesses, would drive domestic IT spending, which was expected to top Rs 210 billion ($4.5 billion) in 2000-01 (April-March), up from an estimated Rs 165.4 billion the previous year.

IDC said its "Map-IT 2000" survey of households and commercial establishments in 25 Indian cities estimated IT spending by households would grow 55 per cent in value to account for 14 per cent of the total market, up from 11 per cent in 1999-2000.

Although IT purchases by small- and medium-sized businesses would show a 25 per cent growth in value in 2000-2001, the sector's market share would fall marginally to 44 per cent from 45 per cent, IDC said.

The market research firm estimated that the spending share of large units with 50 or more employees would drop to 29 per cent from 31 per cent the previous year.

Spending by government, educational and research bodies was expected to hold steady at 13 per cent of the overall figure, the statement said.

IDC said the advent of increasingly cheaper personal computers and modems to enable Internet dial-up would keep the focus of household IT spending on hardware.

Industry officials say Indian homes more likely to purchase personal computers as prices fall closer to the levels of colour televisions.

The numbers of personal computers in India stood at around 4.3 million at the end of 1999-2000, and the hardware industry expects an additional 1.9 million units to arrive 2000-01. Cable television currently reaches some 40 million households.

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