PC segment drives IT growth

NEW DELHI, JUNE 16. The domestic spending on information technology (IT) products and services has grown by an impressive 30 per cent to touch Rs. 16,538 crores in 1999-2000 against Rs. 12,734 crores in the previous year, despite uncertain market conditions.

During the year, the total hardware sector including desktop PCs, servers and peripherals witnessed a 38.6 per cent growth at Rs. 9,280 crores as compared to Rs. 6,693 crores in 1998-99, according to the latest International Data Corporation (IDC) survey. ``It was the hardware sector, which recorded the highest growth rate during the year, and consequently the share of hardware in total IT spending jumped to over 56 per cent in 1999- 2000 from 53 per cent in the previous year," the survey said.

The desktop PC segment, which was a key driver for this growth, jumped to Rs. 4,825 crores, reflecting a 43 per cent increase over Rs. 3,371 crores in the previous year, it said.

The domestic spending in the packaged software segment was Rs. 1,620 crores in as compared to Rs. 1,335 crores, thereby showing a 21.4 per cent increase.

IT services spending grew by about 18 per cent to Rs. 3,916 crores from Rs. 3,326 crores in 1998-99, the survey said, adding that IT training and consumables' spending touched Rs. 1,722 crores during the year, thus showing about 25 per cent increase over Rs. 1,381 crores in 1998-99.

"Overall, the performance of the industry is noteworthy as it is the first time in five years that the annual growth has shown an increasing trend. The growth rate had come under tremendous pressure after 1996 due to continued political uncertainty even as the IT sector continued to grow higher than most sectors of the economy," the IDC survey said.

Lauding the impressive performance of the industry this year, the survey said the growth rate increase was despite the fact that 1999-2000 was a difficult year for the economy in general and the IT industry, in particular.

``The year began with the Kargil crisis which threatened to have a grave impact on the economy. This was followed by the Lok Sabha elections, which brought economic activity to a virtual standstill for almost a month,'' it said.

The survey also pointed out that the third quarter of the financial year was infected with the Y2K issue which kept some major purchase decisions on hold, but added that the issue did not affect the it market negatively as such decisions only got postponed and not scrapped altogether.

``The IT industry, however, had to face a major crisis in the second half of the year when the availability of key components serely resulted in the price increase," it added.

- PTI

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