Schneider Electric India Report 'ICT in Urban Governance' Says Major Indian Civic Agencies will Spend Between 0.5% and 5% of the Municipal Budget to Boost Information and Communication Technology Framework

Schneider Electric India – the global energy management specialist and leader in energy efficiency –cited the latest India Infrastructure Research report titled ‘ICT in Urban Governance – Survey’ to stress that higher ICT budgets were required for faster conversion of existing cities into Smart Cities. With civic agencies in 53 cities across India responding to the survey, the report revealed ICT adoption among cities varied according to their size, requirements, financial resources and approach to ICT by the city’s Municipal Commissioners and IT heads.

In the case of municipal budgets too, these varied widely across cities from less than INR 500 million to more than INR 30,000 million. For 2014-15, about 38% of the civic agencies had municipal budgets exceeding INR 10,000 million. Of these, 73% (eight civic agencies) had budgets of more than INR 20,000 million. Another 21% of respondent civic agencies had budgets ranging between INR 5,000-10,000 million. Around 80% allocate less than 1% of their budgets to ICT. Only 12% of the civic agencies had ICT budget allocations of 1-1.5%. In contrast, about 2% allocate more than 5% of municipal budgets towards ICT. IT budgets are largely financed via municipal revenues, followed by state government funding. More than 55% civic agencies said the entire IT budget (100%) is funded through municipal sources.

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.”

In the case of IT budget spends, huge variations exist in the proportion spent by different civic agencies. More than 40% reportedly spend in excess of 40% of their IT budget, while another 13% spend 31-50%. Conversely, about 33% reportedly spend less than 5% of their IT budgets. IT spends are evenly spread across different categories. Most civic agencies spend less than 30% of their IT expenditure on software, maintenance, upgradation and hardware. Around 45% spend more than 30% on hardware and software.

Most civic agencies expect less than 10% increase in IT budgets over the next two years; only two plan to have a hike of more than 50%. About 60% plan to increase IT budgets by only 1-10% during the next two and a half years. Less than 10% plan to hike the IT budget by more than 50% during the period in consideration; and about 11% plan to increase it by 11-20%. Over the next two years, IT budget increase in most civic agencies will be either in the 1-10% or 11-20% range.

About Schneider Electric:

As a global specialist in energy management with operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple market segments, including leadership positions in Utilities & Infrastructure, Industries & Machines Manufacturers, Non-residential Building, Data Centres & Networks and in Residential. Focused on making energy safe, reliable, efficient, productive and green, the Group’s 150,000-plus employees achieved sales of €24 billion in 2013 through an active commitment to help individuals and organizations make the most of their energy.

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