New Delhi: The Indian government is expected to spend $7.8 billion (over Rs50,263 crore) on IT in 2017, an increase of 7.5% over last year, research firm Gartner on Thursday said. This is, however, lower than Gartner’s previous projection of 9.5% growth this year.

“The 2 per cent revision in our outlook is primarily due to the effects of demonetisation and a drop in industrial production," Gartner Principal Research Analyst, Moutusi Sau, said in a statement.

Sau said that spending plans like affordable housing scheme, and increased loans to small and medium enterprises by the government, however, are likely to have a positive effect on IT spending in the next few quarters. IT services (consulting, software support, business process outsourcing, IT outsourcing, implementation, and hardware support) is expected to grow 10.8% in 2017 to reach $2 billion, making it the largest spend category.

The software segment — which includes enterprise resource planning (ERP), customer relationship management (CRM) and others — is forecast to grow 10.8% in 2017 to reach $1.1 billion.

Devices category of printers, mobile devices and PCs is expected to grow 10.4% to reach $1.1 billion.