Enterprise IT Budget Planning in India: How Much Should You Spend on Technology?

IT budget planning in Indian enterprises is typically reactive — shaped more by last year's spend and what can be justified politically than by a structured framework aligned to business value. This results in consistent patterns: underinvestment in areas that produce high ROI (security, data quality, ERP optimisation), and continued expenditure on systems and vendors that have long since stopped delivering value.

IT Spend Benchmarks for Indian Enterprises 2026

IT spending as a percentage of revenue varies significantly by industry for Indian enterprises. BFSI companies typically spend 6–10% of revenue on IT (the highest of any sector, driven by regulatory requirements and competitive digital differentiation). Manufacturing companies typically spend 1.5–3% of revenue. Professional services firms spend 3–5%. Healthcare companies spend 2.5–4%.

For mid-market Indian enterprises (₹100–1,000 crore revenue), the typical IT budget runs ₹1.5–5 crore annually including both CapEx (hardware, major software) and OpEx (licensing, cloud, support, staff). Enterprises significantly below these benchmarks are typically underinvesting in ways that create compounding operational risk.

The Budget Allocation That Produces the Highest ROI

The spending allocation that produces the highest ROI in Indian enterprise IT: 35–40% on maintaining and optimising existing systems (not just keeping them running, but actively improving them), 25–30% on security (this is typically the most underinvested category in Indian enterprises), 20–25% on new capabilities and transformation, and 10–15% on infrastructure and capacity.

The most common budget allocation mistake is spending 60–70% on maintaining existing systems while underinvesting in security and optimisation. Systems that are maintained but not optimised gradually become more expensive to operate and harder to change.