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Pre - Budget wish list from Mr G. Bala Reddy, CMD, ICSA India Ltd.

This budget needs to come up with measures that balance the high inflation and sustainable growth. The continuing fiscal problems and revenue deficit will force the budget to take stringent revenue making measures including looking at introducing or extending the stimulus packages to boost revenues. Similarly, restructuring, expenditure control measures must also be closely looked at to control deficits. The balance is a serious challenge during the times when the country’s growth is pegged at 7% plus. Finalizing tax reforms, private sectors incentive schemes in priority areas and measures to boost exports would have to be watched in this budget.

Infrastructure development in a few key sectors of the economy is the main growth driving force which needs heavy investments that creates sustainability. Such deployments should encourage public-private partnerships but with a lot of caution and a clear policy demarcation that will benefit the private sector in the medium term.

Power sector being one of the key sectors of the economy should be focused through a combination of incentives and direct benefits. India is in dire need for strengthening the power transmission and distribution sectors. More so, the distribution sector which needs to be strengthened in two ways:

Upgrading existing ailing infrastructure & building new infrastructure for expansion in both rural and urban sectors.
Strengthen the distribution by introducing technology into the network. This should be an ongoing exercise not just limited to a specific 5 year plan.

We expect 4 levels of benefits /incentives to boost the sector,

a) Special Tax benefits must be provided for companies engaged in R&D producing high-end technology and offering power technology/solutions, since this ultimately results in increase in revenues for the government.

b) Tax incentives must be extended not only to companies owning the power assets but for companies who are directly engaged in creating and deploying those assets. Only then the entire value chain will be sustainably developed. This is essential because infrastructure is a low margin business and huge turnaround time coupled with long sales to cash cycles. This phenomenon pushes companies to carry huge debts which hamper growth. Tax breaks for companies engaged in these operations will help grow faster with healthy operations.

c) Similarly, this growth drive will give rise to inorganic opportunities like mergers and acquisitions and therefore the government should consider benefits for companies/ promoter’s who sell off or merge into other entities which will help consolidation and boost the sector.

d) Due to the visible gap in target Vs actual capacity additions in all 3 sectors of power industry and resultant investment requirement for the next 7- 10 years, power sector also needs to be incentivized by giving tax benefits for 10 years be it in generation, transmission or in distribution much similar to that of IT industry which enjoyed 10 yr tax exemptions. This not only creates visibility to existing players but brings in new players while opportunity for investors to deploy more capital will be enormous.

About ICSA (India) Ltd.

ICSA (India) Ltd. provides hardware and software to power firms and electricity boards to tackle AT&C losses. Over 95% of its business comes from the power space and the rest from oil & gas, where it provides solutions for monitoring and protecting pipelines. ICSA (India) Ltd. is also in the business of infrastructure deployment services in transmission and distribution segments like erection of substations and lines. The company counts amongst its investors Goldman Sachs, Morgan Stanley and the Government of Singapore.

The company's product line includes: Intelligent Automatic Meter Reading System, Multiplexer Unit, Distribution Transformer Monitoring System, Substation Controller, Micro Remote Terminal Unit, Theft Detection Devices, and Pole Top RTU. The company has developed products suitable for power utilities in the field of Energy Management, Energy Audit, and Control applications and provides versatile Data Acquisition Systems using GSM, CDMA, and RF.

ICSA makes products, which primarily detect the where, how and how much are the AT&C losses and feed the impacted institutions. Armed with the vital statistics, affected institutions take the necessary steps to plug loopholes.

ICSA enjoys first mover advantage, having begun in FY 2004. It began developing embedded solutions for identifying and minimizing AT&C losses and monitoring power consumption. Its first product was IAMR or the Intelligent Automatic Meter Reading, followed by other products such as DTMS, TDD, iCAP, etc.

ICSA is addressing a critical segment of the economy, and a pressing concern. For more details visit www.icsa-india.com.

Profile

Mr.G.Bala Reddy is the Chairman and Managing Director of the company. He is a postgraduate in Social Sciences. A techno-savvy first generation entrepreneur with a great vision, he was instrumental in turning around a sick entity to a profitable corporate. Mr. Reddy was chosen to spearhead ICSA in 1998 and ever since, he has not only lent sound direction to the company, but also has taken the challenging responsibility of ensuring continuous growth to it. Under his able and dynamic leadership, ICSA has made enormous progress and has metamorphosed into a flourishing and vibrant company. It is Mr. Reddy’s acumen that has made ICSA expand the use of technology in the sectors such as oil, gas, mining, irrigation, transport and water utilities.