Union Budget 2023: Ed-tech industry requires revamp to taken on global challenges

The Indian edtech market size is expected to reach US$ 30 billion by 2031, from US$ 700-800 million in 2021. India has also become the second largest market for e-learning after the US. The online education market in India is expected to grow by US$ 2.28 billion during 2021-2025, growing at a CAGR of almost 20%.

The education sector has seen a host of reforms and improved financial outlays in recent years that could possibly transform the country into a knowledge haven. With human resources increasingly gaining significance in the overall development of the country, the development of the country’s education infrastructure is expected to remain the key focus in the current decade. In this scenario, infrastructure investment in the education sector is likely to see a considerable increase.

K. A. Alagarsamy, director, Consortium for Technical Education (CTE), said, “To provide technical education to students in both rural and urban areas of India, various organisations, corporate and government departments, are collaborating by signing MoUs to support and improve the current system. These efforts aim to provide world-class skills to the market through institutions such as ITIs, Polytechnics, and Engineering Colleges, as well as by supporting employment opportunities for young people in the growing industrial sector of the state. The upcoming Union budget 2023 is expected to boost funding for Skill Development and Technical Education, particularly for semi-employed youth, in order to support these efforts.”

Through a variety of online courses, the EdTech sector offers students the opportunity to learn hands-on, bypassing the wait on-the-job training. By gaining both foundational and advanced skills online, students and professionals can improve their chances of pursuing a particular career.

A student’s decision to follow a traditional education path in the humanities, sciences or business used to determine their future. Interestingly, many young people today have the opportunity to redefine their careers, thanks to the development of online-based experiential learning.

“The pandemic has led to an increasing reliance of the public education system on supplementary education, especially those provided by private organisations. Under the Goods and Services Tax (GST), these have been categorised as "educational services" and taxed at 18 per cent. The government is expected to reduce this rate to 5 to 12 per cent this year, to allow EdTech companies to offer their services to consumers at a lower price. In addition, with India's increasing study abroad pool, students who wish to study in top international universities may be provided government assistance schemes (or scholarships). However, to prevent brain drain, a clause can be introduced requiring them to return to India and contribute towards India’s economic development., Inputs by Athena Education.”

Akshay Marwah, Co-Founder, AAFT Online said, “Fostering collaboration between education and creative Ed-Tech platforms is one-way government may support growth of creative and arts Industry. Provisioning incentives and resources in the upcoming budget shall be helpful in achieving the objective. Ed-Tech platforms that focus on knowledge sharing and skill development can help in local capacity building, support from government towards this shall help improve the quality of services in creative arts sectors. This approach will create a thriving ecosystem for creativity and innovation, enabling local talent to reach a global audience and drive the growth of the industry.”

Beas Dev Ralhan, CEO, Next Education said that “In recent years, the education sector has experienced a slew of changes and increased financial investments that have the potential to transform the country into a knowledge haven. For approximately 250 million school-going kids, the Government of India has made steps such as the National Accreditation Regulatory Authority Bill for Higher Education and the Foreign Educational Institutions Bill. In India, 100% FDI (automatic route) is permitted in the education industry. After the United States, India has become the second-largest market for E-learning. Certain issues confront the sector as a result of poor internet access and inadequate infrastructure. There is also a lack of training for online preparation, as well as an imbalance in the teacher-student ratio in the online classroom. This industry has the potential to significantly contribute to attaining the objectives, creating a highly efficient ecosystem, and empowering the next generation.”

Sarvesh Shrivastava, MD and Co-founder of Eupheus Learning, said, “The National Education Policy 2020 aims to bring a digital transformation in imparting Pre-Kindergarten to 12 education which is laudable and much needed. However, while textbooks are tax-free the same policy is not applicable to digital initiatives by the schools and is taxed at 18%. The new budget should correct this anomaly to give a fillip in accomplishing the vision of NEP-2020.”

Gaurav Goel, Co-Founder and Chief Executive Officer, Toprankers said that the ed-tech segment foresees the upcoming Union Budget 2023 with the backdrop of the emergence of remote and hybrid learning in the Indian education landscape. "The industry also oversees significant announcements from this budget to drive investment in this space along with favourable regulatory measures to build a conducive environment for digital learning. We believe that the government should envisage such a framework that promotes the collaboration of startups with government agencies to build capacity, share knowledge and ensure the nation's holistic development," Goel added.

A large emphasis was placed upon skill-training in the new National Education Policy, especially regular training for students to develop core competencies and employability.  However, it remains a challenge to overcome the barriers of accessibility and implementation of such skill training programs. In order to achieve a systemic change, it is necessary to build capacity within the system, which, in turn, will require more efficient budgeting. Our industry needs to align skills according to job requirements, which can be achieved by mapping out the relationship between industry demands and supply of vocational courses.