The year 2021 has seen India witness a series of unicorns and will continue on this path in 2022, with many soonicorns on the waiting list. The overall sentiment has been quite positive in India in spite of the country being gripped by uncertain times under Omicron’s glare. Given the new contagion spread, and people's vested interest in online learning, increasing budget allocations towards technological advancement in digital education is the need of the hour.
This will help Edtech focus on what’s new and interesting for today’s learners’ right from K-12 to higher education. Increasing educators in the edtech sphere along with partnerships can help scale up the education ecosystem and help India in becoming the Edtech capital of the world. With the growing online learning ecosystem, the government should prioritize augmenting investments in advanced digital infrastructure in order to make it a world class standard digital infrastructure.
Online education is accessible to every learner across the globe or one can say we are on the precipice of very significant learning. Today, Edtech companies are going global through various mergers and acquisitions. The Phygital model of studying abroad with leading edtech players, offers learners access to develop the right skills and pursue their degrees while not worrying about traveling abroad and completing the same degree or equivalent degree at 1/10th of an offline cost.
Therefore, while the EdTech sector is solving for accessibility, learners would need a push to invest in such services and by extension their own futures. To provide this push, all the while fostering a culture of up-skilling and continuous learning, implementing policies that allow for tax deductions on the fees paid by the learners will go a long way.. Akin to investment instruments which are commonly used for tax deductions, tax saving policies in EdTech will act as an added incentive for learners, who will choose to invest in courses. Furthermore, similar to receiving tax benefits against education loans, the same can be replicated for upskilling programs to create and sustain the culture of upskilling and continuous learning. This will also drive up the Gross Enrolment Ratio (GER) and create a skilled workforce, which will only lead to a higher GDP.
Another important area the Union Budget should address is the skilling and training of teachers as part of the edtech policy, so that India can soon assume the mantle of ‘Vishwa Guru’. Edtech platforms are focused on training their educators who can relay their knowledge of the particular field, in the most engaging and enriching manner that allows the retention of complex theories. As Edtech offers scope for a variety of courses, enabling teachers & SMEs with skills to teach the courses will be vital, since teachers create significant impact on student learning. However, without the required support and training, they will not be able to cope with the technologically enhanced education space. Furthermore, the level of unemployment will also reduce, by training them on teaching subjects related to different areas of industry.
With India generating so many start-ups and unicorns, another critical issue that we expect the 2022 Union Budget to address is the ESOP taxation. Start-ups have been generating wealth creation opportunities for employees, to drive up shared ownership and productivity, through Employee Stock Ownership Plans (ESOP). However, employees are liable to pay taxes while encashing their ESOPs, without the option to set off gains against any future investments. This is where the Government can help improve the EdTech ecosystem by revising the taxation on ESOPs and making it at par with listed equity taxation. The risk for the exercise remains the same as it is for normal stocks. Tax reduction on ESOPs will help in bringing down the risk level associated with the plan and encourage employees to enroll for such schemes.
Recently, Prime Minister Narendra Modi declared 16th January as the National Start-up Day and the importance of these start-ups in India’s economic progress.
Cultivating an ecosystem of upskilling and continuous learning will go a long way in improving the country’s GDP on the back of a highly skilled workforce. Owing to the pandemic and its effects over the last two years, Edtech companies have played a big role in the education sector. Edtech companies have witnessed their customer base open up 20 times more and increase in traffic something similar to what ecommerce companies see. Online learners today have accepted edtech companies as their LifeLongLearning partner to upskill and have great career outcomes. But much of the outcome now lies on the upcoming Union Budget 2022 and we hope to see the benefits that will reap for the learners and their edtech partners.
Mayank Kumar is co-founder, upGrad.