Budget 2022: Here’s what the education sector expects from the government

Considering that blended learning and edtech will remain the way forward for the education sector, the players in this space are expecting a host of measures and initiatives along with an increase in their allocated budget, this year.

Budget 2022 - Here’s what the education sector expects from government

With the education sector continuing to be impacted by the COVID-19 pandemic, hybrid learning has become the new normal. And a return to classroom education in not yet feasible given the current situation. In the last budget, the government had already prioritised the education sector and had invested in various initiatives like Disha, Swayam Prabha etc.

The most significant development in the education sector was the announcement of the National Education Policy. As the unveiling of the Union Budget 2022 approaches, educators are expecting the government to facilitate increased allocation for this sector to assist in the NEP implementation.

Also, this year the experts are wishing for a slew of measures to augment public and private financing for infrastructure growth, a framework for setting up branches of international campuses and a reduction in taxes.

Meanwhile, during the course of the pandemic the industry has grown by leaps and bounds because of digital transformation, which has given a significant boost to the country’s edtech industry. The start-ups and companies in this sector are hopeful for an education budget that will induce more growth and serve to mitigate the challenges.

The sector is wishing for an increase in their annual allocation

Last year, a budget allocation of Rs 93,224 crores was announced in the budget for 2021. Which was 6 per cent lesser than the Rs 99,311 crores in the year before that. Educators are hoping that the fund will be larger this time, given that the sector has undergone such a paradigm shift in the last year.

“The transition from the traditional way of learning to online classes has helped the EdTech start-ups to grow at a rapid rate and this trend will most likely continue for years to come. This is why the stakeholders in the EdTech business have high hopes from this year’s budget and are expecting the Government of India to increase the expenditure on education in this year’s Union Budget,”

says Awal Madaan, CEO and Founder, AwalEnglish.com, an English learning platform.

Lehar Tawde, Co-founder of ConnectEd Technologies, an edtech social enterprise is hoping for the same thing. “We expect the government to increase allocation by around 10 per cent, since last year the 6 per cent slash was attributed to fund allocation towards healthcare and other emergency services,” he says.

A bigger fund allocation will help make digital education accessible to the rural sectors by ensuring the availability of high-speed internet connectivity, laptops, and smartphones, etc. Either through programs executed directly by the government or through the Public-Private Partnership (PPP) model.

With similar views and expectations, Akshay Chaturvedi, edtech start-up founder at LeverageEdu also wishes for more expenditure to be done in this sector from the budget this year.

He says that the onset of online education has worked well for the minority that can afford it, but it has not been the case for a larger part of the country which is facing an absolute crisis on this front. And an enhanced budget can certainly do a lot to mitigate this situation.

Inside article-Budget 2022 - Here’s what the education sector expects from government

A reduction in the digital divide

There is plenty of data that shows that the digital divide in India is alive and well. An uncertain number of students don’t have access to the relevant technology. And throughout 2020 and 2021, the impact of this digital divide on our education sector was devastating.

Also, with the government announcing coding as a mandatory subject now for classes 6th and above, this digital divide has once again come to the forefront.

“We as a country are not ready to use western platforms and infrastructure to make everyone learn because 88 per cent of the students do not have access to laptops, hence, they are unable to get the education that they are expected to receive,” Mridul Ranjan Sahu, Co-founder of CuriousJr tells us.

The government needs to empower the companies who are making education possible for everyone across the country, especially mobile based learning companies that have a broad reach and the capability to make quality education accessible to the masses, he further adds.

Educators are hoping that from this budget, the government will focus on reducing the digital divide.

“The digital divide has kept a significant number of students, that rely on the country’s public education system or belong to challenged socio-economic backgrounds, from accessing education during the pandemic. We have already seen states like Uttarakhand, Uttar Pradesh and Gujarat provide devices and connectivity to needy students for free, or with heavy subsidies. We expect the central government to address this issue to ensure that all students can resume their classes virtually,” Tawde asserts.

Chaturvedi too says, “Devices for students to study from, a distribution system that gets them these screens in real time or putting together well-taken-care-of sanitised schools for those who can’t benefit from the online system, and a lot more is needed.”

He also feels that the education industry should encourage more students to become global citizens to benefit from the diversity of global programs in countries that are our friends like the UK, Australia, Canada, the US – which in turn will help India to conquer the world as a soft power.

Maninder Singh Bajwa, CEO and Founder of iScuela, an edtech start-up says that increased support towards start-ups and small-mid enterprises in the edtech space can help resolve this issue.

“With increased focus on e-learning in the public sector and continued internet penetration there will be various initiatives accelerating e-learning programs across the nation. This will slowly but surely go a long way in bridging the digital divide,” he says.

Go easy on taxation and GST

GST is not applicable on primary, secondary and college education considering that it is an essential service–and so the tax cannot be passed on to the students. But the pandemic has pushed schools and educational firms to go online, resulting in heavy investments in IT infrastructure. Now they must absorb the cost of GST.

Also, students are heavily relying on supplementary sources of education that are provided by private organisations. Traditionally, such sources have been categorised under ‘Educational Services’ and are taxed at 18 per cent under the Goods & Services Tax (GST).

The stakeholders are demanding a rationalisation in this GST, which was their demand last year as well. “The GST rate cut from 18 per cent to 5 per cent will encourage more people to invest in education,” opines Divya Tej Pereira, Founder, Tutrrd, a one-on-one platform for after school tuitions.

“Revising the GST rate for this category to 5 per cent, will ease the financial pressure on the students’ parents, particularly those from lower- and middle-class families,” says Tawde.

The publishing community is also hoping for the GST rate to be cut.

“As publishers, we would urge the government to reduce GST on the printing of books and related raw material to 5 per cent and remove the reverse charge on royalty payments to authors. Also, in recent times, prices of devices like tablets and laptops have gone up. Therefore, we would request the government to announce subsidies on the same which would benefit students, teachers as well as schools,”

urges Monika Malhotra Kandhari, MD of MBD group.

She also hopes for relief on the taxation front. “The upcoming budget should make COVID-19-related expenditure fully tax-deductible this year, as many private companies have had huge COVID-19-related expenses over the past year in the form of employee pay-outs, CSR expenditure, etc,” she elaborates.

The sector wants a regulatory body

The education industry is also hoping for announcements on regulations and a framework to help the edtech sector flourish.

Pereira says, “The government should create an umbrella body which will regulate and create a framework for the booming edtech space. This body will help streamline the edtech space and make sure that fair practices are in place.”

Pratham Barot, Co-founder and CEO of Zell Education, a Mumbai based edtech firm also advocates for a government body. He says, “It is extremely important to focus on having a regulatory body for the sector in place. This will provide transparency and give confidence to the consumers and avoid the establishment of a monopoly by certain players in this sector.”

There is currently no government-regulated body for the edtech sector. However, as the edtech sector comes under scrutiny, a few edtech firms have formed a self-regulatory body under the auspices of the Internet and Mobile Association of India (IAMAI), which is known as the India EdTech Consortium (IEC).

More partnerships will benefit the sector

Given the utility of education-technology (edtech) tools during the pandemic, the edtech players expect the government to announce a host of schemes this year to make tech tools accessible to students across the country.

These schemes could pertain to Public Private Partnerships (PPP), subsidies or Direct Bank Transfers (DBT) to enable citizens to procure devices, connectivity and even subscriptions to educational services that will enable them to garner knowledge amidst the closure of their educational institutions.

“With an increasing demand for upskilling and reskilling in the pandemic era, fintech companies and the NBFCs are playing a huge role in making finance accessible to learners across the country. The government’s support and efforts to further boost the edtech sector will benefit the end consumers in a big way. With organisations looking to hire a more skilled-based workforce who are job-ready along with having a degree, the sector will continue to grow at a steady pace,”

says Varun Chopra, CEO, Eduvanz.

Besides that, the government should encourage the educational institutions to collaborate more with academia to ensure that the given curriculum meets the demands of the industry.

“This will require special recognition and concessions for academic institutions for collaborating with industry to prepare students for the workforce with the necessary skills and competencies. This will assist in bridging the skills gap that exists in the majority of industries, as well as assisting students in not only surviving but thriving in the turbulent and uncertain future,” opines Ashwani Awasthi, Managing Director, RICS School of Built Environment.

Pereira recommends that the government should come up with more initiatives like the National Educational Alliance for Technology (NEAT) initiative specially focused towards the k-12 segment. “This will give space to technical education regulator AICTE and dozens of edtech firms to work together in collaboration. Edtechs can act as true allies to the government and create an education ecosystem which can help multiply government investments and accelerate learning outcomes,” he suggests.

He also adds that the budget should also look at launching an edtech focused fund which will help small and mid-size ed-tech companies to raise the much-needed money for a faster scale-up and better experience using tech. These edtech firms can later become collaborative partners and work with the government to reduce learning loss and provide education to all.

A reduction in loan sizes

Last year’s budget announcement made room for a reduction in minimum loan sizes which helped both organisations and individuals. “We hope that this year’s budget will include allowances for Non-Banking Finance companies, helping us to expand and maintain cash liquidity in this competitive ecosystem,” Pereira adds.

Talking about the education loan size, Awasthi demands for a reduction in interest rates. “At the moment, a student education loan and a car loan have the same interest rate. There is a need for the government to subsidise student education loans to make it easier for students to seek higher education,” he says.

Other areas where this sector requires more focus

From implementation of the NEP, reskilling or health and hygiene, the educator’s list of prime focus areas is indeed quite big.

Rohit Manglik, CEO of EduGorilla expects a slew of measures from the budget. “Amid accelerating digitisation in education, the union budget should also prioritise strengthening IT infrastructure ahead of the 5G rollout. Edtech start-ups are playing an instrumental role in sustaining learning amid the pandemic. Hence, access to funding and networking avenues for edtech start-ups will further propel the sector. Moreover, strengthening data protection will help reap the benefits of e-learning,” he says.

Stakeholders are emphasising on NEP implementation and upgrading teacher’s capabilities.

According to Pereira, the implementation of the NEP 2020 and schemes on the lines of Ayushman Bharat should be implemented by the government. This will play a huge role in improving the quality of education in the country, he says.

“Even if online education is growing, unfortunately, a lot of teachers are still not equipped to teach in such an environment. There should be a share allocated towards education that goes into developing these skills for all tutors,” he adds.

Barot also hopes that the government will direct its resources towards the implementation of the NEP, in building teacher capacities and in augmenting health and hygiene at school levels. It should also focus on the implementation of edtech policies for all students, he says.

Kandhari of the MBD Group highlights another genuine problem that the publishing community is facing and hopes that the government will do something about it.

“The government should not change the syllabus for the next year as there is a lot of stock which is available with all publishers and a change of syllabus will lead to the scrapping of stocks by the publishers who are already facing a hard time due to the closure of schools during COVID-19 in the last 2 years. We are hopeful that the upcoming budget must set the tone for strengthening the education sector to be future-ready,” she says.

Overall, the education industry sees the upcoming Union Budget 2022-23 as a watershed moment in many ways, as a result of the despair that gripped the country during the previous fiscal year.

It has the potential to lay the groundwork for a long-term fiscal development path that will allow India to realise its dream of being a flourishing economy. Also, the stakeholders are hoping that this year the economy will be revitalized, after being severely harmed by the pandemic.

In this regard, a good budget will go a long way in helping this sector to emerge from the negative factors which were weighing it down and will help sustain growth and bring back prosperity, opines the education sector.