Ravi Money, Chief Financial Officer at mPowerO, has over 30 years of experience as a Chartered Accountant and worked in various industries such as retail, Consumer Durables, Telecom, Food, Automobiles, and Oil & Gas sectors in various leadership roles. He is a qualified Chartered Accountant and a Bachelor of Commerce from SIES College of Arts, Science & Commerce.
The forced pandemic-led lockdowns have shown the relevance and efficacy of online learning, as a supplement to traditional forms of learning and the upcoming budget is the right relevant opportunity to narrow this divide, by introducing schemes that could make e-learning more widespread, through incentives to schools, and, students who invest in smartphones and other digital learning tools.
Although the ongoing Pandemic has presented an irreparable blow to the startup system in the country, many companies are seeking the help of investors and the Government, for more possible assistance and relaxations. With the growing uncertainty, investors are still hesitating, and hence the Government should step in and provide more steps to enhance and further boost the EdTech sector in the country.
Education is one of the major progressive sectors for a Country’s economy promoting understanding, vision, creativity and productivity of its people. In India, education is provided both by public as well as private sectors. Convenience and cost efficiency are the two primary drivers of online education in India.
Education is important for everyone and eLearning, given in a controlled way to schooling, with anytime anywhere access at the ease of convenience in an interactive manner with various content forms, will increase the reach of high quality education.
The Future of EdTech in India is decoding the $10 Billion market opportunity (market size by 2025):
As per Sources of TRAI, IDC, Ookla India’s Internet Economy in a nutshell is:
Total Number Of Internet Subscribers: 743 Mn (March 2020)
Average Time Spent On Digital Media: 1.39 hours (2020)
Average Mobile Internet Speed: 12.08 Mbps (July 2020)
Surge In Average Mobile Internet Speed Compared To Previous Quarter: 9.8% (2019)
Domestic sprouts have become crucial for economic development. Emerging as the third largest economy in the world, India has a nominal number of unicorns (a $ 100 billion company). By 2020, only 11 companies have reached this level. If startups are to thrive, the Government needs to provide tax-deductibles in addition to providing easy lending in the budget.
A National Sample Survey (NSS) on Household Social Consumption stated that there is a 26% surge in out of pocket expenditure on education between 2014 to 2018.
There are around 4500 Edtech startups in India and 30 million users right now as we speak. 8 out of 38 Edtech startups are EBITDA positive.
Government should invest in technology enablement and programs to digitally reskill and upskill India’s workforce as it gears up for an AatmaNirbharBharat Abhiyan (Self-SufficientIndia Programme).
The CAGR of Edtech market size during 2020-2025 is 39%:
Indian government’s foremost priority is to provide low-cost education to one and all. That’s why the education sector enjoys lots of tax exemption as they are not taxed or come in negative lists. The most important thing is that educational services and services related to education or higher education provided to the students are covered under the GST exempt list. The educational institutions that have been granted the exemption from GST are pre-schools and higher secondary educational institutes – both private and Government.
Despite the launch of several startups in the education domain, their share in the overall $100 Bn education industry in India has remained low. Investors have also remained bullish,going by the multiple big-ticket funding rounds in various startup Edtech companies.
The only solution to this scenario is that the Government itself should become the Venture Capitalist and devise strategies to make digital education accessible both with sufficient funding and also leveraging the technology aspects.
EduTech buds have registered a growth of over 300 percent, with traditional teaching coming to an absolute halt in the schools, in the wake of the forced pandemic lockdown. The following aspects are recommended as, Collection of Online tuition fees at schools has become a major concern for higher management at various schools:
- Tuition fees paid for children’s education can be shown under IT exemption (Section 80C)
- Also exempt from fees paid, correlating to online course and tutoring institutions. ‘Parents have spent a lot on smartphones and laptops. Announcing a GST exemption in the form of relief for online courses will reduce the burden on Parents (rationalisation of GST)
- Making investments in budding startup companies as a part of corporate social responsibility will also enable them to provide digital tools at a discount to children
- Facilitation of NBFC loans with low-interest rates
- The start-ups in the e-commerce business should be able to attract foreign investment
Tax rules should be simplified for venture capitalists across various sectors without any hassle and are to be made easy for start-ups to get approvals.
Exempting eLearning will also help education to penetrate and more into the remote areas with affordable smartphones and easing off certain technological barriers, in making eLearning feasible at lower bandwidths.
Skilling should also be exempted and private players should be encouraged for enhanced opportunities and overall skill development meeting the goals of the AatmaNirbharBharat Abhiyan (Self-SufficientIndia Programme).
It would be better to provide special exemption in income tax along with GST for some years as revenues with Corona have declined and with booming sectors such as EdTech in India, the tax exemptions will further enhance the prospects and hence the users to a greater extent, thus bringing more opportunities.