Education is always a critical sector in any economy. More specifically, improvement in education has been linked to increased economic growth. It’s then imperative to increase spending directly or indirectly towards education in all forms. The economic impact of increased spending on school/ graduate education or up-skilling, all lead to better outcomes for the economy.
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India: The status quo
India is at a very unique advantage today, with high internet and smartphone penetration, bottom heavy pyramid in terms of the age of the population, and also large absolute numbers. At the same time, we do have problems that we need to focus in the education system to improve it.
Firstly, a lack of infrastructure in schools is one issue, given that we are moving into the digital age, schools need to be equipped with technology so that learning outcomes are faster and better for students. Student learning, progress & monitoring via smartphones etc can take place.
There is also a gap between the knowledge gained in college versus the requirement in the job market, e.g. it is known that India produces 2 Lakhs+ computer sciences graduates every year, but the number that can write code is about 10k. The need for upskilling is very apparent, to make students job ready or even the working class to get them to acquire new-age skills.
The cost of higher education in India also pushes many students out to look for jobs rather than skilling themselves further. Given our demographics and the focus on economic growth, it is imperative to ensure through policy-making we make education more widely available and accessible with various initiatives. Even if one looks at the investment in education, there is a long way to go.
The National Education Policy, 2020(NEP), lists a target of investment in education to be 6% of GDP. We are currently at 3.1% of GDP. Most developed economies around the world are near 6% or higher. Last year’s budget had increased allocation from 2021 levels by 11%. Higher spending in the budget towards school and university education would go a long way in bridging the gap. A higher spending on education would be more of an investment and need of the hour given India’s demographics.
Expectations for online
Another expectation is increased government funding and support for online initiatives. The last 2 years had a significant impact on the education sector, from increased technology adoption to easily accessible online education and adaptable degree programs. Further support from the government on subsidized rates and incentives for all, would encourage innovation and growth in this sector.
Tax incentives and financial benefits for edtech players will boost the ecosystem substantially. Additionally, any opportunities for collaboration with edtech companies to increase digitisation/penetration would help all involved stakeholders.
Infrastructure enhancement at schools by various means would help in improving the overall edtech scenario. Schools getting smart boards, computer labs, or similar technology support directly or subsidisation in its purchase would help. Technology upgrade and a strong digital infrastructure to improve the quality and experience of online education for students in cities as well as remote areas are key.
While startup India has programmes, funding for edtech start-ups working towards objectives that help India would also be helpful. Forging alliances with edtech companies to accelerate the learning outcomes with the help of cutting-edge technologies in the education ecosystem would help in upgrading the level of education in tier 3,4 and beyond cities.
Overall, the EdTech community in India is likely hoping for a budget that recognizes the importance of education technology and takes steps to support its development and adoption, paving a path to
making it the biggest in the world.
Upskilling- In India, after-school support programs, exam prep programs, or regular support programs are very popular. Even if one looks at the job market, there is a gap between the knowledge students have and the on-job requirements. Also, the fast pace of technological development ensures that existing workers have to upskill themselves. There are many companies and start-ups which are focussed on upskilling. The cost of upskilling courses is expensive and requires an investment from the learners.
Making these more in reach would benefit all stakeholders. Today, the GST rate on all education services is 18%. Close to 50% of the population in India is below 25 years of age, where education is key. Lowering the tax rate would make education more accessible to all and support the entire Edtech ecosystem.
Education loans- A lot of students take student loans for graduate education as well as upskilling. This is a market growing at 12% and will continue to grow. While banks and lending institutions would need to keep NPAs under control, reduced interest rates or subsidies would help students and a larger number of students would be able to access courses to uplift themselves.
Legal framework- Today, section 80C is available to claim dedication for tuition fees, but this is not exclusive, it is fungible across provident fund contributions and PPF, home loan repayment, life insurance premiums etc. Some specific breaks could help the education sector further.
The Indian Edtech industry is one of the biggest in the world, last year by investment it was the 2nd most funded country by VC investments (USA being 1st). Given the macroeconomic conditions and the current state of the Edtech industry, a good budget would be a much-needed shot in the arm.
(The author is the Founder and CEO at PurpleTutor)
