Budget 2022: Edtech startups demand lower GST and greater govt effort to bridge digital divide

The rapid growth has come with controversies. The allegations range from misselling to misleading advertisements and confusing payment structures.

Flags have been raised about how this hyper-competitive sector is going about growing its business. In a bid to bring in self-regulation, leading edtech companies have now formed the Indian EdTech Consortium (IEC), which will work under a common code of conduct and establish a two-tier grievance redressal mechanism.

This move to self-regulate also follows growing concerns expressed by the government. The Education Ministry even issued an advisory, cautioning parents and students about possible violations by edtech companies.

With India's 'Next Half Billion' wanting better opportunities for learning and upskilling, edtech startups say they can play a critical role in bridging the digital divide with support from the government.

Rachit Agrawal, Co-founder and Director, AdmitKard: This budget, we expect to see the Indian economy moving its focus to building stronger capabilities in the school infrastructure to enable the hybrid model of education which has become essential in the recurring pandemic scenario. Additionally, early education needs to get more tech-enabled and we expect that should work in favor of the EdTech community.

Anil Nagar, Founder and CEO, Adda247: The government should lower the GST while focusing on creating strong digital infrastructure to improve the quality and experience of online education for students in cities as well as remote areas. The government should also forge alliances with edtech companies to accelerate the learning outcomes with the help of cutting-edge technologies in the education ecosystem.

Vaibhav Singh, Co-Founder, Leap Scholar: The 2022 budget is expected to have a higher focus on the edtech sector as a whole, with significant investments to enhance greater access to robust and improved digital infrastructure. The GST for educational services is expected to be brought down to 5 percent from the existing 18 percent, to increase accessibility and feasibility for students from lower and middle-class families. With greater internet penetration, the upcoming budget is expected to announce various initiatives to accelerate digital innovation in the edtech sector.

Ruchir Arora, Co-Founder & CEO, CollegeDekho: Quality education is a key driver for a nation’s economy and we want the upcoming budget to focus on improving the Gross Enrollment Ratio (GER). With the current GER standing at 27.1 percent, there is a huge push that is needed to ensure that we reach the target of 50 percent GER by 2030 as mentioned in the National Education Policy, 2020.

Karanvir Singh, Pariksha: We really would like the government to consider the tax structure on ESOPs, such that it be taxed only at the time of sales and not at the time of exercising, as the case currently is. Additionally, a centralised Professional Tax system on the lines of GST will further help, and increase the ease of business for startups operating in multiple states.

Hemant Sahal, CollPoll: Reduce GST substantially, if not completely waived off, on educational services including technology solutions which became the backbone of our institutions during the pandemic. This has been an ask for a long time and I feel the time has come for the government to make it happen. Another key change I am looking forward to in the budget 2022 is a clear plan to bridge the digital divide in public schools and higher educational institutions.

Sahil Miglani, Geekster: The pandemic has changed the way learning happens and fast-forwarded the adoption of online education by 5-10 years. Delivering quality education to every town and village of the country is now possible, provided we improve the digital infrastructure. We expect the government to revisit the high GST on education related services, and overall higher budget allocation to this sector.

Himanshu Tyagi, CEO & Founder, Digikull: In India, any skill development related service must come under the lowest tax slab. The government should revisit the 18 percent GST on skilling, which is very demotivating for the students who want to gain skill-related education. Even the loans related to education must be provided for lower interest rates.