Education plays an irreplaceable role in the building of a nation and nurturing of its future leaders. A good education empowers an individual, and in turn, enables the nation to reform its economic condition. When it comes to India, the reach of education has improved over the past years, but when it comes to quality, India is still lagging behind when compared to developed nations. This difference in quality is more clearly defined when one compares education in the rural areas to that of the urban.
In light of the state of affairs of education in India, online education has come up as a beacon of hope in improving the education scenario. Not only does online education cover the entire school curriculum, it also provides students with the resources to prepare for a range of competitive examinations like JEE, CAT, GATE, etc. While it augments education in the urban sector to an even more enhanced learning experience, in educational institutions, it has opened up doors that previously had never even existed. With online education, students in rural areas can now access educational content that is at par with the quality of content available in urban schools. With the government’s backing, edtech startups will not only have the funding they need, but they would get more acceptance from the consumers as well. Hence, to promote digitization of education, the government has taken a number of initiatives to promote ed-tech startups.
Over the years, the government has taken a substantial interest in promoting edtech startups in India. Prime Minister Narendra Modi’s Skill India and Make in India campaigns are focused on empowering startups to bring development in their own hand. With all this focus on SMEs being the driving force in the nation’s progress, the edtech startups are not behind. This shift towards online education is a part of the Digital India campaign that aims to bring digital empowerment to all corners of the country through a variety of facets, with education being one of them.
Digitized learning promoted by Budget 2018:
The Union Budget 2018 brought a ray of hope for the edtech startups. In the government’s attempt to assist and provide an opportunity for every Indian to realise his or her potential to the core, the Budget 2018-19 brought on by the current Finance Minister Arun Jaitley has brought a focus on the industry of online education. The government has announced that it is now time to replace the traditional blackboard with a digital one. Many edtech startups are already working to change the face of online education in India. With an increase of 20.31% in the amount allotted to education in the 2018 Budget, the government’s shift towards digital education is a welcome change.
Startup India scheme:
Prime Minister Narendra Modi’s Startup India scheme entitles the startups registered with it to many benefits. These include access to Rs. 10,000 crore Fund-of-Funds, exemption from capital gains on sales of shares, benefits under public procurement regarding experience and turnover, self-certification spanning under nine different labour laws, exemption from income tax on receipt of investment at a price higher than the Fair Market Value, and income tax benefits for three consecutive years in the first five years of the startups. All an edtech startup needs to do to benefit from this scheme is to be incorporated as a Private Limited Company, LLP, or a registered firm. However, only startups that are less than five years old, and whose turnover does not exceed Rs. 25 crore are liable to benefit from this scheme.
One of the most significant challenges faced by edtech startups in India is the lack of funding. While the number of angel investors has been on the rise in the past few years, however, they cannot alone drive the funding. Therefore, the government’s move to create a domestic source of capital is a welcome initiative for edtech startups in particular. Under Fund-for-Funds scheme, the government uses Small Industries Development Bank of India (SIDBI) to give startups the necessary funding through the India Aspiration Fund (IAF). The SIDBI along with IAF was launched to cater to funding for start-ups and to aid small enterprises in India.
Government’s startup incubation centres:
Edtech startups can also raise incubation support and funding from the many government-supported incubation cells. According to Incubation Policy from Government of NCT, Delhi, startups, including edtech startups can apply for seed funding from incubation centres. The funds can then be used for team expansion, marketing, and to increase the startup’s footprint across multiple geographies. Aimed at promoting entrepreneurship among the youth, the Incubation Policy is focused on providing new-age startups with the initial seed money to pave the way for future success.
Online education is still at a development stage in India but is expected to grow exponentially in the coming years. Not only does it help its users with their basic school curriculum, but it can also be used for skill upgrading, language learning, and for clearing exams such as UPSC, GATE, IES, etc. The government’s announcement that technology will be the biggest driver in improving the quality of education is welcome news for edtech startup owners. The Union Budget 2018-19 has shown the government’s positive inclination towards edtech startups and has demonstrated that government is now recognising the benefits an online education can bring to the nation.