Tax Reductions To Online Classes – What Do Education Experts Expect from Union Budget 2021?

By : |January 18, 2021 0

Union Budget 2021 expectation for education: Industry experts believe that to revive the education and edtech sector in the country, government support is necessary, not just in terms of monetary support, but also in terms of formalisation of the online education sector. They have talked about the increasing shift to online education, taking up of extra academic courses and other “new normal” activities that the edtech sector has seen.

Industry stakeholders also expressed their hopes of the government taking into consideration the changing career choices of the youth and planning out the Union Budget 2021 accordingly. Here are four industry experts seeking the stated changes in the Union Budget 2021.

1. Sumeet Jain, Co-founder, Yocket, states

EdTech companies expect help from budget 2021 for various tax cuts, easier credit access, and other benefits to cope with the Covid-19 pandemic. Insights reflect precisely how EdTech companies developed in 2020. Therefore, the EdTech sector expects a few alterations in the budget for 2021.

GST reduction in online courses and career counselling

Taxable supply implies an inventory of products or services or leviable to tax under GST. Likewise, the administrations given by an educational foundation to its aspirants, personnel, staff, or educational institutions are not needed to be burdened under GST. This may hamper the career choices and opportunities and may affect the country majorly. Educational institutions and courses are being taxed 18%, which should be reduced to around 5%.

Scholarships for the higher education fund

The significance of education is very precious in the lives of people as well as countries as well. This is the exact motivation behind why numerous organizations have begun offering scholarships to meriting and praiseworthy aspirants. Presently, with the assistance of study abroad scholarships accessible for essentially every course, the government shall provide more scholarship opportunities for deserving candidates that can seek help in their determinant decisions for the choice of career courses and University.

Development in digital courses/online learning

Education on digital platforms is not being upgraded because the government does not take the initiative to collaborate with EdTech firms and companies to seek help and keep up the pace with technology. Therefore, the government should cope with edtech companies to provide technology updates to assist in better online learning and provide effective results. Govt should set out a special fund for developing online courses. These courses can be provided to the larger public at subsidized rates. The courses can be of small duration, having full-time access to specific topics that can help students from smaller towns and cities. These courses should also be recorded and made available in regional languages so that the growth of different socio-backed children doesn’t get hampered.

Preferability for online courses

Many schools and universities do not yet favour online courses. Teachers and school authorities do not advise students to opt for online courses. Hence, the majority of students are unaware of the opportunity of online learning programs and benefits. The government should step in and help in boosting the awareness of online learning courses and promote the online learning platforms making it sound credible for students and parents to accept. Also, the students face unprecedented challenges in understanding the digital infrastructure, so an awareness around the same should also be done to help society at large.

2. Rajeev Tiwari, Founder of STEMROBO Technologies, opines

Increase focus on Innovation and IPR in Education at the School Level

The Union Budget 2021 can focus on a more comprehensive and extensive way our young students in the K-12 segment get exposure to Innovation and Tinkering while in school. Therefore, by the time they graduate, we have some real innovators at our doorstep. It is high time the Indian students and professionals get a boost in recognition of their innovations via Intellectual Property Rights (IPR). There has to be a culture within the country to promote brain gain.

Considering this, there’s a government scheme of developing Atal Tinkering Lab through which around 5000+ ATL Labs are already set up, but given the fact that there are 1.5 Million+ Schools in India, there is still a lot that needs to be done. Undoubtedly, the establishment of thousands of Atal Tinkering Labs across 715 districts of India enabled students from grade 6 to grade 12 to learn and experience the tinkering tools and equipment and develop innovative projects to solve community issues like never before.

India improved its ranking in the Global Innovation index to 48th in 2020 from 52nd Position in 2019. But still, there are many requirements to be done if we have to take Innovation at the grass-root level and make it significant for the masses.

Reducing the GST Rate

Govt has been giving so much emphasis on the penetration of Digital Services and Financial Inclusion in the BFSI Segment. Still, as far as Education is concerned, only the Conventional School Education has been kept out of GST. Innovation and Tinkering based Ed-Tech firms still have to pay GST @18%. There should be some provision wherein they need to pay Reduced GST@5% or so.

Push Towards Technology-based Learning Wherein Quality of Education Delivery is Effectively Monitored

Until now, the emphasis in Education Delivery for the Government Sector at the K-12 level has usually been on Quantity, Improving Education Scope and Spread. However, there seems to be a growing need for Indian students to organise themselves and be serious about their companions worldwide. To achieve this, the Technology-Oriented Curriculum Delivery, based on technique, pedagogy in line with the demands of the 21st Century Skills, should be assimilated in our Education Delivery for K-12 Students and Schools. The Union Budget 2021 should allow for improved accentuation and discretionary designation to resolve these concerns.

Enhancing Teachers Capacity and Skill Building

There is a shortage of millions of teachers in our education system. At the same time, there is a need to update and redesign current teachers’ qualifications so that they can train their aspirants for the demands of the future. Union Budget 2021 should also include provisions and proposals for Teachers’ Abilities, taking into account the digital sustainability, development, enhancement and acceleration of the study patterns.

3. Anoop Gautam, CEO & Co-founder, Tinker Coders, observed

The pandemic has turned around the entire situation in the education sector. The transition from traditional learning to digital methods has helped in the growth of EdTech startups and existing companies. We all have witnessed a significant surge in the usage of online courses, e-learning platforms and language learning apps, coding for kids, skill development among the youth and video conferencing tools for kids. Though the EdTech sector was already gaining momentum over the past few years, the pandemic catalyzed the complete situation and brought it under the limelight. The budget allocation for the EdTech sectors should be increased by at least 7-8%, compared to the previous year. Union Budget 2021 should favour the education sector. It will give the companies more thrust and motivation to develop innovative solutions and provide promising opportunities for establishing unicorn startups in the EdTech sector.

Digital Education: The New Normal in the EdTech sector

2020 saw how schools, colleges and institutions were shut entirely, with students and teachers having no other option left than going digital. Even the school teachers and students demonstrated tremendous adaptability in adopting online learning methods. This opens new horizons for EdTech startups. The introduction of NEP 2020 focuses on extracurricular and vocational learning with no separation from academic streams across the country. According to NASSCOM, India’s ed-tech market expects to rise to $3.5bn by 2022, which will be a good sign for normalizing our country’s economic curve post-pandemic.

Tax cuts on the education sector

The current taxation of 18% on the EdTech sector can be reduced to a lower percentage so that accessible quality digital education becomes a viable option for students coming from all sections of society. The recent months have witnessed the maximum funding during this pandemic in the EdTech sector, which is also a direct result of increased awareness. The EdTech sector’s growth is going to be prominent in the months to come as students and teachers are accustomed to online learning tools. Decreased taxation can eventually help the EdTech sector to expand horizontally and revolutionize the education system.

Expectations regarding the startup sector through Union Budget 2021?

The importance and impact of MSMEs on the Indian economy are well evident from the fact that the MSMEs contribute to providing employment, attracting foreign investments and substantial contribution to the GDP of our country. India is home to around 63 million startups, as per the data from the MSME ministry. Considering the reports from CII, MSMEs contribute approximately 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities and 33.4% of India’s manufacturing output. They also employ around 120 million persons and contribute around 45% of the overall exports from India. The facts are convincing enough about the importance of MSMEs in supporting the GDP of India.

As the Union Budget 2021 will be released, the Modi government should focus on crucial points for MSMEs and startups. The taxation scheme for MSMEs should be revised and reduced, as it will provide more opportunities for MSMEs and startups to escalate more rapidly. Besides, the loan approval process for MSMEs should be simplified, and collateral-free loans should be provided to startups and MSMEs. Many MSMEs remain unable to implement potential ideas due to the lack of initial funds or investments. The year 2020 witnessed record-breaking funding in the EdTech domain. The EdTech sector should also be included under the benefits availing scheme for MSMEs, as it will provide a better ecosystem for startups to scale and promote quality education.

Education budget be given more priority over other areas of concern to balance the mismanagement of COVID-19

Since the pandemic’s dawn, we have witnessed everything from how economies have collapsed and are now recovering in the past one year. Be it the IT sector, Entertainment industry, FMCG industry, Automobile industry and many other sectors are now gaining momentum as the vaccination program continues to escalate across the globe. However, one sector that remains affected is the education sector. Though institutions have adopted online learning methods, the normalcy in the education sector is still very. Despite the efforts being put by the private companies and the government, we still lack to find a solution for all the country students. E-learning is still a challenge for students coming from socio-economically weaker sections of society.

In the same light, in the Union Budget 2021, the education sector should be given more priority, so the effects of Covid-19 can be normalized. Underprivileged students shall be given more learning tools and opportunities to adapt to digital learning methods. More robust platforms should be developed and curated for students to learn with ease and discipline. Moreover, skills like problem-solving, creativity and computational thinking are crucial for the 21st-Century kids to face future adversities, just like the COVID-19 pandemic.

The regular classes of basic academia should be the point of focus for India’s government, as new-normalcy should be reflected in the education sector as well. Considering all the points, the budget scale should be inclined towards the education sector in the upcoming Union Budget 2021.

4. Abhishek Gupta, Founder and CEO, Hex N Bit states

During the recent speech by PM Modi, “Startups in India today are the MNCs for tomorrow,” this shows the importance of startups because now in India, there are 25+ Unicorns, which has generated millions of jobs. As COVID-19 has affected the growth of Startups & MSME, so in my point of view following steps must be taken to make a startup sector a successful model:

Existing Incubators & accelerator program must expand their footprint to provide real technical support to them by connecting them with Industry, which can really address the exact pain point of startups in ramping up in development & commercializing the product, including steps to reduce the product or services cost as well as time to market.

To attract foreign or domestic investment for startups, the government must reduce the taxes as dividend tax, capital gains tax, which can give investors’ confidence to invest in India because taxes are very high in India compared to other countries, which provides them with second thoughts before investing.

For electronics manufacturing, as we know, there is no Fab Lab in India, so the cost of manufacturing electronic products is higher (as compared to China & other countries) due to high import duties. The only option is to have Fab Lab in India or reduce import duty, making Indian product – the most preferred one all over the globe. To have Fab Lab in India would be the preference, but it requires considerable funds too.

To achieve a $ 5 trillion economy by 2025, our honourable PM’s vision, competitive manufacturing, supply-chain ecosystem & quality product is important to outshine competitors worldwide.

Expectations from the Modi government regarding the EdTech sector through Union Budget 2021?

In the statement released by Finance Minister Nirmala Sitharaman, she said that 100 years of India wouldn’t have seen a Budget being made post-pandemic like this. Hence, there seems to be a high possibility that the Education budget will cross Rs. 100,000 crore in FY 21-22.

From my perspective, the Government of India must spend at least 6% of its GDP on improving the EdTech sector. This will result in the workforce quality for New India. With the announcement of national education policy, to make it best across the globe for research & innovation, the considerable fund is required to form a talented pool in various sector including medical, military, agriculture, finance, transportation, construction etc.

India is having the largest percentage of youth who have shown interest in online education to upskill themselves. Still, during COVID-19, we have seen that infrastructure is lagging to deliver online education to aspirants. Even when we were giving online sessions to candidates, so some of them were not having good internet speed or computer system, especially in Tier 3 districts, so through Union Budget 2021, there will be an expectation to build up the EdTech ecosystem for citizens to scale up their skills as online education can be made accessible & scalable for both applicants as well as for EdTech firms.

What advantages will Universities and Colleges get if there is an increase in the education budget of 2021?

Education Institution requires considerable improvement to scale up the employment ratio. There is a considerable demand for a skilled & talented workforce. With the education budget of 2021, institutions would expect to elevate infrastructure according to the Industry’s demand for the new age technology like Artificial Intelligence, Cybersecurity, digital marketing, Internet of Things etc. Considering the latest trends in technology, the government has launched NEP 2020 with the plan like the top universities can plan for the set up in other countries as well.

Apart from infrastructure, the institution must set up a plan to upskill the faculty & candidate with Industry connect skill development program, which will help the education system bridge the gap between Academia & Industry. In the future, these steps will be going to increase the employability ratio across various Tech & Non-Tech sectors.

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