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Covid-19 – A Booster For The Edtech Industry In India.Introduction The EdTech sector is seeing significant investments and expenditure bygovernments, schools, universities, students and professionals globally. By2030, it is expected that global EdTech expenditure will grow to USD 10trillion[1]. The growing popularity of online learning, further necessitateddue to the nationwide lockdown, has provided a major push to the sector inIndia, which is expected to grow at a CAGR of 52% to become a USD 2 billionindustry by 2021[2]. The key growth drivers propelling EdTech in India are theability to serve a large audience at significantly lower costs compared totraditional in-classroom learning, significant growth in internet andsmartphone penetration across India, steady rise in disposable income of theIndian households, and a large consumer base with over 37% of India’s around1.35 billion population falling in the 5-24 age bracket.Regulatory Overview Formal education in India can be broadly classified into school education(elementary, secondary and higher secondary), higher education and vocationaleducation. The Ministry of Human Resource Development (MHRD) is the nodalministry responsible for development of school education and literacy in thecountry, for bringing world class opportunities of higher education andresearch to the country and for formulating and implementing associated policyframework. School education Following the constitutional amendment by Article 21-A in the Constitution ofIndia to provide free and compulsory education of all children in the agegroup of 6 to 14 years as a Fundamental Right, the Right of Children to Freeand Compulsory Education Act, 2009 (RTE Act) was enacted to ensure that everychild has a right to full time elementary education of satisfactory andequitable quality and prescribes certain essential norms and standards to befollowed by schools. Additionally, several boards including Central Board ofSecondary Education (CBSE), the Indian Certificate of Secondary Education(ICSE), International Board, respective State boards and associatedaffiliation guidelines, bye-laws, State acts and rules and regulationsgenerally prescribe the conditions and requirements to be fulfilled forsetting up schools, for being affiliated with the relevant board, prescribecurriculum and, in certain States, the State regulations also govern the feesthat can be charged by schools. Higher education Higher education in India can be classified into central universities, stateuniversities, deemed universities and private universities, depending on themanner in which they are set up. Higher education is largely regulated by theUniversity Grants Commission Act, 1956 and the rules and regulations framedthereunder (UGC), which inter alia determines and maintains standards ofteaching, examination and research in universities and lays down the minimumstandards of instruction for the grant of degree. Additionally, the NationalBoard of Accreditation (NBA), initially established by the All India Councilfor Technical Education (AICTE) and now an independent autonomous body,provides accreditation of technical programs and courses and the NationalAssessment and Accreditation Council (NAAC) provides accreditation to collegesand universities. Vocational and professional education The Government of India (GOI) established the National Vocational EducationQualification Framework (NVEQF) that would consist of nationally recognisedqualification systems including schools, vocational education institutes andinstitutes of higher education reaching upto the doctorate level. It providesfor a model curriculum and framework for separate sectors such as agriculture,information technology, tourism, communications, economics and finance,etc.[3] Further, each professional course is regulated by a separate body,such as the Medical Council of India for medical studies, AICTE for technicalcourses, and the Bar Council India for legal studies. Legal Considerations As the EdTech sector grows and more innovation is brought in different spheresof education and online learning, it also poses certain challenges forbusinesses operating in the sector. A major challenge that the sector isfacing is the web of regulators without a single body responsible forgovernance of the EdTech sector. Whilst schools are trying to collaborate withdifferent regulators in the sector for a better online learning experience,there is no separate legislation that governs online education in India. TheRTE Act provides State Governments the liberty, albeit in harmony with theAct, to form rules and guidelines that are State specific. The States alsohave the ability to formulate rules and regulations to govern online learningand education. However, States have not taken any major step in this regard.MHRD has announced that they are formulating a separate set of regulations forgoverning online education at the school level. However, this concept is stillin pipeline and there are only government schemes to rely on for impartingonline learning at this stage. The nationwide lockdown due to Covid-19 gives aray of hope for the rise of online education as classroom learning is expectedto continue to remain shut for a while and it might prove to be a blessing indisguise for the government to focus on uniform regulations governing thissector for the growth and benefit of the EdTech industry. Investors investing in the EdTech space also need to take into considerationcertain other legal aspects, such as protection of intellectual propertyrights, compliance with data privacy laws and issues arising from it, foreigndirect investment regulations when a foreign party is making investment in thesector in India, protection of proprietary software/technology, accreditationof certificates proposed to be issued by the EdTech service providers and taxconsiderations. Government initiatives to promote online learning One of the many initiatives taken by the GOI to promote online learning wasthrough the SWAYAM programme. This initiative is designed to achieve the threecardinal principles of the Education Policy – access, equity and quality.[4]The objective of this program is to bridge the digital divide for students whohave not been able to join the mainstream knowledge economy. Through SWAYAM,82 undergraduate and 42 post-graduate non-engineering courses are to beoffered in the July 2020 semester.[5] DIKSHA is another initiative which serves as a National Digital Infrastructurefor teachers. DIKSHA leverages existing highly scalable and flexible digitalinfrastructures, while keeping teachers at the centre[6] to ensure that theyare well equipped to impart quality education to the students. Due to restrictions on classroom learning in view of the Covid-19 pandemic,the GOI has also been encouraging the heads of Higher Educational Institutionsto switch to online methods of education and ensure that the academic sessionsare not interrupted.[7] The GOI also took an interesting initiative bylaunching an AI-powered mobile application on May 19, 2020, called theNational Test Abhyas App created by the National Testing Agency for studentspreparing for JEE (Mains) and NEET entrance exams. Further, the GOI has alsolaunched the ‘Aatmnirbhar Abhiyan’ (self-reliant India initiative) on May 17,2020.[8] As part of this initiative, the GOI announced the E-vidya programmeto promote multi-mode access to digital education. How has the lockdown boosted innovation and investment in the EdTech Sector? There are about 4,450 EdTech start-ups operational in the country presently[9]catering various segments including K-12, vocational and professionaltraining/skilling and school/college educational operations. While the K-12and competitive examination segment is dominated by Indian players, theinternational players are focused on reskilling, vocational training, andcertifications. Some successful international players are Coursera, LinkedInLearning, Udemy, Edx, Khan Academy and Google Classroom. A lot of innovations have been experimented within the Indian EdTech industryto balance the dynamics of teachers and students from a traditional classroomto a virtual one. While these trends and innovations saw lower adoption in thepre Covid-19 world, many existing off-the-shelf technology and innovation sawwide adoption in educational institutes recently, to ensure that the academicflow is not impeded. Technology is turning teacher-centric education to a moreteacher-student setup. Smart classrooms are making teaching more transparentand equal for every student in a close to real classroom like experience. There are various universities and colleges in the higher education space thathave come up with innovative measures to cope with the impact of Covid-19.Certain universities have given students the option of what we can call‘education on demand’ wherein students across the world can record theironline classes (instead of attending it live) and watch at their own time andconvenience. Due to the reduced personal touch for students, UGC has requesteduniversities and colleges to follow some important measures to ensurepsychological and mental well-being of students in these tough times.[10] There are several private players providing online coaching classes andtraining for various higher educational, vocational and professional courses.Such private players could also tap into their resources and collaborate toshare learning infrastructure and experience to provide a better onlinelearning opportunity and technology to students. Boards in India are also doing their bit to ensure continuity of education.CBSE is encouraging schools to continue teaching and learning with the help ofdigital learning platforms and provide content to students online. They havealso launched a podcast called CBSE-Shiksha which would assist schools indisseminating crucial information to their teachers, students and parents.[11]ISCE has partnered with television channel ABP Ananda to begin teachingMathematics, English and Science for students in class four to twelve byairing the lectures on television.[12] Challenges While the sector is growing and India is currently home to the second highestnumber of EdTech companies, there is a lot of room to improve India’s marketshare in the EdTech space globally, which is only around 2.09%. Factors suchas tangled regulations governing the education sector, lack of uniformgovernment policies, lack of financial incentives for research and innovationin the EdTech space, patchy internet connectivity especially in rural Indiaand other socio-economic barriers are some of the impediments to the growthtrajectory of this sector in India. The lack of central regulator for allaspects governing the sector and the lack of coordination between the centreand the state as well as various boards and institutes also remain majorstumbling blocks, which warrants a sharper focus and attention from economicand regulatory perspective. That said, the EdTech sector is growingsignificantly and, with careful planning and legal assistance, investors cannavigate through the web of legal and regulatory challenges in the sector andsee significant returns on their investment.For further information, please contact:Ravi Shah, Partner, Cyril Amarchand Mangaldas[email protected][1] https://www.holoniq.com/notes/87bn-of-global-edtech-funding-predicted-to-2030/[2] https://assets.kpmg/content/dam/kpmg/in/pdf/2017/05/Online-Education-in-India-2021.pdf[3] https://www.aicte-india.org/education/vocational-education/model-curriculum/NVEQF-schema[4] https://swayam.gov.in/about[5] https://mhrd.gov.in/sites/upload_files/mhrd/files/Swayam%20Release_0.pdf[6] https://www.india.gov.in/spotlight/diksha-national-digital-infrastructure-teachers[7] https://pib.gov.in/PressReleasePage.aspx?PRID=1627487[8]https://static.pib.gov.in/WriteReadData/userfiles/Aatma%20Nirbhar%20Bharat%20%20Presentation%20Part%205%2017-5-2020.pdf[9] https://inc42.com/features/from-k-12-education-to-test-prep-the-edtech-startups-setting-the-pace-in-india/[10] https://pib.gov.in/PressReleasePage.aspx?PRID=1611602[11]http://cbse.nic.in/newsite/attach/letter%20to%20Principals%20-%20version%205.pdf[12] https://cisce.org//UploadedFiles/PDF/News%20channel%20ABP.pdf