The year 2016 has been a challenging year for our economy. With the demonetization effect looming large over the economy and the larger implications still to be seen, everyone expects a populist budget this time around. With government’s emphasis on skill development and e-learning modules, it will be interesting to see what FM Arun Jaitley holds in his kitty for education.
In the past many Union Budgets, allocation towards education has largely been incremental in nature.
Last year saw an allocation of Rs 72,394 crore, compared to Rs 68,963 crore for the year before that (about 5% increase). This comprised of Rs 43,554 crore (3% increase from Rs 42,219.50 crore the year before that) for school education and Rs 28,840 crore (7.3% increase from Rs 26,855 crore allocated the year before that) for higher education. Given the importance of human resources for a largely services-centric economy and with plans to boost the manufacturing sector, this was considered relatively low.
Education Technology, this time talks to few intellectuals of the industry about their expectation from the government. Here are the excerpts;
Mr. Beas Dev Ralhan,CEO, Next Education India Pvt. Ltd
In the past year, we have witnessed quite many changes in the education sector, from forming a new education policy to the ever changing norms for the NEET exam eligibility. Apart from this, the sector has welcomed newer innovations for making learning more interactive and simpler for the students. In this quest, we saw 2016 as an evolving year for the edtech sector with the constant hunger of various organizations working together to digitize the education system.
With the advent of the new financial year, when the General Budget is around the corner, we expect that the Government should provide an appreciable cut to the education sector in order to lay a stronger foundation for our youth. Such a move will enable us to evolve both in higher education and in the K-12 segment, and help us provide technology-enabled education to the students of our nation.
We, as a responsible organisation in the education sector, expect the government to clarify further on the RTE payments which can ensure strict enforcement of rules at every level. We also anticipate the government to form stringent reforms to improve the rural education system and work in tandem with the Digital India programme that is designed to provide Broadband Highways, Universal Access to Mobile Connectivity, Public Internet Access Programme, e-Governance, etc to overcome the hurdles for holistic development of every sector. Therefore, in the coming years, we hope the Government digitizes every classroom and provides modern education to the youth.To fulfil this vision, we will go hand in hand in ushering a digital revolution in every classroom of the country.
Dr. Sandip Jha Chairman Of Sandip University & Sandip Foundation
“The general expectation is a budget that will enable a strong future for the current generation with respect to education and skill development. I also believe strengthening existing initiatives will be critical and this Budget should provide for their institutional strengthening and implementation. It is essential to make way for a stronger elementary education and modernisation of skill
development courses. Provisions for every child to get free basic education should be made. Policies needs to be made such that a proper labour market information system is formed, this will help educational institutions to predict the workforce demand and work accordingly
Mr Prakash Rengarajan, Co-Founder and CEO, HelloClass
Technology is revolutionizing all sectors. With such change happening particularly in sectors related to automation and AI, employment in traditional sectors like manufacturing, IT, and BPO is going to go down. Every year, millions of professionals enter the workforce and there is a spurt in new models of work based on specific skills which can be done as independent gigs. New companies are also emerging that use technology to connect consumers to the providers of these services. This is the time to bring about a change in the traditional regulations and the taxation structure which are only true for a traditional company employing full time professionals. The same rules may result in certain grey areas for the new age companies and a suboptimal experience for consumers and service providers. Given this scenario, the union budget should have specific provisions that clarify some of these grey areas as well as lay the regulatory foundation for this new era of work that lets these new age companies thrive and not be bogged down by regulations.
Ms Gayathri Vasudevan, Co-Founder & CEO of LabourNet Services India Pvt. Ltd
“It is safe to predict that in the Union Budget for 2017-18 in terms of the allocation of funds for skill training will remain either static or rise. The annual budget in 2016 focused adequately on skilling, new job creation, and research-focused higher education which would help in new job creations both in manufacturing and service sector. It should be expected that the budget plan to allocate some funds towards research on developing appropriate teaching methods for skilling, as well as bring about changes in few elements of the Employment sector. For starters, service tax exemptions are important in vocational training because the cost of providing the training is much higher than the returns one can expect and the tax exemption can also make vocational education affordable to all.
There should be a control on frequent policy changes and extra care to segregate skilling from entrepreneurship and employment. Lack of recognition to practical and work-integrated learning has also contributed to a decrease in full-time employment. It is important for the public and the government to look at vocational education as equivalent to normal education. In contrast to the older generation, the Indian youth require a longer exploration period and thus spend shorter periods in a specific job. The present generation expects instant gratification in terms of income and salary without receiving a rigorous vocational training. One way this can happen is through credit transfers, which is equivalent to a graduation. Due to the current demonetisation issue, the effect of which is expected to last at least till April, the government is not going to touch issues related to taxation either, as the implications for it still remain unclear.”
Mr. Aakash Chaudhry, Director, Aakash Educational Services Pvt. Ltd.
Access to basic quality education is still a bigger challenge in India, especially in rural areas. With digitization and innovation seeping in to bridge this gap, there is still room for financial and statutory incentives from the government to motivate private organizations to invest their efforts and time into it, apart from money.
Further standardization of curriculum across states and boards will enable cheaper access to education, with large number of facilitators in the market. Leveraging of technology is vital to gain access to progress of delivered education; hence developments and additional benefits around education technology will be a welcome step.
Pravin Gandhi: Founder, SchoolVita
“There have been many bold initiatives launched by Modi government over last couple of (year) years ranging from Make in India to Skill India to Digital India and Start-up India. One of the paths to Digital India could pass through India’s school-parent network. For schools catering to middle and lower-income schools, capex (capital expenditure – investment in computer hardware and software) is a put-off. Plus, there is suspicion of consultants/vendors and lack of off-the-shelf solutions. This is preventing them from going Digital with meaningful applications. This may be a State – not Central – subject, but if the Union Budget could allow State-Board and Municipal schools a small grant for verifiable Digital initiatives, start-ups in the Education Domain could approach schools in Semi-Urban and Rurban India with their solutions. Corporates may be encouraged to divert part of their CSR activity towards connecting schools and parents through mobile phone and apps. This would benefit schools and bring Digital Inclusion to students and parents besides creating jobs for skilled computer and software operators”.
Mahesh Tejwani, President, Vivekanand Education Society
The basic tax exemption limit should be raised in the upcoming budget. Income Tax Act has cost the inflation index concept for calculating long-term capital gain, the same should be applied to Basic Exemption limit, with rounding off to the nearest ten thousand, instead of increasing on ad hoc basis periodically, the cost inflation index will be more scientific method of fixation of Basic Exemption Limit.
Post-demonetization, efforts have to be made to ensure that no tax payments are accepted in cash and more incentives should be given. The industry and the trade sector should be encouraged to make payments through banks and digital mode.
In the education field, the educational institutions should be encouraged to accept fees and other charges digitally and through banking channels only.
A road map has to be drawn for simplification of the Income Tax Act including reduction in number of sections and heads of income, etc., so that a common man will find it easy to understand the Act.
The discretionary powers of tax authorities be curtailed and curbed. The classification of goods under GST should less prone to disputes and there should be least number of classifications.
Mr. Harshil Gala, Director, eSense learning Pvt. Ltd
The Union Budget is going to be an interesting this year-with expectations that the surplus from demonetisation will be used for development initiatives such as education and skill development. Regardless, they should be looked at as an investment for the growth agenda, rather than as a development element.
Provide Tax break to corporates which nominate their employees for higher education either through the continuing education model or a full time program. The fees paid by corporate for employees’ education should qualify for investment in human resources and hence exempted for tax purposes. All such investments should be considered as “Investments in Building National Wealth”, and hence eligible for 200% investment allowance for income-tax purposes.
New or existing educational institutions making a fresh investment of Rs. 75 crores or above should be eligible for a preferred and long term Loan facility with interest rates at par with Base Rates or Prime Lending Rates of the commercial banks or financial institutions and for a tenor of up to 15 years with step up repayment plan.
Provide a tax relief to the tune of 50% to Universities/Higher Educational Institutions that spend on the capacity development and training of their staff.
Higher Educational Institutions should be free to set up campuses overseas freely and a line of credit of at least $500m should be set up by the Exim Bank, as a part of India’s diplomatic efforts and use of soft power.
Prof Ramola Kumar, Dean, The Delhi School of Communication
Struck by the sudden jolt of demonetization, the Indian economy may be optimistic and expect some goodies.General expectations are that the surplus from the demonetization exercise will be used for development activities that can have an impact on the country’s growth. Initiatives can be directed towards education and skill development. Under the scope of Pradhan Mantri Kaushal Vikas Yojana (PMKVY),
skill development has moved ahead and along with Media & Entertainment Skill Council (MESC) and other divisions – should also get a boost.
We expect that the government will allocate available funds for the up-gradation of infrastructure and development of a world-class learning environment in all the educational institutions of the country. To achieve this task, the government needs to upgrade the education system at both primary and secondary levels.
Mr: Harish Thakkar, Executive Director – Imarticus Learning
The Union budget will be presented on 1st Feb this year. It has been a closely watched event with lots of promises and scheme announcements. The Indian citizen is expecting a populist, pro-poor and middle class budget after having borne the shock of demonetisation. It was also evident from the PMs speech on 31st Dec – largely termed as mini-budget speech wherein he announced schemes to make- it-up to the poor for waiting in long queues.
Just as it has been in past years, there will be announcements and more allocations to the social sector and development of rural areas particularly for farmers, we expect a boost to digital payments particularly Debit/credit cards and internet banking. The salaried class has been eagerly waiting lower income tax rates year on year, may see finally a higher exemption limit or lower tax rates.
We also expect some tougher measures for tax avoidance and changes in filing of the Income tax returns, with a view to bring in more transparency of businesses particularly the unorganised small and medium enterprises and also to widen the tax base. Lower tax rates promulgate wider tax base and discourage tax avoidance.
As the PM in one of his speeches mentioned, “Imandaar ki mushkilen kam hongi aur Beimaan ki mushkilen badhengi “ so an action packed Budget session is eagerly awaited just as the nation awaits PMs address. The drama unfolds in a few weeks.
Vikalp Jain, President and Co-Founder, Acadgild
The startup community is in much anticipation of the upcoming budget. The previous year saw a rough patch but this year, the expectations from many possible feel-good features in the budget to be presented are very high. Established organizations and startups alike would want to see a series of favorable policies this year. The initiatives taken by the government so far for skilling are commendable. However, very little has been done in terms of incentives for start-ups in the ed-tech space. It would be appreciable to see some good measures taken in this space. Things like service tax waiver, easier NSDC accreditation process, allowing subscription based payments will really help. It remains to be seen how this budget will favor ed-tech startups like ours which aim to bring accessible, affordable, engaging, and highly effective quality education to the world.
Mr. Hamid Farooqui , CEO , SoGoSurvey
“Relatively speaking the quality of life in Indian cities is not on par with developed countries. In my opinion the biggest cause for this is very high concentration of population in cities. Again, this is due to lack of enough cities in India. We need to combine accelerated development of smart cities and Startup India program announced by PM Modi. Budget 2017 should allocate major resources towards the development of these cities with private public partnership. Also, provide great incentives to startups to locate in these cities. Provide affordable housing, healthcare, schools, institute like IIM , IIT and other facilities and infrastructure of international standards.
Startups will attract high skilled people to these cities from everywhere. India as a whole would progress and quality of life of Indians would improve. This is a long term strategy and our next generation will thank us for this.
I hope to see some kind of special incentive to Information Technology professionals in this budget. More importance to educating teenagers to get India more develop. My argument is that we want to encourage more and more students to get into IT so that our leadership position in Global IT business only goes up. Next Google or WhatsApp or Tesla Motors should come out of India. The budget needs to help that. I propose a higher income tax exception for IT professionals.
I know that PM Modi has announced a lot of incentives for startups. In the budget, I would like to see one incentive to be practically implemented immediately for startups GST exemption. If the company has already been in operation for less than 3 years then 3 years exemption starting 2017. ”
Mr. P.N.Hariharan CFO, ITM Group Of Institutions
This budget comes in the back drop of demonetization, slower GDP growth forecasts and the upcoming polls in 5 states. The Finance minister should resist pressure to give sops or freebies and instead use the budgetary measures and tax proposals to spur growth. GST roll out has hit road blocks and FM needs to mend fences to put it back on track. Education loans are still not available or affordable to lower middle class and rural population who do not have stable income and collaterals. A scheme to facilitate these sections to avail loans would be immensely helpful.