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Budget 2020: E-learning small businesses seek level playing field in govt contracts; suggest these steps

Budget 2020, Union Budget 2020 India, Budget 2020 India, Budget 2020-21

By Sameer Nigam

Union Budget 2020 India | Ease of Doing Business for MSMEs: E-learning platforms in India have been addressing the stark demand-supply gap in education and skilling industry. Both students, as well as corporate employees, are benefitting from the affordable, personalized learning experience provided by these platforms, without having to attend a classroom. A KPMG report titled 'Online Education in India: 2021', with insights from Google Search projects the Indian online education industry to grow from 1.6 million users in 2016 to 9.6 million users by 2021. The report also highlights that the largest chunk of growth in education search queries is now coming in from Tier II and III cities such as Patna, Guwahati, Aligarh, and Kota. This shows how people in these cities now have access to the internet, smartphones, and other resources to enrol for e-learning.

However, there is a lot more that can be done to make e-learning more affordable and accessible for millions of people living in the remotest parts of the country. Every year, the Union Budget brings an opportunity for the government to deliberate upon policy interventions, budget allocation, and introducing structural changes that support a sector.

Level Playing Field

The most important challenge faced by the e-learning industry is the lack of level playing field between small and large companies. Often, large scale e-learning companies have the credentials and financial position required for participation in government bids. Once they grab these contracts, the execution is further sub-contracted to small companies that have the right technology and efficient structure to do so. Such an arrangement not only takes away the valuable opportunity from small scale players in the e-learning industry but also pushes the project costs for government buyers upwards.

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By relaxing the eligibility criteria for participation, the government can make space for cutting edge innovation and cost-effective e-learning solutions that reach out to the masses. For additional support to these small firms, there could be time-bound tax incentives (for example, a tax break for five years since the day of inception). As competition grows in e-learning space, we will see large companies also aiming for price competitiveness and innovation (which often slows down as operations grow in scale).

GST

Another challenge that the industry faces is the high tax slab for e-learning services and software. As a result, the cost of service or solution increases substantially, making it expensive and aspiration for many. Given the importance of Digital India in the current economic environment, relaxing GST slabs will be the much-needed boost for this sector. The move will not only help learners but also many video producers and software developers working in this sector. Hence, there will be a major thrust to the gig economy in the country.

E-learning platforms are bringing a measurable difference in students’ and corporates' skill development and performance. With right support from the government, the sector will reduce the skill gap in India and bring us at par with the developed world. Therefore, we hope that the government will leave no stone unturned this Union Budget, to help millions of Indians continue their educational journey.

(Sameer Nigam is the CEO & Co-founder at Stratbeans. Views expressed are the author's own.)