2024 Budget wishlist: Edtechs seek funding, tax exemptions, digital infra

With the government’s Budget 2024 announcement on the horizon, the edtech industry is abuzz with anticipation.

The sector has been a rollercoaster of highs and lows in recent years. Following the pandemic-led surge, it is now facing a reality check with layoffs and funding challenges.

Funding in India’s edtech sector saw a significant drop in 2023 to about $753 million, compared to $2.9 billion in 2022, according to market intelligence platform Tracxn.

While the number of internet users in rural India rose to 425 million, according to Nielsen’s India Internet Report 2023, there remains significant growth potential, with over 50% of the rural population yet to be connected.

Amidst this backdrop, edtech companies are voicing their wishlist for the upcoming budget. Their hopes include tax exemptions, enhanced digital infrastructure to bridge the access gap, and increased funding to propel the sector’s growth, among others.

These measures, they argue, are crucial to democratise education, enhance learning outcomes, and equip the future workforce with necessary skills.

Policies and funds

Education sector stakeholders assert that the budget should recognise the importance of aligning with the New Education Policy’s recommendations, including allocating 6% of total GDP to education.

In Budget 2023, the education sector received a total allocation of Rs 1,12,899 crore—an 8% increase from the previous year’s outlay.

The New Education Policy (NEP) 2020 also advocates that educational institutes shift from traditional textbook learning and embrace multimodal education—learning through multiple channels (text, videos, activities) for deeper understanding.

Apart from increasing funding, BrightCHAMPS Founder and CEO Ravi Bhushan is also hoping for investments to update curricula to include 21st-century subjects like financial literacy, communications, entrepreneurship, and artificial intelligence (AI). 

He also advocates for enhancing delivery methods to make learning more tech-friendly and individualised for greater impact.

Prioritising teacher training and development programmes in the latest pedagogies and technologies is also crucial for delivering high-quality education, believes Prajodh Rajan, Co-founder and Group CEO of Lighthouse Learning (formerly EuroKids International).

India is a key player in the global education industry, with 1.55 million K-12 schools and 218 million students. The Indian school market, valued at $48.9 billion in 2023, is expected to reach $125.8 billion by 2032, growing at a CAGR of 11.1%, according to Research and Markets.

Sumeet Mehta, Co-founder and CEO of LEAD Group, highlights that while schools play a foundational role in shaping young minds, most of India’s 1.5 million schools still rely on rote learning rather than experiential and inquiry-based multimodal learning.

“By focusing on implementing and scaling multimodal school edtech, India can build a truly future-ready education system through school transformation. This will ensure education in India is inclusive, equitable and globally competitive, making sure our students are prepared for the demands of 21st century careers,” Mehta adds.

Technology and digital infra

Achieving the ambition of becoming a $5 trillion economy requires strategic investments in new-age technology, digital infrastructure, and skill development to maintain growth momentum on the global stage, says Akshay Munjal, Founder and CEO of Hero Vired.

Shantanu Rooj, Founder and CEO of TeamLease Edtech concurs, “We hope for increased funding for technology integration in schools, colleges and universities, enhanced internet connectivity in rural areas, and robust support for online learning platforms.”

While technology adoption in education has been steadily increasing, the emergence of AI holds significant promise for personalising learning experiences.

Highlighting the potential of GenAI in shaping the future, Vinay Konanur, Vice President of Emerging Technology at UNext Learning, notes that it is crucial to make this technology widely available through AI hubs and centres of excellence.

Tax structure

Konanur also points out that technology has made education more accessible, breaking down geographical and linguistic barriers. However, cost remains a significant challenge for learners. Reducing tax rates on online learning will make it more affordable, enabling equal access to education and further democratising knowledge, he adds.

Subsidies and tax breaks for tablets and laptops would make them more affordable, creating a more inclusive and technologically advanced education system nationwide, says Veerasundar V., Chief Financial Officer of Simplilearn.

Some edtech players like upGrad Co-founder and Managing Director Mayank Kumar also argue that the government should consider how it approaches employee stock ownership plans (ESOPs). He states that revisiting ESOP taxation policies could further incentivise talent retention and growth in the tech industry. 

Skill development

upGrad’s Kumar also expects the new government to prioritise education and skill development, helping India transform from an outsourcing economy to a globally recognised knowledge economy and innovation hub. He suggests building on the success of Skill India.

Launched in 2015, Skill India is a government initiative to equip India’s youth with job-ready skills. It connects them to training programmes, certifications, and even potential jobs, aiming to boost employability and fuel the nation’s economic growth.

To improve student employability, TeamLease Edtech’s Rooj suggests policy steps such as embedding industry-relevant skills and vocational training into the curriculum, promoting public-private partnerships to bridge the skills gap, and offering incentives for internships and apprenticeships.

Meanwhile, AR Ramesh, CEO of TeamLease Degree Apprenticeship, notes that a system where apprentices can gain credits allowing lateral entry into higher education from the second year can significantly enhance flexibility and accessibility in learning pathways.

“Addressing the immediate need for a rapidly evolving job market, there should be a substantial increase in the budget allocation for skill development and entrepreneurship, ideally by 20–25%,” emphasises Ankit Aggarwal, Founder and CEO of Unstop.

Simplilearn’s Veerasundar believes that India should also explore successful models from other nations, such as Singapore’s SkillFuture programme, which provides financial subsidies to help individuals pursue skills training and career development.

Industry experts emphasise that these measures can not only improve education quality but also prepare students to meet the demands of the modern workforce, thereby advancing India’s position as a global leader in education and employment.

(The feature image has been updated)