Blog: Self-regulation for ed-tech: Proposals of soft-touch regulation fine, but govt should consider enabling SROs – The Financial Express

By Rameesh Kailasam & Madhabi Sarkar

The Indian ed-tech industry has been growing rapidly since the Covid-19 pandemic, and is expected to reach $4 billion by 2025 at a compounded annual growth rate of 39.77%, as per a 2021 IBEF report. India is, at present, the world’s second-largest e-learning hub, after the United States. The sector grew by tapping India’s youth population, the emergence of Digital India and the opportunities provided by the pandemic. The industry has a huge potential to grow further should it continue with its efforts to deliver quality education and positively contribute to serving the ecosystem, while safeguarding consumers’ interests.

In recent times, we have witnessed the ed-tech sector bearing the brunt of multiple allegations as well as criticisms concerning the use of forced selling methods, misrepresentation of deliverables, predatory payment schemes, quality of content, and even misleadingly selling courses to parents. The ministry of consumer affairs recently pulled up many players on these grounds.

While ed-tech start-ups are still in various stages of evolution in India, it is heartening to note that the industry has understood and acknowledged the need for having certain behavioural guidelines and codes in place, with an already functioning self-regulatory body called the India Ed-tech Consortium (IEC). The IEC has created a two-tier grievance redressal mechanism that seems to be working well as it claims to have already resolved all complaints till June 2022, while those relating to July are currently being addressed. In addition, it also has a process wherein member companies are expected to have a dedicated grievance officer to reach an early resolution. IEC members are also making efforts now to register with the National Consumer Helpline (NCH). While the development of such processes and codes is certainly a responsible step towards self-regulation, it is equally important that self-regulatory bodies continue to demonstrate their effectiveness, thereby ensuring that this sector continues to thrive and grow.

The traditional education system in India is largely regulated. Given the disruption due to the Covid-19 pandemic and the consequent lockdowns, along with online classes gathering momentum, ed-tech start-ups grew phenomenally.

While soft-touch regulations being envisaged for many upcoming sectors by the government seems to be the way forward, an essential element would be granting recognition to and regulating through self-regulatory bodies for better implementation of the stated objective of reducing potential consumer harm. Such an effort will definitely benefit the ed-tech sector and its consumers and will go a long way in strengthening the education sector with necessary safeguards.
In a world where the customer is king, it becomes important to help consumers make more informed choices and decisions while protecting them. Ed-tech companies in India would therefore do well in imbibing the five pillars of NEP 2020—affordability, accessibility, quality, equity, and accountability.

The positive start-up story is that Indian ed-tech start-ups raised $4.7 billion in 2021, up from $2.2 billion in 2020, signifying an overall increase of $2.5 billion in one year. This made the ed-tech space the third-most funded Indian start-up category, after e-commerce at $10.7 billion and fintech at $8 billion.
Another positive outcome of the growth of the ed-tech space in India is that this has ensured that good teachers are now accessible beyond their earlier geographical limitations and also willing to explore teaching through ed-tech platforms that allow flexibility, reward skills and facilitate constant pursuance of learning and adaptation to new methods of technology and teaching.

Ed-tech companies are also already exploring and foraying into hybrid options to stay in business. Adopting advanced technologies such as artificial intelligence (AI), machine learning (ML), and augmented and virtual reality (AR and VR) will complement the traditional form of teaching and the classroom experience and empower teachers with potential tools and mechanisms to ensure effective online learning.

At this juncture, when the industry is witnessing headwinds in the form of funding slowdown due to macro-economic factors as well as aspersions of aggressive sales, mis-selling, misleading advertising and deliverables, consumer complaints, and business malpractices and job cuts, the self-regulation of the industry becomes imperative.

For a start, ed-tech companies should review sales force, conduct sensitisation training, publish grievance redressal reports, and responsibly advertise in accordance with ASCI guidelines. For example, the usage of legally defined qualifications, such as MBA, should be the case only when they meet university standards.

Clear communication that ensures students are not falsely led to believe that they are earning a formal qualification by taking up the services from these ed-tech companies should be the norm for the space. Like many start-ups, the Indian ed-tech sector has already created over 75,000 employment opportunities in the past five years. There is also an opportunity for many to engage with this sector towards teaching and selling opportunities via the gig space.

Ed-tech is here to stay in the long run because of innovation, accessibility, and tech pedagogy, and the sooner self-regulation is implemented and adhered to, the sector has the capacity to grow exponentially. There is a need for a stronger industry and government collaboration to ensure that this becomes the next sunrise industry from India that will bring the world to the country, making it the ed-tech capital of the world.

With a strong ed-tech portfolio with transparent and clear business practices laid down and used to govern, who knows? One day, we could offer what our ancient universities and gurukuls were sought after for in ancient times—albeit now, through a connected world online.

The authors are respectively, CEO, and senior manager (public policy)

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