Recently, on 3rd January 2022, the Minister of Education Dharmendra Pradhan revealed that a policy for the regulation of the EdTech sector is in the pipelines. This development has its roots in recent events and has also evoked a ‘self-regulatory’ response from the leading companies of the EdTech sector. While the self-regulatory step may be a stop-gap measure for issues including malpractice, this article explores the law and policy around the subject of Indian EdTech.
RECENT DEVELOPMENTS
Earlier, during the winter session (2021) of the parliament, member of parliament Karti Chidambaram brought to centrestage the alleged malpractice of a leading EdTech company involved in predatory marketing practices, including involuntary auto-debit payments by those availing educational services. The content and quality of courses and tutors on such platforms were also questioned. Addressing the concern thereafter, the Ministry of Education issued an advisory, on 23rd December 2021, to parents, students, and stakeholders in school education to use caution while opting for online content and coaching by EdTech companies. It specifically noted that “some ed-tech companies are luring parents in the garb of offering free services and getting the Electronic Fund Transfer (EFT) mandate signed or activating the Auto-debit feature.” Further, the advisory characterizes EdTech companies as E-commerce companies and directs them to comply with Consumer Protection (E-Commerce) Rules, 2020.
Following the Education Minister’s announcement for regulating the EdTech sector, leading EdTech companies Byju’s, Unacademy, upGrad, and others announced measures for self-regulation in the sector. The companies have formed the India EdTech Consortium (IEC) for the purpose, under the aegis of the Internet and Mobile Association of India (IAMAI). The self-regulation measures include a two-tier grievance redressal mechanism and a common code of conduct for EdTech companies to follow.
THE ISSUE
The parliamentary discussion, government advisory, and the Education Minister’s show of intent to regulate the EdTech sector have nudged the EdTech players to initiate self-regulation in light of instances of malpractice. However, self-regulation carries an inherent conflict of interests, and to not judge one’s own case is a pillar of natural justice. As such, the government may take self-regulation as a stop-gap measure unless it is confident of an end to prevalent malpractices through self-regulation.
Thus, given that it may only be a matter of time before the government regulates the EdTech sector, we must discern what needs regulation and to which degree, and what does not. Further, the existing law and policy concerning the subject need to be highlighted to provide context for the upcoming EdTech policy and regulation.
THE EXISTING LAW AND POLICY
Article 19(1)(g) of the Indian Constitution gives the citizens of India the fundamental right to “practise any profession, or to carry on any occupation, trade or business.” The right to impart EdTech services derives authority from this provision. Further, Article 19(6) provides that “reasonable restrictions”may be imposed on the fundamental right under Article 19(1)(g), including the “imposition of professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business”. Therefore, the proposed regulation of the EdTech sector may draw authority from Article 19(6). Pertinently, “Education” features as entry 25 of the Concurrent List of the Seventh Schedule of the Indian Constitution. This implies that both the Centre and the States can legislate on the subject; however, upon any conflict, Central law shall prevail.
While institutional education at school and university levels is regulated with appropriate governmental oversight through school boards, CBSE, University Grants Commission, etc., private coaching services (offline and online) are not regulated at the central level. Some states have specific legislation and policies in place. Relevantly, in October 2020, the Delhi state government proposed a policy to regulate coaching institutions regarding basic facilities, safety measures, and fees; institutions with more than 20 students were directed to register themselves with the Directorate of Education as the first step towards the proposed policy.
The National Education Policy 2020 (NEP) addresses the evolving role of technology in education. Focus on bridging the digital divide and laying education standards using technology are concerns with implications for framing EdTech sector regulations. Improving digital infrastructure, online training of teachers, content creation and dissemination, online assessment of students are other issues highlighted. Private players of the EdTech sector deserve due credit for contributing to the NEP’s vision on the usage of technology already up until now.
EDTECH, PANDEMIC AND ECONOMIC FLOURISH
The EdTech sector has witnessed “creative disruption” in the pandemic years. Online classes being the need during physical lockdowns, technological services for education flourished. Reportedly, with 4,530 EdTech companies in India, 435 have come into existence in the past two years. Further, Byju’s and Unacademy, leading players in the sector, raised USD 2.32 Billion and USD 354 Million, respectively, in the first year of the pandemic. While the current market size of the Indian EdTech industry is approximately USD 800 Million, it is estimated to become USD 30 Billion in size in the coming ten years. Augmenting this growth is the Foreign Direct Investment (FDI), which in the education sector is allowable up to 100 percent under the automatic route since 2002. Thus, as India aims to be self-reliant towards a USD 5 Trillion economy, this economic uprise must be supported for the EdTech sector. The regulations to come must avoid impeding the financial growth of the sector.
The recent development of China’s crackdown over its EdTech companies (for its stated reasons of “common prosperity”) gives India reason to take advantage for better investments. Notably, the volatile policymaking of China has negatively affected the valuation of EdTech firms there. While the democratic process for policymaking and legislative actions in India will ensure reasoned due process, unlike China’s demonstrated policymaking resulting in volatility in sectors regulated, India must learn lessons available and avoid haste in regulation.
REGULATION WHERE NEEDED
Technology is a great enabler but is misused too. The alleged involuntary auto-debit and automatic transfers misuse by certain companies has marred the bona fide of the EdTech ecosystem. Examples of misuse in other sectors include predatory digital loan practices through online and mobile apps, exacerbated during the pandemic. The RBI published a report on the issue in November 2021. Such broader concerns regarding misuse of technology may help address issues of the EdTech sector – misuse for earning financial gain should never be a characteristic of the Indian EdTech sector. The objectives should be to impart education according to the standardized pedagogical needs: age, social grouping, and economic justice specificities.
CONCLUSION
The existing discourse on EdTech must be taken forward at this opportune moment where we observe both the benefits of the growing sector and certain unfortunate predatory practices. As discussed, the regulation of EdTech must carefully avoid impeding the growth of the sector. A comprehensive discussion with the stakeholders, including students, parents, and EdTech entrepreneurs alike, will go a long way in ensuring a fruitful policy for regulating Indian EdTech.
