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Sunday, January 23, 2022

Edtech sector’s self-regulation bid: How, why, and why now

🔴 The companies have formed a collective — India EdTech Consortium — under the aegis of the industry body Internet and Mobile Association of India (IAMAI).

Written by Sourav Roy Barman | New Delhi |
Updated: January 13, 2022 9:55:35 pm
The collective has been formed after the government announced that it was working on a policy to regulate the sector. (Representational Image)

India’s rapidly growing edtech sector recently took a step towards self-regulation, with a clutch of leading companies adopting a set of guidelines to conduct their businesses.

The companies have formed a collective — India EdTech Consortium — under the aegis of the industry body Internet and Mobile Association of India (IAMAI).

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The collective has been formed after the government announced that it was working on a policy to regulate the sector.

What exactly is ‘edtech’?

Edtech is essentially a combination of ‘education’ and ‘technology’.

Before the pandemic hit, edtech was mostly about using technological tools to improve learning outcomes and enhancing access. It was a sector that was already growing fairly steadily.

A major push came as Covid-19 shut down schools, colleges, and universities. From being a ‘modern’ choice, remote learning suddenly became the only alternative as institutions, students, guardians, and authorities switched to the digital mode.

Four out of the six Indian edtech startups with valuations of $1 billion and above have come up over the last year, which captures the way the industry has grown of late.

Which are these startups, valued at a billion dollars or more?

The companies are BYJU’S, Unacademy, Eruditus, upGrad, Vedantu, and Lead School. Companies such as these are called ‘unicorns’, a recognition of the fact that start-ups with a net worth of over $ 1 billion are rarely found.

While Vedantu, upGrad and Eruditus joined the unicorn club in 2021, Lead School joined the league this month.

What was the need for the edtech companies to roll out self-regulation?

The move to self-regulate stems from growing concerns, which echoed in Parliament, that many edtech firms were indulging in various forms of business malpractices to attract consumers.

The government stepped in last month, issuing an advisory of do’s and don’ts for students and guardians looking to sign up for online courses offered by these companies.

The advisory also cautioned the companies against violations.

Earlier this month, Education Minister Dharmendra Pradhan had announced that the government was working on a policy to regulate the edtech ecosystem.

His remarks had drawn mixed reactions from the industry that has traditionally been wary of state interventions.

What kind of complaints did edtech companies face?

In its advisory, the government had cautioned people against enrolling for courses without careful evaluation, because many courses billed as free in advertisements were found to be paid.

Also, many customers had unknowingly signed up for loans arranged by these companies, the government said.

“It has come to the notice of the Department of School Education and Literacy 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, especially targeting the vulnerable families,” the government said in the advisory.

So how does the collective plan to set things right?

The India EdTech Consortium has adopted a three-page code of conduct for their businesses. The code is an attempt to address the concerns raised by the government; most of the clauses allude to red flags that have been raised in the recent past.

The companies — BYJU’S, Byju’s, Careers 360, Great Learning, Harappa, TimesEdutech & Events Ltd, Scalar, Simplilearn, Toppr, Unacademy, upGrad, Vedantu, and WhiteHat Jr among others — have claimed to have adopted the mantra, “what is told is what is sold”.

What else does the code of conduct contain?

Apart from stressing on transparency and warning against misleading ads, the code of conduct says the companies are expected to use legal terms of qualifications such as MBA, BBA, and others in ads only when it is compliant with guidelines issued by the UGC and AICTE.

On the practice of edu-tech firms using examples of students achieving success by using their products, the code says such claims must be “authentic with validated proof of performance”.

“Every advertisement of successful candidates must substantiate the product or service they used to give credibility to the claim of success,” it says.

Industry players have been advised to adopt the code for self-regulation issued by the Advertising Standards Council of India.

Also, “Policies should be displayed regarding the refund and cancellation prominently on the user interface platform in a manner that cannot be missed. Loans and other financing FAQs should be clearly mentioned on the platform,” the code of conduct says.

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