Budget 2023: ‘Allocate higher share of GDP to education,’ says edtech unicorn upGrad’s MD

Like every year, there are heightened expectations from the Union Budget 2023-24. Stakeholders from the start-up ecosystem have come forward to voice their expectations from the government. 
 
Battling several challenges such as funding winter, layoffs, valuations being cut down, IPOs being delayed, and more, founders have a list of things that can help navigate through the economic slowdown. 
 
Mayank Kumar, Co-founder and Managing Director of edtech unicorn, upGrad, is of the opinion that allocating a higher share of GDP to education will give a boom to this sector. He also highlighted the importance of focusing on high-school education to boost the overall ecosystem. He said that when adult education becomes a household phenomenon, it will accelerate the country’s GDP.

He further added, “We also seek a stronger framework in the form of higher tax credits and reductions in tax calculations to propel the growth of skill-based and lifelong learning as it further encourages professionals to get retrained and stay employable.”
 
Edtech sector was one of the worst hit in 2022. Venture funding in India’s edtech startups more than halved from $4 billion in 2021 to $1.8 billion in 2022, according to PwC’s Startup Deals Tracker - CY22. This was lower than even 2020, when total edtech funding stood at $2 billion. 
 
However, apart from funding dropping, the sector also came under the scanner for mass layoffs and business models getting questioned.

He also pointed out the “rising economic uncertainties” have created a retention problem within the edtech environment.
 
To solve this, one of the areas that needs attention is the employee stock ownership plans (ESOPs). “Companies and founders have started considering ESOPs as an attractive wealth-creation opportunity for their talent. However, the higher tax on capital gains associated with ESOPs has become a bigger deterrent. It’s important for the upcoming Budget to introduce a framework to further incentivise ESOPs with simpler tax structures as shares, thereby making it a mass product,” he said.

Kumar said that while challenges are immense, digital way of life is undeniably the new normal and the government’s support to keep it going is important.

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