Telecom and Education

The Indian Government in the past as well as in the current times have always tended to fast track the development of the industry so as to make its citizens avail the best possible method of communication in this heavily digitalized era. India is currently the world’s second-largest telecommunications market, with 1.16 billion subscribers, and has had rapid expansion over the last decade. The government of India’s liberal and reformist policies, as well as strong consumer demand, have aided in the rapid growth of the Indian telecom sector. The government has provided easy market access to telecom equipment as well as a fair and proactive regulatory environment to ensure that consumers may get telecom services at reasonable pricing.

Budget 2022 the Telecommunications Sector:

Two major announcements were made during the Budget on 1st February 2022. Firstly, the announcement of the possible launch of 5G throughout the country by FY2023 and secondly R&D and commercialization of technologies to receive 5% of annual collections from the Universal Service Obligations Fund. This year the government has allocated 84,586.80 crores which is a large increase from last years Rs 58,737 crore.

Source: Business Standard

Finance Minister Nirmala Sitharaman announced that a 5G spectrum auction will be held in 2022 to help private companies put out commercial services in FY23. In FY23, Sitharaman stated that the government will issue contracts for the installation of optic fiber in all villages through a public-private partnership.

According to the Budget Documents, it has been noticed that the expenditure on the telecom sector will reduce due to the reduction in revenues, however, this will not impair the government from implementing its plan about the introduction of the 5G spectrum to the Indian Market.

Impact on Telecom Stocks:

The telecom sector’s budget announcements come at a time when operators are preparing for the next generation of cellular networks. Delays in the auction of airwaves that underpin 5G have hampered the country’s 5G goals.

Following the Budget statements, Bharti Airtel’s stock fell 0.9 per cent, while Vodafone Idea’s stock fell 0.1 per cent. The S&P BSE Telecom index ended the day with a 0.3 per cent loss. Tata Teleservices Maharashtra, RailTel Corp, and GTPL Hathway were among the elements that lost 1-5 per cent apiece. Indus Tower, HFCL, Tata Communications, Sterlite Tech, Tejas Networks, Route Mobile, and ITI, on the other side, increased 1-5 per cent.

Education:

Education is one of the key sectors which will be responsible for the long-term growth of the country. The rise in the allocation of budget by 3% YoY is surely a welcome announcement. The budget which was announced on 1st February 2022 had two key takeaways. Firstly, PM eVIDYA’s ‘One Class One TV Channel’ initiative will be expanded from 12 to 200 TV channels to provide extra education in regional languages for students in classes 1 through 12. Secondly, Students will have access to a digital university that will provide world-class quality education following ISTE Standards.

This announcement is well and good, now let’s take a deeper dive into what all does the budget for education promise. In the Union Budget 2022 for the fiscal year 2022-23, the Union government has set aside Rs 1,04,278 crore for education. This is an increase of Rs 11,054 crore over the amount allotted to education in the fiscal year 2021-22. The education sector received Rs 93,224 crore from the Union Budget last year. This is an increase of 11.86 per cent in the budgeted allocation for education.

Source: https://www.indiabudget.gov.in/doc/bh1.pdf

Out of this amount 39553 crores was allocated to The National Education Mission or Samagra Siksha Abhiyaan which was increased from 30796 crores from the past year. Learning loss, ensuring Covid-19 safety norms as schools reopen, adapting to hybrid teaching models that combine in-class and digital education, and the digital divide among households are all challenges that schools are facing as a result of Covid-19 and school closures as a response to the pandemic. Financing will be crucial in order to overcome these difficulties. The largest centrally sponsored programme (CSS) for school education in India, Samagra Shiksha, may be able to assist states in addressing some of these difficulties.

All these announcements are good, however, the allocation of the budget to education should have been around 6% of Public investment as per the National Education Policy 2020, however it lags and is in the range of 2.8-3.1% ever since the policy was announced. There have been many dire gaps in the education policy of the country. Because of the epidemic, an influx of pupils who could no longer afford private schooling has resulted in a severe need for increased investment in elementary, upper primary, and secondary levels in government schools, according to the Economic Survey released a day before the budget.

The education sector was hit heavily due to the pandemic and the announcements made are just like a band-aid put over a bone-deep wound. Consider the idea of installing television channels as a substitute for physical education lessons. Technology can be used to aid learning, but it cannot be used to replace classroom instruction in a country with poor infrastructure and a shortage of teachers. In any case, how would these TV channels serve the country’s 17 per cent of schools that are still without power? Investing in public education was thus a pressing issue. In this year’s budget, funding for government-funded schools, universities, and research programmes has been reduced as well. When taken as a whole, the loss in learning is consistent, and it will hurt pupils from all walks of life and educational levels.

Author

Abishek Jeremy Lobo

Editor, TJEF, TAPMI