School ecosystem angsts
As a tranquil parent, many would’ve agreed to pay or settle the sudden hike of their children’s school fees, during the lockdown period. Just to make sure their kids can continue to study with the help of online disruption.
While, a significant number of parents across the country have staged protests in voicing against the existing or unexpected spike in school fees, as charged by private school owners. At a time when parents are reeling from salary cuts or job loss, the pressure to pay hiked school fees has made things worse.
On the other end, the private school owners are in a fix, as they have to pay teachers’ salaries, staff payments and meet unavoidable expenses. A black swan event like Covid-19 has had dreadful implications on finances.
Black Swan commotion
The big question here is – for how long, teachers can continue to work without getting due salaries. School owners are, however, working overtime to adopt technology to bring online learning modules to the homes of their students through – online classes, provide assignments, resolving doubts and most importantly reassuring the parents that students will not suffer academic loss.
As per a private study, nearly 50% of all students in India are enrolled today in the 4.5 lakh privately managed schools across the country. The findings of the study also raise an alarm regarding this impending reality and pegs uncollected fees at crores. Moreover, it calls for policy measures to resuscitate the situation for the private schools with edu-tech and enabling the institutions an MSME tag to survive the road ahead. Although, NITI Aayog report suggest that States must ensure that the reimbursements for students of economically weaker sections must be paid promptly to private schools. The govt also stressed upon emphasising more on long term policy changes needed to support the sector, to shift focus from regulation of inputs such as fees, salaries, land and infrastructure to monitoring of learning outcomes.
Growth Survival and Demystifying Opportunity
One of the important and futuristic initiatives taken by the Govt of India is the introduction of – ECLGS (Emergency Credit Line Guarantee Scheme), which is a part of the Rs 20 lakh crore comprehensive package. The purpose of the ECLGS is to provide additional credit to the eligible micro business enterprises, small and medium enterprises borrowers by way of additional terms loan, to meet their operational liabilities and kick start their businesses again which have been obstructed due to COvid-19 pandemic crisis. Under the scheme, the interest rate of banks and financial institutions have been capped at 9.25% per annum, while NBFCs can lend a maximum of 14% per annum.
The National Credit Guarantee Trustee Company Ltd (NCGTC), which runs the ECLGS scheme, is firming up plans to include individual entrepreneurs for ECGLS scheme, which comprise a large chunk of the over 6.3 crore MSMEs in the country.
Prodding for recovery wheel
Under the scheme, small or mid-size private school owners across the country would feel a big respite in applying and availing the loan facility to survive in the sector during the COVID times. Until last month, more than 30 lakh MSMEs have been sanctioned loan and more than 11 Lakh enterprises have been disbursed. The 100% government-backed collateral-free loan scheme was announced a month ago and was part of the government’s Rs20-trillion financial package to help the poor, revive lending to micro, small and medium enterprises (MSMEs) and protect incomes of individuals.
The Ministry of Finance guided private sector banks and NBFCs that they should implement the scheme to help out small and micro-businesses. The banks have the responsibility to increase credit disbursal to support small businesses, in order to give a push to a standstill economy and bring back economic activity on its recovery path.