The Haryana Coaching Institutes (Control and Regulation) Bill 2024 was released for public consultation on 24 January and is likely to be introduced in the state Assembly’s forthcoming Budget session.
The proposed law aims to regulate private coaching institutes, lays down standards and compliances, and empowers the relevant district authority to ensure that stress levels of students are reduced. However, in an ill-considered move, the Bill includes an unqualified term called “online coaching centres”. While on the surface it seems that the Bill is primarily concerned with physical coaching centres, this inclusion broadens its scope to cover all of educational technology or edtech. The proposal echoes the language used in the Rajasthan Coaching Institutes (Control and Regulation) Bill 2023 to include online coaching centres under the ambit of those requiring prior registration.
It is impossible for edtech services to adhere to diverse regulations and registration requirements in different states, as mandated in the Haryana and Rajasthan legislations. Such compliances also impact the ease of doing business in the digital space. A 2022 research paper by CUTS International found that regulatory interventions have increased the compliance of some digital businesses. The researchers cite “duplication of regulation, or inconsistency of regulation” as one of the reasons businesses face more hurdles and costs. By specifying prescriptive compliance after registration, states can start micromanaging edtech, which is an industry transcending geographic boundaries.
In recent years, we have seen how different states’ legislatures as well as their respective High Courts have taken conflicting stances on how to regulate–and tax–online gaming. For example, in November 2023, the Madras High Court only partially upheld the Tamil Nadu assembly’s Online Gaming Act that sought to ban all online games in the state, and said that the prohibition would not apply on games of skill.
In this instance as well, legal commentators have suggested that a nodal stance from the Centre would “make user experience consistent and also make the regulatory landscape clearer”. Unless the definition of “online coaching centres” is clarified and construed narrowly, edtech services would risk being included in its scope. They would then be forced to comply with a patchwork of overlapping state regulations and requirements for registration–and possible licensing.
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Cost of compliance
Digital services, especially those like edtech, often offer hybrid services: broader offerings like pre-recorded courses or interactive content are available online nationwide, while a narrower spectrum of physical offerings like in-person classes depend on their local capacity. Individual states should not get into the business of standard-setting for edtech or of dictating how its services are run. Instead, states should leverage on-ground policing capabilities to ensure quality of service and safety in the case of online services that intersect with the physical world. For instance, apps relying on gig workers must ensure that they do not cause physical harm to state residents.
The edtech industry has already taken a hit after the Covid-19 pandemic with headwinds such as drastic reduction in funding as well as massive layoffs. And feeble signs of recovery been seen only recently. They might now have to tailor different courses to different states’ registration requirements, according to the factors as diverse as the educational qualifications of the online tutor. This is clearly untenable.
The implementation of data protection laws across different states in the US illustrates why it is a bad idea to federalise all aspects of digital regulation. The decentralised structure of data protection authorities in each of the American states with relevant legislation ensures that technology companies comply with enforced data protection measures at the regional level. This requires a duplication of the firm’s efforts, and the higher costs ultimately get passed down to consumers. The Information Technology and Innovation Foundation has estimated that the annual cost of complying with 50 different state privacy laws could reach $239 billion, when compared to a targeted federal law which would cost $ 6 billion.
It is important for state laws such as the Haryana Bill to narrowly and precisely define the scope of their intervention. In this case, by ensuring that they only refer to physical coaching institutes. If states wish to play a part in supervising edtech, they should coordinate efforts with the central government. The European Union’s General Data Protection Regulation introduced the concept of identifying a “lead supervisory authority” in cases where data processing occurs in multiple locations. The lead authority works in close coordination with other concerned authorities but remains the nodal point for implementation.
District authorities tasked with supervising coaching institutes can adopt a similar approach going forward. They can regulate physical coaching centres but defer to a nodal central authority on standard setting for online platforms. The proposed Cenreal Guidelines for the Regulation of Coaching Centres, which was also released in January 2024, have opted to omit any mention of registering online coaching centres. Indian constitutional jurists will also have to propose ways of reconciling our existing system of rulemaking with the new reality of digital technologies and businesses that cut across geographical and political boundaries. This adaptation will overturn the concept of inter-state trade and commerce as we have understood it so far.
The author works at Koan Advisory Group, a technology policy consulting firm in New Delhi. Views are personal.
This article is part of ThePrint-Koan Advisory series that analyses emerging policies, laws and regulations in India’s technology sector. Read all the articles here.
(Edited by Ratan Priya)