What is common to climate change policy making and petrol and diesel tax? Both leave out a crucial stakeholder.
Meanwhile, edtech major Byju’s is preparing another front to take on the US market.
Byju’s “Tynkers” with the US market
A lot can change in a year.
In an October 2020 interview with The Ken, Krishna Vedati, the co-founder and chief executive (CEO) of edtech firm Tynker, had played down the disruptive potential of the WhiteHat Jr model. Now, if you’ve been following all our edtech reportage, you’re already familiar with this motley crew—WhiteHat Jr is the current spearhead of Byju’s US operations. Tynker, a popular coding platform for kids in the US, is Byju’s ninth big-ticket acquisition of 2021. According to reports, Byju’s has bought Tynker at a price tag of US$200 million, a shade above what it paid for WhiteHat Jr.
This is what Vedati had said about Byju’s impending march into the US market.
Vedati had clearly etched out the difference between the two approaches. WhiteHat Jr was about the low-hanging fruit, and playing on the cost arbitrage of Indian teachers. Tynker was about a higher purpose, like teaching science, technology, engineering, and mathematics (STEM) concepts through coding.
But what are higher learning objectives in front of a 20-billion dollar juggernaut moving at full speed?
Tynker’s acquisition, close on the heels of reading platform EPIC, signals a very specific change in Byju’s strategy too. When The Ken wrote about Tynker a year ago, Byju’s was doubling down on aggressive retail sales to individual parents. With Tynker on board, Byju’s can finally access a segment it has been trying hard to crack into—B2B edtech.
You see, coding is much better ensconced in the US school system, and companies such as Tynker have made a sizable land-grab through free-to-use coding resources. Tynker’s own website says that its “highly successful coding curriculum has been used by one in three U.S. K-8 schools, 100,000 schools globally, and over 60 million kids across 150 countries.”
One in three K-8 schools is the kind of beefy statistic that Byju’s likes. Tynker doesn’t just bring (arguably) better coding-for-kids curriculum than WhiteHat Jr, but also the kind of access to schools that Byju’s can only dream of in India. Getting into schools is about scale, but it is also about smartly hedging bets in case the whole “tuition” route in the US comes undone. Here’s Vedati again, on the struggle to price a good tutor-led model in the US:
Would Vedati now be a target for the same questions he raised a year ago? Tynker could very well be a broad funnel for lead generation. But a clash in teaching styles, pedagogy, and for-profit motives is bound to occur, as leads slip in through Tynker only to meet a WhiteHat Jr conversion team. As long as the VC funding sluice is open though, no one’s really asking these questions.
PS: Read our full coverage about Byju’s teams, acquisitions and motives here: https://the-ken.com/narrative/upgrading-the-classroom/
Fuel duel – GST stays out
The Kerala High Court proposed, the GST council disposed.
So, petrol and diesel stay out of the goods and services tax (GST) ambit, and remain under the excise duty and sales tax/value-added tax regimes, at least for now. That’s what the GST council decided on Friday, in its first physical meeting in 20 months.
The reason is simple—plain economics. Moving these cash cows away from excise duty and VAT and into one national rate, the GST, would hurt the revenue of both the Centre and the States a lot. No wonder, then, that states also opposed any plans to initiate talks to include diesel, petrol, and petroleum products under GST.
Based on a writ petition, the Kerala High Court in June had asked the GST Council to decide on bringing petrol and diesel within the GST ambit. The matter has been raised at various fora many times before. But it became more pertinent in recent months—with the fuel prices touching new peaks due to rising international petroleum product prices, and high excise duties and VAT. A litre of petrol now costs more than Rs 100 (US$1.36) across most of India; diesel, too, is inching towards the century mark in many places in the country. This has contributed to high fuel inflation in the country.
Bringing petrol and diesel under GST would surely reduce prices of the fuels by lowering taxes—precisely why the powers-that-be are loath to do it.
As we had written in an earlier edition of BFO,
The revenue implications are big. According to the Petroleum Planning and Analysis Cell (PPAC), in 2020-21, the petroleum sector contributed 29% of the Centre’s revenue receipts and 7% of state governments’ revenue receipts. Excise duties and sales tax/VAT accounted for a major part of this, more so with the steep hikes in excise duties last year.
A shift to GST would mean a gaping hole in the exchequer, that too in a revenue-deficit pandemic period. It could also raise other complications—such as how the GST revenue would be shared between the Centre and states. Even before the GST Council meeting, states like Kerala, Maharashtra, and Karnataka had opposed the shift, citing possible huge loss in revenue. The idea was dead on arrival.
And so, it is that petrol and diesel, along with crude oil, natural gas and aviation turbine (ATF) will remain outside the GST. The wait will continue—likely for a long time to come—until there is political will and leeway on the revenue front. In the meantime, customers will bear the brunt and hope for lower international petroleum prices and/or lower excise duties/VAT.
Hope, after all, makes the world go around.
A small victory for women in the gloomy fight against climate change
Our planet just can’t get a break, it seems.
In August, a United Nations body said nothing short of a drastic reduction in emissions would help with keeping the global temperature rise this century to the targeted 1.5 degree Celsius above pre-industrial levels.
And on Friday, another UN report said that even with countries meeting their current emission-reduction targets by 2030, the temperature rise could be 2.7 degree Celsius.
Only countries responsible for half the world’s emissions, including the United States and those in the European Union, have submitted revised targets. Other large emitters such as China and India haven’t.
But there are some silver linings, one of which is the increasing attention paid by countries to gender in tackling climate change.
It’s now clearly established women get the short end of the stick in a warmer planet.
So the UN has been pushing two specific changes:
- More women in the climate policy-making process
- Assessing the gender-wise impact of countries’ actions on climate change
Interestingly, three of the five executive secretaries of the UN climate body, including the incumbent, have been women.
And its latest report signals a shift in countries’ stance. More than two out of them have mentioned gender in their new emission-reduction commitments. This is significant considering that only one in seven did so in their earlier commitments.
There’s no information available yet on the exact changes countries are planning to make climate responsiveness more inclusive. And they could have merely checked the gender box in their new commitments. But at least the majority felt it was too significant to ignore.
That’s it for today.
Don’t forget to write in with your thoughts and observations on the reshaping of businesses, societies, and economies. We will be back tomorrow.