Update on 20/04/2023: The CEO Dakhshinamurthy Kolluru and co-founder Sridhar Pappu of Ed-Tech firm Insofe have said that the company will repay the loans taken under the name of the employees and provide them with experience and education certifications, according to a report by Times of India. They have also informed TOI that the company is only shelving the TuringMinds programme, which was launched to recruit employees for their data science projects.
Original story published on 19/04/2023:
Around 700 fresh recruits of Ed-tech firm Insofe in Telangana were left jobless and with hefty loans taken by the company under their names, after the managers announced they are shutting shop on April 17, according to a Times of India report. At least 250 recruits staged a protest at Insofe’s Hyderabad office on April 18 demanding compensation from the firm, which has been acquired by one of India’s major Ed-tech company upGrad.
According to the TOI report, Insofe had recruited fresh graduates from engineering colleges luring them with Science and Artificial Intelligence courses, and promises of employment offers at the end of the training. Additionally, the company has taken huge loans from private banks in the name of the employees: four lakhs against 650 trainees who took up the PG Diploma course. They also collected 10 lakhs from 50 trainees who signed up for the Master’s course.
The police informed TOI that the company promised to pay back the employees once they would join the firm full-time as data scientists or AI specialists, after completion of the nine-month training programme. The students have not yet lodged a complaint as they hope to reach an agreement with the company for compensation.
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Why it matters:
This case is yet another instance highlighting how consumers are left in limbo after investing their time and money in Ed-Tech courses hoping for better opportunities, in the absence of measures ensuring accountability. Over the past two to three years, thousands of recurring complaints against Ed-Tech majors like BYJU’s have underlined the need for stricter regulatory methods and new mechanisms in the sector to assess the credibility of these firms and their operations. But the Indian government has been dodging these questions in the Parliament with not-so-convincing answers. So who’s going to be held accountable for the damage done by private Ed-Tech companies, small and big?
Tall claims by Ed-Tech firms:
Tall claims of top scores, employment opportunities, and success, in general, are some of the peculiar characteristics of Ed-tech advertisements. The Advertising Council of India (ASCI) has highlighted in its report ‘Raising the Bar on EdTech Advertising’ that misleading ads, and the unsubstantiated claims made by EdTech companies in them, are a few major problems plaguing the Ed-Tech advertising space.
In the same report, educationists pointed out that there is a lack of benchmarks to evaluate the content and methodology of an Ed-tech product. It turns out that, Insofe, by claiming to offer courses in Computer Science and other engineering subjects, also tapped into the growing popularity of AI amongst young graduates who would jump at the opportunity to acquire the skills needed in a sector that is touted to be lucrative in the near future.
Ed-tech and the loan problem:
Among the predatory sales practices employed by Ed-Tech companies to bring customers on board, forcing unwanted loans on parents who cannot afford their expensive courses is a major underserved problem. In the past, people have taken companies like BYJU’s to court for compensation over the losses they incurred due to the loans enforced on them without enough transparency and informed consent.
In Insofe’s case, though the problem differs slightly, given that the company is taking a loan under employees’ names, the method itself raises several questions about the firm’s financial position and approach towards education or skill-based training. Further, questions regarding the terms and conditions of such offerings, what necessitated the loan requirement, and the remedial measures with the protesting employees under such contracts require immediate answers.
(The article was updated on April 20, 2023 at 10:08 am to add latest news in the story.)
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Also Read:
- With Tall Claims Of Success, Ed-Tech Ads Make Parents Feel That Their Child Is Missing Out: Report
- Byju’s Is Operating Like A Loan Shark, Needs To Be Monitored: MP Karti Chidambaram
- “You Can’t Be Buccaneering Pirates”: MP Karti Chidambaram Calls For Law To Regulate Ed-Tech
- Ed-Tech Companies Use Ads To Exploit Parents’ Guilt: Karti Chidambaram Writes To ASCI
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