Many companies offer online and remote learning courses. In the pandemic, the schools and colleges were closed. Edtech sector received a boost. There are five edtech unicorns in India. There are many fly-by-night operators. China has become stricter in regulating this sector. China prohibits edtech companies to raise public money or foreign capital. This has benefited edtech players there.

The government has advised caution in using the services of edtech companies. The offers must be carefully evaluated. They lure the subscribers to free courses, and do not disclose the auto-debits later on. There are inordinate delays in getting refunds. K–12, i.e. kindergarten to class 12, sector is unregulated. The government has so far treated the sector with kid gloves by just offering warnings to mend the ways. If edtech behaves erratically, there could be heavy scrutiny and regulation.

However, it is so difficult to monitor this sprawling sector. Many companies follow a business model that generates revenues rather than quality education. Investors exit the sector after five years. The government must set the standards and initiate certification process. There should be a lock-in period for investors.

Proper regulation of this sector will spare financial distress to many middle and lower-income families. Education cannot be fully left to the private sector. The government should have thought about public distance learning education modules. That would have benefited large number of students during the lockdowns on account of the pandemic.

RBI-backed digital currency has been a popular idea. In 2022, it could be translated into an e-Rupi. RBI will have to decide the design of this currency. Would RBI deal directly with customers providing him e-Rupi wallet? Will e-Rupi deposits attract interest? If yes, would it affect the bank deposits? If no, what more would e-Rupi achieve than the UPI-based payment system of digital transfers is already doing? These issues have significant implications. These have bearing an digital payments, banking and financial systems.

The central-bank-backed-digital-currency is certain to come. However, the devil is in the details.

On 15 Dec. 2021, Union cabinet approved $ 10 billion (Rs.76000 crore) proposal to build semiconductor ecosystem in the country. Over the next five-six years, the incentives will be extended to greenfield chip fab units, display fab units, compound semiconductor and ATMP (assembly, testing, marking and packaging) facilities.

There are fabless players — the design companies — which will be given a fiscal push. Semiconductor and display fab units will be offered financial support. Compound semiconductor units make chips for mobile chargers and electric vehicles. The government will offer fiscal support to compound semiconductor units and ATMP facilities.

The move will attract international investment into the country. It is estimated it will bring an investment up to Rs. 1.7 lac crore.

Developing capability in semiconductor design and manufacturing is a vital strategic necessity for India. Advanced microchips power defence missile systems, satellites and communications. Through these complex bundles of software and microscopic hardware, a foreign power can snoop on or control. There could be a chase for parts at a crucial moment. It is prudent for India to develop a semiconductor manufacturing industry.

As business go digital and the use of AI, VR, AR increase, the notion that India should focus on medium and low-end chips is flawed, There is need to build competitive advantage in high-end semiconductors and chip design.

The machines necessary to supply components of a chip fab are sophisticated and produced by a couple of companies. Here we should do backward integration.

The government’s intention is to create a complete semiconductor ecosystem. India intends to join the list of Asian countries that currently control 3/4ths of the world’s fab capacity — Taiwan, South Korea, Japan and China. The US is far behind with a share of 13 per cent.

The global short supply and fear of dependence on China for fab supplies have driven the present incentivisation.

The government is actively engaging with top global investors. It is in talk with leading chip makers — TSMC, Intel, Hynix, STMicroelectronics as well as the Tata Group.Vedanta too is interested.

There is a demand for display fabs, the major market for which is controlled by China. Display fab makes half the cost of a TV a a quarter of the cost of a mobile. India can ill afford to depend on China.

There are digital department stores which sell virtual luxury brands. These stores offer clothing and accessories which exist only online. The apparel sold is for digital avatars. Most of the products are limited editions. However, at one time, only a single product is available on line. Those who buy these products receive an NFT (non-fungible token). It is a virtual ownership certificate that runs on blockchain technology.

The outfits bought are called skins. They customise appearance. In the next version of internet, called metaverse, such shopping will receive a tremendous boost. Avatars will be as common as DPs are today.

Organisations are adopting enterprise SaaS, as an alternative to conventional business software. SaaS is cost-effective, and critical business processes are put in an on-demand environment. The advantages of enterprise SaaS are :

Scalability and Accessibility

SaaS solutions reside in cloud environments. These are scalable and could be integrated to other offerings of SaaS. It can be scaled up or down depending upon needs.

Cost Effective

There is a periodic subscription to be paid to SaaS providers. There is no upfront huge payment. SaaS providers maintains the environment, and hence the maintenance costs are lower.

High Adoptability

SaaS solutions are delivered through the web. Employees master them quickly. Thus adoptability is easier.

Guaranteed Level of Service

Traditional software is not warranty-backed. SaaS guarantees the performance. There is automatic back too.

Faster Updates

There are less costs and effort associated with SaaS updates than those with traditional software.

There are some disadvantages of SaaS solutions.

Limited Visibility

There are many SaaS tools within a tech stack. Different teams may be using different apps. However, the functionality is similar in SaaS apps.

Compatability

Enterprise SaaS can be scaled up easily. It lowers costs. There are problems of integration when independent software is used, say CRM system with Salesforce. We have to troubleshoot the issues.

Security

There is easy access to SaaS model anytime. It carries a lot of information, especially crucial financial data. The data is sent to cloud with ease. It is a data security issue. There should be clear policy about data security.

Indian software-as-a service (SaaS) companies are poised to reach $30 billion in revenues, capturing 8-9 per cent share of the global SaaS market by 2025. ( Report by Bain & Co).

IT service companies no longer operate in commoditized market. As most of the organisations are undergoing digital transformation, IT service providers tend to offer end-to-end solutions through cloud-based and SaaS-based platforms. Traditionally platform refers to a package and-or point solutions. It has been broadened to make it end-to-end in scope.

The platforms are offered across several domains such as banking, financial services and insurance (BFSI), telecom and AI.

Platforms still contribute just a small part of the overall business. These are not sold on license but are deployed for the clients to get service opportunities. Some companies create productised offerings that are licensed out, but most companies offer services in a managed services platform.

A banking product Finacle (Infosys) can be sold as an independent product as well as bundled with a larger service offering. AI too is offered as a part of larger managed service contract.

Platforms provide scalability and higher and higher margins. A combination of products and platforms offer solutions to customers quickly. A SaaS model can easily incorporate new features and functionalities. It can be riveted on an existing platform.

Customers have moved or are moving from one-time license fee to a SaaS-based consumption model. Service companies realise that Cloud and SaaS are causing disruption.

Cryptos are difficult to ban effectively. Just as file sharing has not been banned effectively despite the efforts of various governments for the last 20 years, cryptos too cannot be banned. It is a peer-to-peer network. Nigeria has not succeeded to implement the ban on cryptos. Crypto investors can carry out transactions using peer-to-peer networks, and fiat money. The transactions can happen on other payment platforms.

Decentralised Finance (DeFi) platforms that operate on blockchains can be used to trade in cryptos without any intermediaries such as banks or crypto exchanges. User signups are anonymous on these platforms (no name, id markers suchas email or location). Many Chinese transactions seem to be happening this way after the ban. At least the exchanges do the KYC. DeFi platforms do not . Crypto exchanges are based on servers. DeFi platforms are not controlled by a single or group of servers. These too operate through distributed peer-to-peer networks run by computers across the world.

DeFi platforms and cryptos can be banned by banning the ports — the interfaces that that allow computers to communicate regarding a software. However, in essence it blocks other genuine software utilising the same port.

Even banned exchanges can move abroad. These then can deal with customers through private virtual networks (VPNs).

People can do transactions in other jurisdictions.

Geeta Gopinath, from IMF, is of the opinion that the ban on cryptos may be tough to impose from a practical point of view. A lot of exchanges are offshore and not subject to a particular country’s regulation. A global compact is necessary, as an individual country cannot do the regulation.

Digital currencies can be traced back to the end of 1980s in the form of DigiCash and e-gold. Later, cryptocurrency appeared towards the end of the first decade of the new millennium. Cryptocurrency is secured by cryptography. Cryptos are highly volatile.

As an attempt to make them less volatile, the concept of Stablecoins appeared. They are backed by underlying assets to limit price fluctuations and are more regulated. Several collaterals and methods stabilise them. These could be backed by commodity, fiat money, other cryptocurrency or any combination of these assets.

Digix Gold Tokens (DGX) are stablecoins which are commodity-based. Tether, Binance, Diem, USDT, USD and USD Coins are backed by fiat money. DAI is backed by cryptocurrencies. Seignoirage are stablecoins not backed by assets but by complex algorithms which control their supply.

Stabilisation makes digital currency a store of value as well as the medium of exchange.

Arth has been pegged to a basket of assets, where each asset is assigned weightage to hedge against inflation and currency risk. Arth can be treated as ‘value-stablecoin’.

The stability of stablecoins is related to the stability of underlying assets. The value may also relate to the trading volumes of such coins. These stablecoins too are subject to interest-rate risk, credit risk and liquidity-risk.