The Digital Economy In India May Not Be Such An Unmixed Blessing

Cases like the rise and fall of Byju's show that e-businesses have classic economic realities to face as the covid shock wears off

- MANOJ PANT

Another one bites the dust, and another one gone, and another one gone"—Queen

In the 2021 T20 World Cup championship, or even in the more recently concluded Indian Premier League cricket tournament, if anyone were to pick one name as a constant, it would have to be neither Virat Kohli nor Shubman Gill, and not Aaron Finch nor Rashid Khan, but Byju’s. With its logo plastered in the background and its representatives at award ceremonies, Byju’s dominated our screen time as the major new ‘sponsor’ of cricket games in India. Yet, cut to 2023, and the same image is replaced by stories of an edu-tech company whose auditors resigned along with some board members, a business faced with loan-repayment trouble, and an employer that had so many rounds of layoffs that its chief honcho had to personally offer words of assurance to the employees who remained. As Shakespeare’s protagonist Mark Antony might well have said today, “Oh what a fall was there my countrymen!"

What I will argue here is that the alleged failure of Byju’s (and similar aggregator companies) may reflect the fact that there is a disconnect between real and financial markets which was accentuated by the covid pandemic. Now, as the pandemic recedes from memory and the economy returns to normal, pandemic-boosted aggregators may find their business models unsustainable. The recent loss of momentum in the information technology sector may reflect this phenomenon.