The story so far: On October 23, the Central Consumer Protection Authority (CCPA) said that it was probing 20 IAS coaching institutes for making misleading claims in their advertisements and for unfair trade practices. Four of the twenty institutions have already been slapped with a penalty of Rs 1 lakh.
The institutes being probed are accused of making misleading or incomplete disclosure about the testimonials in their advertisements. CCPA observed that institutes use pictures and names of top rank holders and successful candidates to influence potential aspirants, without disclosing the nature of their enrolments.
What has the CCPA observed?
Elaborating on the broader mechanism at play, Chief Commissioner at CCPA Nidhi Khare told DD News that every time the results of any competitive exam, including the UPSC Civil Services, are announced, coaching institutes would go an advertising spree. Names and pictures of the top rankers are used in these ads to indicate their enrolment at the institute. However, they do not disclose the nature of the enrolment, that is, the course they might have pursued in the institute.
UPSC CSE exams are conducted at three stages, namely, prelims, mains and interview. CCPA has observed that most rank holders showcased in the advertisements only took mock interviews from these institutes. In fact, coaching institutes have been found to provide mock interviews free of cost, since it serves their own interests. This information is not disclosed in the advertisements, which ideally must include the course they enrolled for (which could be a test series, learning course or a revision course). Thus, it would qualify as deliberate concealment of important information and categorisation as a ‘misleading advertisement’ under Section 2(28) of the Consumer Protection Act, 2019.
First time violations may invite penalties up to Rs 10 lakh. Subsequent violations may attract penalties up to Rs 50 lakh, with other potential legal action should the non-compliance continue.
What is the ecosystem like?
UPSC recommended a total of 933 candidates post its CSE examinations in 2022. However, as observed by CCPA, the total selections claimed by the institutes being probed exceeded the recommendations significantly— the cumulative count was over 3,500. This could also be because of multiple enrolments among students.
At present, four institutes have been fined — Chahal Academy, IQRA IAS, Rau’s IAS Study Circle and IAS Baba. While IAS Baba has received a stay on the probe from the Karnataka High Court, Rau’s IAS has appealed against the order in the National Consumer Disputes Redressal Commission (NCRDC). Other coaching institutes currently being probed include Vajirao and Reddy Institute, KSG- Khan Study Group IAS, Drishti IAS, Sriram IAS, NEXT IAS and Vision IAS, among others.
During the probe, the institutes were given the opportunity to make their submissions against the allegations of exaggerated claims.Their submissions reveal some of the same concerns raised by the CCPA. For example, Khan Study Group claimed that 682 of the 933 selected belonged to their institute. However, their submission indicated that 673 students took mock interviews, and 9 students were enrolled in test series and general studies programmes. Vajirao and Reddy also professed about 617 selections – all of whom took the interview guidance programme. Drishti IAS claimed more than 216 selections in their interviews. All of them had taken the interview guidance and mentorship programme.
India’s coaching and education industry at large
Manisha Kapoor, CEO and Secretary General at the Advertising Standards Council of India (ASCI) told The Hindu that education has emerged as “one of the most violative sectors in advertising” in recent years. Over the last two years, the self-regulatory body has processed more than 3,300 education ads, including those by coaching classes targeting students for competitive exams.
“Most violations would be in the areas of leadership claims, placement to best colleges, success assurances etc. While there is fierce pressure in education, misleading ads in the category often perpetuate the problem and end up targeting vulnerable students and parents,” she says.
According to Pune-based consultancy Infinium Global Research LLP, the coaching class market in India is expected to reach about Rs 1.79 lakh crore by 2030 and grow at a Compounded Annual Growth Rate of 14.07% over a forecast period of 2023-30.
Categorising the market based on types and channels, it highlights that higher education holds the largest market share — of about 32.75% in 2022. This is expected to increase to 34.75% over the same forecast period.
“The coaching classes industry in India is experiencing significant growth and expansion. This phenomenon can be attributed to several key factors that have converged to create a thriving market for supplementary education,” a representative told The Hindu. “Further there is intense competition in India’s education sector, particularly when it comes to preparing for entrance exams and board examinations. Students and their parents are increasingly turning to coaching classes to gain a competitive edge and improve their academic performance.”
The CCPA also observed that coaching for students (typically) starts from 10 years of age and goes on until the next two decades. While Delhi is considered the hub of UPSC CSE coaching, approximately two lakh students move to Kota annually (primarily for IIT-JEE coaching).
With migration also forming a part of the landscape, the coaching centre system is further complimented by the demand for associated services such as rented accommodation in nearby areas and local tiffin services, among other things. This according to Infinium Global Research, “has led to a surge in demand for rented accommodation, such as hostels, paying guest (PG) accommodations and shared apartments,” with local property owners catering to this demand and, thereby, “creating a thriving real estate market in these areas.”
-With inputs from Jigeesh A.M.