All About Self Employment and Talent Utilization: SETU Scheme

In recent years, the number of startups has increased rapidly. India has emerged as the 3rd largest ecosystem of startups in the world. From just 450 startups in 2016, India currently has over 1.28 lakh startups. There are many reasons for this, one of which is the government’s schemes that provide a conducive environment for startups to flourish.

In recent years, the government has realised the role of startups in uplifting the economy. Moreover, with the growing population and the shrinking job opportunities, startups have helped many talented problem-solver youngsters earn and exhibit innovative ideas that help the world.

Among the many government schemes that facilitate startups is the SETU (Self Employment and Talent Utilization) scheme. As its name suggests, it purports to bridge the gap over several hurdles that an entrepreneur faces while making a startup successful. The purpose of the SETU scheme is to support startups in their journey, right from their inception until their success.

Overview of the SETU Scheme

SETU scheme was launched under the Niti Aayog in 2015. It is a techno-financial, incubation, and facilitation program that provides financial assistance, mentorship, and infrastructure to registered startups. It is one part of the Startup India program and helps create a conducive environment for startups to thrive.

What are the Objectives of the SETU Scheme?

The primary objectives of this scheme are as follows:

Provide Access to Funding

For some of the brilliant minds in India, the main issue that remains for executing their business ideas is funding. They often find it difficult to raise their finances. The scheme here comes to the rescue of startups. The scheme helps the startups by providing financial support like grants and subsidies that help them overcome the initial stage hurdles.

Provide Mentorship and Guidance

Not only does the scheme help the entrepreneurs with the funding, but it also provides them with mentorship and guidance from experienced entrepreneurs and industry experts. It helps new entrepreneurs make informed decisions and prepare a startup roadmap.

It also helps them navigate several common challenges that entrepreneurs face in their journey of making their startups successful. Connecting entrepreneurs with these experts will help them gain valuable insights and advice on business strategy, operations, and scaling.

Strengthen Infrastructure

The scheme helps strengthen startups’ infrastructure by providing them with co-working spaces, access to incubators, and technology platforms. This reduces startups’ operational costs and gives them more time to focus on innovation.

Promote Networking Opportunities

The most important element for a startup to thrive is networking. Networking helps entrepreneurs get access to the market, attract investment, get advice from industry experts, and understand the market and the available opportunities.

This scheme facilitates networking by organising events, workshops, and conferences where the entrepreneurs can interact with investors, industry leaders, and other entrepreneurs.

Support Market Expansion

Startups often struggle to expand their market. They sometimes lack marketing skills, which is a crucial part of a business. This scheme helps them with marketing support, market research, and customer acquisition strategies.

Know about the Eligibility Criteria for SETU Scheme

To be eligible for the SETU scheme, the startups of the entrepreneurs should meet certain basic criteria. They are as follows:

Registration

The startups should be either registered as a private limited company under the Companies Act, 2013, an LLP (Limited Liability Partnership) under the Limited Liability Partnership Act, 2008, or a sole proprietorship with a ‘Declaration of Proprietorship under the Registration Act, 1908.

Age of the Startup

The scheme is typically available to businesses at early stages, typically within 5 years from its registration.

Innovative Business Model

The entrepreneurs of the startups have to demonstrate an innovative business model or technology that has the potential to address the needs of the markets or transcend specific challenges

Financial Viability

The financial viability of the business model should be evident. It should have a well-defined business plan, revenue projections, and a clear road map to profitability. The model should be prepared by deeply examining the market and well-informed by statistics.

Guide to Benefit from the SETU Scheme

The SETU scheme is not a scheme that can be particularly applied for; it is more of a policy that is dispersed and evident in the Startup India Portal. One can avail the benefits of this scheme by following this step-by-step process:

1. Registration of Startup on the Startup India Portal

• Visit the Startup India website.
• Create an account by registering your startup.
• Fill out the form with the required details, the information about the startup, the founder of the same, and the nature of the business.

2. Apply for DPIIT Recognition

DPIIT (Department for Promotion of Industry and Internal Trade) is crucial for claiming the benefits of the SETU scheme or the Startup India portal.

• To apply, navigate to the DPIIT recognition section on the Startup India portal.
• Submit the required documents like the certificate of incorporation, a detailed business plan, and other required information.
• Once the application is approved, you will receive a DPIIT recognition certificate, which will make your startup eligible for several government benefits.

3. Explore SETU Scheme Benefits

• The SETU scheme provides a range of benefits, such as mentorship, incubation, and access to funding through partnerships with incubators, accelerators, and other institutions.
• After obtaining DPIIT recognition, one can explore the specific benefits that they want to avail of by navigating through the website and selecting the benefit that they are interested in. The provisions that favour startups are also listed on the website.
• The website registers startups and investors for several schemes, providing a platform for them to connect and thrive through joint efforts.
• Thus, the portal provides information about incubators, mentorship programs, and other resources available that align with the SETU scheme’s objectives.

4. Access Incubation and Mentorship Programs

• Identify and connect with incubators or mentorship programs that align with your startup’s needs. The Startup India portal lists government-approved incubators across various sectors.
• One can also access the SETU (Supporting Entrepreneurs in Transformation and Upskilling) US scheme that was introduced by Piyush Goyal, which aims to connect Indian startups with US-based mentors and startup ecosystem leaders. It conducts the MAARG (Mentorship, Advisory, Assistance, Resilience, and Growth) program. It makes use of AI to match and connect Indian startups with mentors who can guide them in their process. It provides human intelligence that transcends what AI cannot achieve in certain aspects.
• Many incubators and mentorship programs offer application forms or processes directly on their websites. One can apply through these portals by providing information about your startup and how one has planned to leverage the startup through the support that has been provided.
• Some programs like ‘Startup India Seed Fund Scheme’ may also provide seed funding schemes. The eligibility criteria as provided on the website for the startups are:
• The startup should have a DPIIT registration.
• The startup’s age from its incorporation should not be more than 2 years.
• The startup’s business model should include a product or service that fits the market, is financially viable, and has the potential to scale.
• The startup should use technology to solve the problem, either in its core product or service, business model, distribution model, or methodology.
• The startups dealing with social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc., will be given preference over others.
• Startups that have received more than 10 lakhs of monetary support from government schemes, either by the Central or the State Government are not eligible for this scheme. However, the monetary support does not include prize money from competitions and grand challenges, subsidised working space, founder monthly allowance, access to labs, or access to a prototyping facility.
• As per the Companies Act, 2013 and the SEBI (ICDR) Regulations, 2018, the promoters’ shareholding should be at least 51% at the time of applying to the incubator for the scheme.

The seed support is in the form of grants and debts/convertible debentures, each granted according to the guidelines for that particular instrument.

• Office space can also be availed using the following steps:
• Visit the Startup India Portal.
• Login or Register.
• Enter ‘Resources’ in the search bar > Got to ‘Incubators framework’ > Scroll far down and then click on ‘Connect to Incubators’
• Search for the incubators that provide an office space.
• Click on the incubation centre that interests you.
• Follow the application process on the incubation centre’s profile.
• Wait for approval.

Some incubators also offer co-working spaces, which can be an affordable option.

5. Participate in Networking and Capacity Building Events

• The SETU scheme provides several networking opportunities through events, workshops, conferences, etc. It helps you to stay updated with industrial practices, get guidance on several topics, and understand the trends.
• Participate in these events to avail several benefits as these events feature industry leaders, potential investors, etc. 

Impact of SETU Scheme on Different Sectors

SETU scheme has a positive impact on several sectors of the economy, which can be understood in the following ways:

Technology and Innovation

The scheme has been instrumental in advancing technology startups, particularly in fields such as artificial intelligence, blockchain, and fintech. The scheme has enabled tech startups to develop and scale cutting-edge solutions by providing financial support and access to advanced infrastructure.

Healthcare

Healthcare startups have benefited significantly from the SETU scheme, especially those focusing on telemedicine, health tech, and diagnostics. The scheme’s support has facilitated the development of innovative healthcare solutions and improved access to quality healthcare services across the country. 

Agriculture

Startups in the Agriculture sector have leveraged the SETU scheme to introduce advanced farming techniques, precision agriculture, and agri-tech solutions. This support has helped enhance agricultural productivity, improve supply chain efficiency, and promote sustainable farming.

Education

The scheme has also supported ed-tech startups, enabling them to develop and implement innovative educational technologies and platforms. It has contributed to improving the quality of education and making learning resources more accessible to students across India.

Challenges and Recommendations of the SETU Scheme

While the SETU has done commendable work in uplifting the startups, some challenges still need to be addressed. They are as follows:

Awareness and availability

Despite the scheme’s many benefits, very few are able to take advantage of them because of a lack of awareness. An awareness campaign should be implemented, and targeted outreach should be done. Many don’t know the benefits that the portal provides access to.

The portal should also be user-friendly to help startups understand and take advantage of the benefits it offers.

Evaluation Criteria

The evaluation criteria for the Setu Scheme should be regularly reviewed and updated to reflect the evolving needs of startups. Ensuring the criteria are transparent and aligned with industry trends can help improve the scheme’s effectiveness.

Resource Allocation

Effective resource allocation is crucial for maximising the SETU scheme’s impact. Implementing a robust monitoring and evaluation system can help ensure that resources are directed toward startups with the highest potential for success.

Feedback Mechanisms

Strengthening feedback mechanisms can provide valuable insights into the challenges faced by startups and the effectiveness of the support provided. Regular feedback from startups can help identify areas of improvement and ensure that the scheme continues to meet their needs.

Conclusion

In the General Budget 2015-16 presented by Mr Arun Jaitley, 1000 crores were set up in the NITI Aayog, especially for the SETU scheme. The SETU scheme is already helping a number of budding startups. An awareness of the benefits that it provides can provide a better framework for a startup to grow safely.

Access to mentorship through schemes like India – US startup SETU, Seed fund scheme to facilitate early startups, and the platform that has been made available for incubators, investors, and startups has yet to be tapped to its highest potential. Just by surfing the list of incubators, one can understand the support that startups can get through their incubator programs.

Let your business stay compliant with our compliance services today! Get started with hassle-free Startup Registration by visiting our website Corpbiz and tapping into the full benefits of the SETU Scheme.

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