Finance Minister Arun Jaitley proposed the setting up of a “techno-financial incubation and facilitation program” called the Self Employment and Talent Utilisation (SETU), during his budget presentation today. He mentioned that Rs 1000 crore will be initially set aside for this. From the budget speech:
“The government is creating a mechanism known as Self Employment and Talent Utilisation (SETU) to be techno-financial incubation and facilitation program to support all aspects of start up business and other self employment activities particularly in the technology driven areas. I am setting aside Rs 1,000 crore initially for this purpose.”
The objective for this he said was to address “concerns such as more liberal system of raising global capital, incubation facilities in our centres of excellence, funding for seed capital and the ease of doing business need to be addressed to create a lakh jobs and hundreds of billions of dollars in value.”
He also proposed an initial sum of 150 core to create a world class IT hub “to take advantage of our competitiveness”. The Minister also announced that income taxes on Technical Services would be reduced from 25% to 10% with the aim of encouraging tech startups.
Readers will remember that during last year’s budget presentation the Minister had proposed a nationwide “District level Incubation and Accelerator Program” for incubation of new ideas and providing necessary support to accelerate entrepreneurship. He had also proposed a Rs 200 crore fund to establish a technology centre network to promote innovation, entrepreneurship and the agro-industry. These two ideas seem to have been clubbed together to setup the proposed startup incubation program.
It’s also worth noting that the Minister had proposed to establish a Rs 10,000 crore fund to attract private capital by providing equity, quasi equity, soft loans and other risk capital for startups. However, there was mention of this startup fund in today’s speech. In fact, there was a significant focus on startups in last year’s budget speech, including proposal for a Startup Village Entrepreneurship program to encourage rural youth to take up local entrepreneurship programs, and an initial sum of ₹100 crore had been provided for it. No mention of it this year.