Problem with creating PPA

Do you really want to create a PPA (Personal Package Archive), or do you just want to build a .deb package locally?

Are you sure that you didn't mistype the file name ("compact" instead of "compat")?

What is the output of

cat debian/compat

(when located in the right directory)?

Yes, the main goal is to create PPA so, that users can install using PPA.

Sorry, I mistyped "compact" instead of "compat".
The output of the command: cat debian/compat is 10

After correcting typing mistake and ran again, got an error:

dh binary --with python2
   dh_testroot
   dh_prep
   dh_auto_install
 python setup.py install --force --root=/home/himanshu/Desktop/ubtu/debian/osdag --no-compile -O0 --install-layout=deb
usage: setup.py [global_opts] cmd1 [cmd1_opts] [cmd2 [cmd2_opts] ...]
   or: setup.py --help [cmd1 cmd2 ...]
   or: setup.py --help-commands
   or: setup.py cmd --help

error: option --install-layout not recognized
dh_auto_install: python setup.py install --force --root=/home/himanshu/Desktop/ubtu/debian/osdag --no-compile -O0 --install-layout=deb returned exit code 1
debian/rules:3: recipe for target 'binary' failed
make: *** [binary] Error 1
dpkg-buildpackage: error: debian/rules binary subprocess returned exit status 2

Using setuptools version 41.0.1
Thanks

This isn't a Launchpad-specific problem; it sounds like you're already iterating on this locally, so Launchpad isn't involved except in that it hosts Ubuntu and might potentially host your PPA in the future. As such I'm reassigning this question to Ubuntu.

In this case, it sounds like setup.py is broken somehow, since the normal Python distutils/setuptools frameworks support the --install-layout option. I guess something in the directions you're following has misled you, but I'm afraid Launchpad staff don't have the resources to help with open-ended packaging questions like this.

For diagnostic purposes please provide the output of the commands

uname -a
lsb_release -crid
dpkg -l | grep setuptools

uname -a
Linux ideapad 4.15.0-51-generic #55-Ubuntu SMP Wed May 15 14:27:21 UTC 2019 x86_64 x86_64 x86_64 GNU/Linux

lsb_release -crid
Distributor ID: Ubuntu
Description: Ubuntu 18.04.2 LTS
Release: 18.04
Codename: bionic

dpkg -l | grep setuptools
ii python-pbr 3.1.1-3ubuntu3 all inject useful and sensible default behaviors into setuptools - Python 2.x
ii python-setuptools 39.0.1-2 all Python Distutils Enhancements
ii python3-setuptools 39.0.1-2 all Python3 Distutils Enhancements

Is it possible that error can be caused by the default python version?

As already written by Colin Watson:
You seem to have a foreign version of setuptools that does not fit to the debhelper packages (your version 41.0.1 versus version 39.0.1 installed by Ubuntu)

Thanks, it worked after changing version of setuptools from 41.0.0 to 39.0.1.
The folder structure is like:
-debian
-osdag
-dependencies
-install-osdag.sh
-setup.py
The bash script is supposed to install python dependencies from dependencies folder using the command 'conda install' and creating workspace folder etc.
I want this script to run during the installation process and install packages. How to manage the dependencies folder and installation script to accomplish this?
How can I include dependency folder so it would be available during installation with PPA?

Thanks again for helping me out.

I suggest that you read the Ubuntu packaging guide
http://packaging.ubuntu.com
and eventually also the Debian packaging guide (which is also relevant for Ubuntu)
https://wiki.debian.org/Packaging
https://wiki.debian.org/IntroDebianPackaging