Project
A project is a type of assignment, typically
involving research or design, that is carefully
planned to achieve a specific objective.
A project is defined as a sequence of tasks that
must be completed to attain a certain outcome.
Project refers to ” to any temporary endeavour
with a definite beginning and end”.
Project
A project is a group of unique, interrelated activities
that are planned and executed in a certain
sequence to create a unique product or service,
within a specific time frame, budget and the
client’s specifications.
A project is an organized program of pre-determined
group of activities that are non-routine in nature
and that must be completed using the available
resources within the given time limit
Definition
According to Harison, a Project can be defined as a
non-routine, non-repetitive, one-off undertaking ,
normally with discrete time, financial and
technical performance goals.
Project Management Institute , USA defines Project
as ‘ a system involving the co-ordination of a
number of separate department entities through
out the organization and which must be completed
within prescribed schedule and time constraints.
Project Management
Project management is the application of the
knowledge, skills, tools and techniques to
project activities in order to meet or exceed
stakeholder needs and expectations.
Project management is the discipline of
organizing and managing resources in such a
way that these resources deliver all the work
required to complete a project within defined
scope, time and cost constraints.
Project Characteristics
Objectives
Life cycle: (Conception stage, Design, Implementation,
Commissioning)
Definite Time limit
Uniqueness
Team Work
Complexity
Sub-Contracting
Risk & Uncertainty
Customer Specific
Response to Environment
Change
Forecasting
Attributes of a good Project Manager
Planning and Organizational skill
Personnel Management skill
Communication skill
Change Orientation
Ability to solve Problem
High Energy Level
Ambition for Achievement
Acceptability to take suggestions
Understanding the views of team members
Ability to develop alternative action quickly
Knowledge about the project management methods & tools
Cont..d
Ability to make self evaluation
Effective Time Management
Knowledge of Technology
Conflict Resolving skill
Team building skill
Resource Allocation skill
Entrepreneurial skill
Good Negotiation skill
Taxonomy of Projects
Based on type of Activity
- Industrial Project
- Non- industrial Project
Based on Location of the Project
- National Project
- International Project
Cont..d
Based on Project Completion Time
- Normal Project
- Crash Project
Based on Ownership
-Private Sector Project
-Public Sector Project
-Joint Sector Project
Cont..d
Based on Size
- Small Scale Project
- Medium Scale Project
- Large Scale Project
Based on Need
- New Project
- Balancing Project
- Expansion Project
Cont..d
-Modernization Project
-Replacement Project
- Diversification Project
- Backward Integration project
- Forward Integration Project
Project Identification
Project identification is a process in the initiating
phase of project life cycle for identifying a need,
problem, or opportunity.
The purpose of project identification is to develop a
preliminary proposal for the most appropriate set of
interventions and course of action, within specific
time and budget frames, to address a specific
development goal in a particular region.
Sources of Project idea
Identifying a new worthwhile project is a complex
problem. It involves careful study from many different
angles. Following are some of the sources from which
new project idea may emerge.
Performance of existing Industries
Availability of raw material
Availability of skilled labour
Import/ Export Statistics
Price Trend
Cont..d
Research Laboratories
Data of various publications
Consumption in Abroad
Identifying Unfulfilled Psychological needs
Analysis of Economic & Social Trends
Government Guidelines & Policies
Possibility of reviving sick units
Screening of project Ideas
Screening of project ideas under project
appraisal is a crucial initial step to evaluate
and select potential projects for further
analysis and development. This process
involves assessing the feasibility, viability, and
alignment of various project ideas with the
strategic objectives and resource capabilities
of the organization.
Steps in Screening of Project Ideas
1. Initial Idea Generation
Sources: Ideas can come from brainstorming
sessions, stakeholder suggestions, market
analysis, R&D, and competitor analysis.
Documentation: Brief descriptions of each
idea are documented for further evaluation.
2. Preliminary Screening Criteria
Strategic Fit: Alignment with organizational goals, vision, and
mission.
Market Demand: Assessment of potential market needs and
demand for the project's output.
Technical Feasibility: Initial check if the necessary technology
and expertise are available.
Resource Availability: Availability of financial, human, and
material resources.
Regulatory Compliance: Compliance with legal and regulatory
requirements.
Environmental Impact: Preliminary evaluation of the
environmental impact.
3. Initial Feasibility Analysis
Cost Estimates: Rough cost estimation to
check the financial viability.
Timeframe: Estimation of the time required to
complete the project.
Risk Assessment: Identification of potential
risks and challenges.
4. Scoring and Ranking
Weighted Scoring Model: Assigning weights
to various criteria based on their importance
and scoring each idea against these criteria.
Ranking: Ranking the ideas based on their
scores to identify the most promising ones.
5. Detailed Analysis of Shortlisted Ideas
Market Research: Detailed analysis of market
conditions, competition, and customer needs.
Technical Analysis: In-depth feasibility study
of technical aspects.
Financial Analysis: Detailed financial
projections, including costs, revenues, and
profitability.
Risk Analysis: Comprehensive risk assessment
and mitigation strategies.
6. Selection and Approval
Decision Making: Based on the detailed
analysis, the best project ideas are selected.
Approval: The selected ideas are presented to
decision-makers for approval and resource
allocation.
7. Documentation and Reporting
Report Preparation: Detailed reports on the
selected projects, including all analyses and
justifications.
Stakeholder Communication: Informing all
relevant stakeholders about the decision and
the next steps.
Importance of Screening in Project Appraisal
Efficiency: Helps in focusing resources on the
most viable and promising projects.
Risk Reduction: Early identification of
potential risks and challenges.
Strategic Alignment: Ensures that selected
projects align with organizational goals.
Resource Optimization: Efficient allocation
and utilization of available resources.
Project Formulation (Project
Preparation)
After identifying the idea to undertake a project, then
the promoter has to further analyze the same to
ensure that it has the potential . If investment will be
done on this project it would give attractive returns.
Project Formulation consists of four stages.
1. Pre- feasibility study
2. Functional studies (or Support studies)
3. Feasibility study
4. Detailed Project Analysis/ Report
1. Pre-feasibility study
A Pre-feasibility study is rough screening of
most promising idea(s) and discard the
unattractive options. This reduces the number
of options that are chosen to proceed with a
more detailed feasibility study and eventually
with business development, ultimately saving
time and money.
Objectives of Pre-feasibility study
a) To determine whether the project offers
promising investment opportunity
b) To determine whether in-depth analysis
required in way of market survey or
laboratory test for the project or not ?
Pre-feasibility study includes:
The market potential for the selected product / service
The technologies available and the technology suitable for
the project
The source, cost and availability of raw materials
The plant location
The plant capacity
The man power requirement in terms of labor , staff and
management personnel, their availability and cost
The investment required, the rate of return expected.
2. Support Studies (Functional studies)
Support studies may be conducted in any of the following areas
Market Study
Raw material/ input study
Project location study
Plant size study
Equipment selection study
3. Feasibility Study
Before making a final decision to take up a
project, the technical, economic , commercial
and financial justification of the chosen
project shall be ascertained in concrete terms.
Feasibility study is also known as “ techno-
economic feasibility study.”
Cont..d
Feasibility study includes followings
Technical feasibility
Economic viability
Commercial feasibility
Financial feasibility
4. Detailed Project Report
Detailed Project Report (DPR) will contain
almost same information contained in the
feasibility study but in a more detailed format.
The main idea of preparation of the DPR is to
formally communicate the project promoter’s
decision of starting new project to financial
institutions for their perusal and to
Government departments for getting their
approvals
Cont…d
The main sub divisions of a DPR are as follows
General information about the project
Background and experience of the project
promoters
Details and working results of industrial
concerns already promoted by project
promoter
Details of proposed project
Cont…d
Schedule of implementation of the project
Project cost
Sources of finance for the project
Working Capital Requirement
Marketing and Selling Arrangement
Profitability and cash-flow estimates
Mode of repayment of term loan
Government Approvals, Local body consent
Details of collateral security that can be offered to the
financial institutions
Tax Incentives for Project Investment decision
Tax incentives and tax planning are essential
components of project investment decisions in
India. They help optimize the tax burden and
improve the financial viability of projects.
Here's a detailed overview of tax incentives
and tax planning strategies in the context of
project investment in India
1. Sector-Specific Incentives
Infrastructure:
Section 80-IA: Provides deductions for profits generated from infrastructure
projects.
Section 35AD: Allows 100% deduction of capital expenditure for specified
businesses like setting up and operating cold chains, warehousing, and
affordable housing projects.
Manufacturing:
Section 115BAB: Offers a reduced tax rate of 15% for new manufacturing
companies incorporated on or after October 1, 2019, and starting production
before March 31, 2023.
Renewable Energy:
Accelerated Depreciation: Allows higher depreciation rates for renewable
energy equipment, reducing taxable income in the initial years.
Tax Holidays: Profits from certain renewable energy projects may be exempt
from tax for a specified period.
2. Geographical Incentives
Special Economic Zones (SEZs):
Section 10AA: Provides a deduction of 100% of
profits for the first five years, 50% for the next five
years, and 50% of plowed-back export profit for
the subsequent five years.
North-East and Hilly Areas:
Tax exemptions and subsidies are available for
investments in less developed regions to promote
balanced regional development.
3. Research and Development (R&D) Incentives
Section 35(2AB): Provides a weighted
deduction of 150% for expenditure on
scientific research and development.
Patent Box Regime (Section 115BBF): Offers
a concessional tax rate of 10% on income from
patents developed and registered in India.
4. Capital Gains Tax Exemptions
Section 54EC: Exemption of long-term capital
gains if the gains are invested in specified
bonds (e.g., bonds issued by National
Highways Authority of India or Rural
Electrification Corporation).
Section 54GB: Exemption of capital gains on
the sale of residential property if the sale
proceeds are invested in equity shares of an
eligible start-up.
5. Export Incentives
• Merchandise Exports from India Scheme
(MEIS): Provides duty credit scrips to
exporters of goods to offset infrastructural
inefficiencies.
• Service Exports from India Scheme (SEIS):
Offers duty credit scrips to service exporters.
Zero Based Project Formulation
A zero-based project creates unprecedented
visibility to each activity, step and task across
the project. This drives a continual
prioritization of activities, and regular
trimming of scope, costs and efforts that does
not directly contribute to the project's
objectives.
Cont..d
In a zero-based project, a company starts by
building the project scope and objectives from
the bottom up with a clean sheet of
paper. Such a surgical look at project scope
helps ensure the project aligns directly with
the corporate objectives—everything else
requires value-based justification driven by
economics, benchmarking, reliability or other
strategic drivers.
Project Management Objectives
To complete the project within the allotted funds
To complete the project within the scheduled
time limit
To execute the project in such a way that the
project meets the quality standards
To ensure that the project is completed to the
satisfaction of the end users
Social Objectives
Establishing the Project
Following are steps involved in establishing a project
Initiating
Planning
Organizing
Executing
Directing and Controlling
