Manual for Development Projects - Planning Commission

Chapter-1
Page 10 of 13
framework within which project planning is undertaken. On the one hand, the overall size of the
PSDP is constrained by the macro-economic framework of the plan, suitably updated by the
current events. On the other, the relationship is explicitly emphasised by the question in the PC-
I proforma which asks whether the project in question is in the Plan and, if not, what
justification may be given for it.
1.43 Plans frequently form the basis of identifying new projects. Under a systematic planning
procedure, planners determine general guidelines for the fulfilment of overall development
goals which are further translated into specific sectoral objectives, alongwith overall resource
allocation between them. Sectoral planning needs more specific information about the resources
and constraints of the sectors concerned. After the collection of this information, disaggregated
project programmes are devised which are individually appraised in the light of guidelines and
macro-economic parameters provided by the higher-level planners.
1.44 No development plan can be formulated in isolation from the projects nor the projects
designed independently of the development plan. In fact the success of the development plan
depends on how successfully this plan can be converted into a set of projects which are feasible.
The overall development plan can be decomposed into sectoral plans and each sectoral plan can
further be decomposed into projects. Keeping in view this relationship between projects and the
plan, one can argue that viability of the projects would ensure attainment of the desired
objectives of the development plan.
Definition of Project and its Contribution Toward Achievement of Overall Plan
Goals/Objectives.
1.45 Projects are defined in different ways. The definition given in the UN Manual on
Programming Techniques for Economic Development, produced under United Nations,
ECAFE, 1960 defines a development project as follows:-
"the smallest unit of investment activity to be considered in the course of programming. It will,
as a rule, be a technically coherent undertaking which has to be carried out by a private or
public agency and which can be carried out, technically speaking, independently of other
projects. Examples of projects are the building of a factory, the construction of a bridge or a
road, the reclamation of a piece of land".
1.46 We can also say that from the stand point of economics, a project is the minimum
investment which is economically and technically feasible. A project is, thus, an activity on
which we spend money in expectation of returns and which logically seems to lend itself to
planning, financing and implementation as a unit. It is a specific activity with a specific starting
point and a specific ending point intended to accomplish a specific objective. Normally it will
have some geographic location, specific clientele, defined time sequence of investment and
operation and a bunch of benefits which can be quantified.
1.47 Projects have also been described as "the cutting edge of development" - they put teeth
into development plans. For most development activities, careful project preparation in advance
of expenditure is, if not absolutely essential, atleast the best available means to ensure efficient
economic use of capital funds and to increase the chances of on-schedule implementation.
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9/23/2010