Manual for Development Projects - Planning Commission

Chapter 2
Manual For Development Projects
Chapter 2 : PROJECT IDENTIFICATION
Sources of Project Identification
Plan Priorities/Plan Documents
Sectoral Analysis and Current Situation
Special Policy Directives
New Ideas/Areas of Investment
Potential Projects
Sources of Project Identification
PROJECT IDENTIFICATION
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2.1 Project identification is the first phase of the project cycle. The project is a notion, speculative
imagining of a proposal deemed fit for a prospective undertaking. It may be defined as a proposal
for investment to achieve certain objectives. J. Price Gittinger, in his book, "Economic Analysis of
Agricultural Projects" maintains that "all we can say in general about a project is that it is an activity
on which we will 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. It is something you
draw a boundary around and say: 'This is the Project'. It is something which is measurable both in its
major costs and returns. Normally it will have some geographical location or at least a rather clearly
understood area of geographic concentration. It will have a relatively well-defined time sequence of
investment and production activities. It will have a specific group of activities which we can identify
and estimate values of. It will be a partially or wholly independent administrative structure and set
of accounts".
2.2 Projects in various sectors are proposed and prepared by concerned ministries/departments. In
advanced countries, there are special organizations which are employed continuously in the field
surveys and necessary investigations required for formulation of feasible projects. These outside
agencies, engaged for the purpose, prepare complete project documents including cost estimates and
financial and economic analyses of such projects enabling the Government in appropriate evaluation
of their potential and fixation of their priorities in a particular sector. In less developed/developing
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9/23/2010