Prospects of Project Appraisal in a Changing Economic Scenario

The Chartered Accountant, pp. 271-275, October 1992

Posted: 24 Jan 2005

See all articles by Satya Prakash Singh

Satya Prakash Singh

Panjab University - Business School

Manoj Anand

Management Development Institute

Abstract

The new industrial policy, which is both bold and liberal, aims at doing away with all that stands for non-performance, stagnation, low productivity, mis-management, corruption, poor quality, and a host of other age-old practices. The new order demands our lifeline-industries to grow with complete financial sufficiency. The Development Financial Institutions (DFIs) are already playing a role of sorts in the healthier functioning of industries. But they have their own limitations. The authors suggest that DFIs should appraise their project appraisal systems to suit new demands.

What will be the future of social cost benefit analysis (SCBA) in view of the shift of the Government policy and public mood towards market-competition-induced investment choice and privitisation? The need for social desirability of projects remains as ever. Thus, the DFIs will have to withstand the pressure of entrepreneurs who are motivated by profit-maximization objective, to reject SCBA in favour of the sole criterion of commercial profitability.

Keywords: Project Appraisal, Social Cost Benefit Analysis, India, Domestic Resource Cost, Effective Rate of Protection, Economic Rate of Return

JEL Classification: G20, G21, G28

Suggested Citation

Singh, Satya Prakash and Anand, Manoj, Prospects of Project Appraisal in a Changing Economic Scenario. The Chartered Accountant, pp. 271-275, October 1992, Available at SSRN: https://ssrn.com/abstract=622584

Satya Prakash Singh

Panjab University - Business School ( email )

Sector 14
Sector 14
Chandigarh, 160014
India

Manoj Anand (Contact Author)

Management Development Institute ( email )

Gurugram, Haryana 122001
India

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