Social Cost Benefit Analysis

PRESENTATION ON
SOCIAL COST BENEFIT

ANALYSIS
Submitted By:
Aarohi
Arzoo
Aayoushi
Nikhil
Social Cost Benefit Analysis
It is a methodology developed for evaluating investment

projects from the point of view of the society as a whole.
It aids in evaluating individual projects within the planning

framework which spells out national economic objectives &
broad allocation of resources to various sectors.
It is to analyze the social cost & total social benefits if we
accept any project.
In this we see whether return or benefits on this investment

are more than its cost from point of view of society in which
we are living.
RATIONALE OF SCBA
1. Market Imperfection: Market prices which form basis for
computing the monetary costs & benefit from paint of view
of project sponsor, reflect social values only under
conditions of perfect competition.
The common imperfections found are as:

Rating factor: It means some of raw material prices are
controlled by government.
Regulation for providing minimum wages factor: It also

affects social cost & benefits of any project, because
company must have to play this min wages.
2. Externalities: These are non-cash or benefits which an
organization suffer or got if it starts the project i.e. if
government makes road near your project plant, you can
get this facility without any payment.
3. Tax & subsidies: Tax is payment on the earning of

project & it will reduce our overall benefits .
4. Concern for saving: Division of benefits between
consumption & saving is relevant particularly in capital
scarce developing countries
5. Concern for Redistribution : A private firm does not

bother how its benefits are distributed across various
groups in society.
CASE STUDY
(SOCIAL COST BENEFIT
ANALYSIS OF DELHI
METRO)
DMRC was set up in May 1995 under the Indian Companies
Act.
It was joint venture between the Federal Govt Of India &
Provincial Govt Of Delhi state with equal equity.
Master plan has been drawn up for DM expansion covering
420 km to be completed by 2021.
FINANCIAL COST &
BENEFITS OF METRO
It is important to examine financial feasibility of DM before
actually taken up its economic appraisal. The financial
evaluation of a project requires analysis of its annual cash
flows of revenue & costs considering it as a commercial
organisation operating with the objective of maximizing
private profits.
As reported in RITES(1995a) the DM has been provided with
following concessions by GOI to make project viable:
DM is exempted from payment of income tax, capital tax,
property tax & custom duty on imports.
The DM is permitted to generate resources through property
development over a period of 6-20 years.
No dividend is paid on GOI share & equity till senior debt is
repaid fully by 20th year.
IDENTIFICATION OF
ECONOMIC BENEFIT & COST
DM contributes to the diversion of a very high proportion of
current passenger traffic from road to Metro & serves part of
growing passenger traffic demand in Delhi. As a result there
will be reduction in number of buses, passenger cars.
Therefore, also brings reduction in air pollution in Delhi
because of substitution of electricity for petrol & diesel &
reduction in the number of accidents on roads.
CONCLUSION
The Delhi Metro planned in four phases of an integrated
multi mode Mass Rapid Transport System (MRTS) provides
an alternative safe & comfortable mode of transport by rail to
a large fraction of passengers using road transport in Delhi. It
reduces travel time of people, reduction in the number of
accidents, saving in fuel consumption.
There are incremental income changes to a number of
economic agents: government, private transporters,
passengers, general public and unskilled labour.
GREEN STEEL PROJECT IN
INDIA : SOCIAL COST
BENEFIT ANALYSIS OF POSCO
ABSTRACT:
Indias effort to maintain its rapid economics growth rate
will depend largely on its Greenfield project .
The Indian steel industry is receiving huge domestic and
foreign investment in Greenfield projects in the steel
sector.
INTRODUCTION
A Greenfield project is a project that hacks any constraints
imposed by any prior work. The analogy is to that of
construction on Greenfield hand where there is no need to
remodel or demolish an existing structure.
CURRENT SCENERIO IN
GREENFIELD STEEL PROJECT IN
INDIA
The steel industry in India has been moving from strength to
strength and according to the annual report 2009-10 by the
ministry of steel , India has emerged as the fifth largest
producer of steel in the world.
UPCOMING GREENFIELD PROJECTS:
Areclor Mittals steel project in khumli district of
Jharkhand has been marrel by land acquisition issues for
the past couples of year.
JSM steel most talked about steel plant in west Bengal in
facing delays.
MAJOR CHALLENGES FOR
GREENFIELF STEEL PROJECT
Several challenges lie before the upcoming Greenfield steel
projects in India major one being:
1. Land acquisition
2. Environment clearances
3. Resettlement & rehabilitation policy of displaces person
for Greenfield projects.
UPCOMING STEEL PROJECTS IN
INDIA
As per the ministry of steel 222 moves have been signed by

various state government for setting up various steel units
in their respective state for total capacity of 276 million
tones.
IMPACTS OF PROJECT DELAYS
ON INTERNATIONAL INVESTORS
It will be too early to predict the impact of project delays on

international investor as India is an attraction destination,
since demand is strong. But foreign direct investment this
year is 25 % to 30% on year.
GOVERNMENT INITIATIVE
As per the PIB during 2009 , the government took as
number of fiscal and administration steps to contain steel
prices. Central value added on steel items was reduced
from 14% to 10% with effect from Feb. 2009.
CONCLUSION
India is going through a transitional phase Till now ,
environmental approvals weren't taken seriously and most
companies took is for granted that once they got the
appraisal they could expand capacities without having to
take further approvals.
THANK
YOU

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PRESENTATION ON

SOCIAL COST BENEFIT

It is a methodology developed for evaluating investment

It aids in evaluating individual projects within the planning

In this we see whether return or benefits on this investment

The common imperfections found are as:

Regulation for providing minimum wages factor: It also

3. Tax & subsidies: Tax is payment on the earning of

5. Concern for Redistribution : A private firm does not

As per the ministry of steel 222 moves have been signed by

It will be too early to predict the impact of project delays on

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