Parameters for Project Selection

Macro-Parameters for Project Selection:

The selection of a project should fit in with the environment and the considerations for such selection include:

a) Permissibility of such a project in the:

  • Existing legal and social condition;
  • Government policies relevant to such project;
  • Prevalent situation within the relevant industry including over-all market size with its growth and envisaged market share;

b) Foreign participation, foreign know-how and the liability to pay the foreign partner, as such;

c) Availability of funds from the Financial Institutions on top of the organization’s own equity participation and the condition of the capital market;

d) d. Opportunity for employment (with productivity);

e) Overall benefits for a specific project like export-oriented units (EOUs) or projects within export processing zones (EPZs).

f) Foreign participation with terms of ‘buy-back’;

g) Tax concessions relevant to such project;

h) Government subsidies relevant to such project, such locations planned;

i) Strength and weaknesses of the competitors in the industry relevant to such project.

Micro-Parameters for Project Selection:

The considerations within the micro-parameters for the selection of the project by the project owner (once the proposed project is favourable within the macro-parameters) should include:

a) The need of the organisation for such a project. The basic objectives should be directed towards solving the problems or availing of certain opportunities for investments as per the need.

b) The necessary resources should be available to the organisation, selecting such project including:

i. The initial fund for investment;
ii. The organizational strength to implement and run the project;
iii. The required technical know-how;
iv. Sourcing of the basic inputs like raw materials, utilities.

c) The economic viability of such a project

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