A Project simply means an investment opportunity exploited for profit. It is an idea or plan which is intended to be carried out or a finite task to be completed.
In the words of Gillinger “Project is a whole complex of activities involved in using resources to gain benefits”
A Project simply means an investment opportunity exploited for profit. It is an idea or plan which is intended to be carried out or a finite task to be completed.
In the words of Gillinger “Project is a whole complex of activities involved in using resources to gain benefits”
The World Bank defines a project as ‘an approval for a capitalinvestment develops facilities to provide goods and services’.
CHARACTERISTICS OF A PROJECT
A project is undertaken to achieve a purpose. The following are the characteristics of a project.
• A project involves investment of money and money’s worth.
• The objective of a project is to earn profit.
• It is concerned with production of goods and services.
• Every project has risk and uncertainty associated with it.
• It has a fixed set of objectives.
• It is subjected to a lot of change.
• It has a definite beginning and an end.
• It has a life cycle reflected by growth, maturity and decay.
• It is combination of various elements such as technology, equipment, materials, machinery and people.
• A project requires team work.
CLASSIFICATION OF PROJECTS
The different classifications are explained below:
1) QUANTIFIABLE AND NON-QUANTIFIABLE PROJECTS:
Quantifiable projects are those in which quantitative assessment of benefits can be made. Projects for industrial development, power generation, mineral development etc. fall under this category.
Non quantifiable projects are those in which the benefits cannot be measured quantitatively.
Projects involving health, education and defence fall under this category.
2) SECTORAL PROJECTS:
According to planning commission of India, a project may fall in the following sectors:
a) Agriculture and allied sector.
b) Irrigation and power sector.
c) Miscellaneous sector.
d) Transport and communication sector.
e) Industry and mining sector.
This classification is useful for resources allocation at macro levels.
3) TECHNO-ECONOMIC PROJECTS:
Projects may be classified into the following three groups:
A) Factor Intensity Oriented Classification: Project may be classified as Capital intensive or Labour intensive. If large investment is made in plant and machinery the project will be called
Capital intensive. If large investment is made in human resources, the projects will be termed as
Labour-intensive.
B) Causation Oriented Classification: It is classified as demand based or raw material based projects. If a project is started by an entrepreneur due to non-availability of certain goods or services and consequent demand for such goods or services the project is said to be based on demand. If project is started by an entrepreneur simply because of the availability of certain raw
materials, skills or other imputs, the project is said to be based on raw material.
C) Magnitude Oriented Classification: The size of investment forms the basis of classification.
May be classified as Large-scale, Medium-scale and Small-scale.
4) FINANCIAL INSTITUTIONS CLASSIFICATION:
The projects are classified according to their age and experience and the purpose for which the
project is being taken up.
They are as follows:
A) Profit Oriented Projects:
1) New projects.
2) Expansion projects.
3) Modernization projects.
4) Diversification projects.
B) Service Oriented Projects:
1) Welfare projects.
2) Service projects.
3) Research and development projects.
5) ACCORDING TO THE URGENCY OF THE EXECUTION:
It is classified into three. They are as follows:
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