Ques. What are the steps used in formulation of project report? Ans.

PROJECT REPORT
A project report is a record of any sort of project, whether it is a school project, business project, or research project. Most commonly, project reports are written to record the beginning, middle and end of specific project events, such as business initiatives or school experiments. A project report can be written about almost any topic, in fields such as science, marketing, education, or engineering.

PROJECT FORMULATION
Project formulation is a process whereby the entrepreneur makes an objective and independent assessment of various aspects of an investment proposition of a project idea for determining its total impact and also its liability. This forms an important stage in the pre-investment phase that is the period from the conception of an idea until the final analysis to decide about the future of the project idea. This makes it an analytical management aid. The aim of project formulation is to achieve the project objectives with the minimum expenditure and adequate resources.

Steps in Project Formulation

A project comprises of a series of activities for achieving predetermined objectives. In this view the objectives of the project should be defined as precisely as possible. The objectives may be social, economic, or combination of the both. They can be defined under the following categories. 1. General objectives: A general objective merely states in broad terms the achievements expected of the project. 2. 2. Operational objectives: Operational objective specifically mentions results expected from the implementation of project. The definition of objectives in clear terms helps in quantifying physical, financial, human & other resources requirements.

Stages of Project Formulation

The process of project development has seven distinct & sequential stages. The project formulation is a result of completion of these stages. The stages are: 1. Feasibility analysis 2. Techno-economic analysis 3. Project design and Network analysis 4. Input analysis

5. Financial analysis 6. Social Cost-Benefit analysis 7. Pre-investment analysis.

1. Feasibility analysis
At this stage, the project idea is examined from the point of view of whether to go for detailed investment proposal or not. The project idea is examined in the context of internal & external constraints three alternatives could be considered Project idea seems to be feasible or not feasible or unable to arrive at conclusion. If project idea is feasible we go to second step else abandon the idea. 2. Techno-economic analysis In this step, estimation of project demand potential and choice of optimal technology is made. It is necessary to know the market for the goods/services produced by the project implementation. Therefore market analysis is also in-built in this step. Techno-economic analysis gives the project a unique individuality and sets the stage for detailed design development. 3. Project design and network analysis This step defines individual activities which constitute the project and their interrelationship with each other. The sequence of events of the projects is presented. Detailed work plan of the project is prepared with time allocation for each activity and presented in a network drawing. Project design is the heart of the project as based on this, resources can be detailed and provided to the project.

4. Input analysis
This step assesses input requirement during construction of the project and also during the operation of the project. The input requirements on quantitative and qualitative basis for each activity are determined and total input requirements are worked out. This determines project feasibility from the point of view of resource requirements. This analysis also helps in assessing the cost and helps financial analysis and cost-benefit analysis.

5 . Financial analysis
This stage involves in estimating project cost, operating cost & funds requirements. Financial analysis also helps in comparing various project proposals on common scale, thereby aiding the decision maker. Some of the analytical tools used in financial analysis are discounted cash flow, cost-volume-profit analysis and ratio analysis. Since the costs

&benefits as the outcome of the project has longtime-horizon it is necessary to exercise due care& foresight in financial forecasts.

6. Cost-Benefit Analysis
Overall worth of the project is the main consideration. There are three categories 1. Primary-Cost-benefit analysis from the point of view of project implementing body. 2. Secondary- Cost-benefit from the point of view of other than project implementing body. Also called as spill-over or multiplier effect. 3. Tertiary- Non quantifiable spill-over or multiplier effect.

7. Pre-investment analysis
The project proposal gets a formal and final shape at this stage. All the results obtained in the above steps are consolidated and various conclusions arrive at to present a clear picture. Now, at this stage the project sponsoring body, project implementing body and the external consulting agencies are able to decide whether to accept the proposal or not. And investment decision regarding the project can be taken by project implementing body.