Symbiosis Centre for Management and

Human Resource Development

MBA IDM
(Batch 2019-21)

Social Cost Benefit Analysis

Assignment 2

Submitted By
Balaji M(19020344012)
Prachee Muzumdar(19020344031)
Prashant Agrawal(19020344032)
Priya Singh(19020344034)
Rishabh Sindhu(19020344035)
Transport Sector
Transport system of a country refers to the different means which carry men and material
from one place to the other.

Transportation is the foundation stone of economic infrastructure. It helps in the

development of trade, commerce and industry. Transportation removes the hindrance of
place and facilitates the movement of goods from producers to consumers. It also helps in
removing regional inequalities.

Transportation has assumed much importance in developing economy like ours for rapid
economic growth. If agriculture and industries are supposed to be the body of the country,
transportation may be said to be the nerves and veins of the economy. These days
transportation is known as the symbol of civilization.

Advantages of Transport:

The advantages of transport can be realised from the social and economic progress of the
nation which have been generated by this sector in India during the plan periods.

Economic Benefits

 Better Production in both Agriculture and Industrial Sectors:

 Reduction in Cost of Production:
 Reduction in Scarcity
 Growth in Foreign Trade
 Specialization of Labour and Mobilization of Resources
 Promotion of Tourism
 Expands the Market

Social Benefits
 More Employment Opportunities
 Education Expansion
 Social and Cultural Spirit
 Social and Cultural Spirit
 Relationship between Villages and Cities

Means of Transport:

The various means of transport are discussed below:

(i) Railways
(ii) Airways
(iii) Seaways
(iv) Roadways
Railways
Rail projects typically aim to improve railway services and network infrastructure. No
incremental benefits are reductions in user costs for existing passengers, freight shipments,
and operators. Where a project causes a diversion of traffic from roads to rail, the cost
savings will accrue not just to those users diverted to rail, but also to those who continue to
use the road network as a result of lower congestion there.
Airways
Airport transport projects usually involve construction, upgrading, or rehabilitation of
airport infrastructure and associated facilities to increase the capacity to handle higher
traffic. Investment projects in airport infrastructure can be divided into those devoted to
processing aircrafts (named airside) and to those processing passengers (named landside).
No incremental benefits refer to cost reductions for existing users (passengers, cargoes, and
operators) resulting from lower travel, access and waiting time; improvements in service
reliability 34 Guidelines for the Economic Analysis of Projects and predictability; and
reduction in operating costs.
Seaways
Port projects include construction of new ports or upgrading existing ones to increase
passenger and cargo handling capacity as well as to improve operational efficiency.
Power Plant

A power station, also referred to as a power plant and sometimes generating station or
generating plant, is an industrial facility for the generation of electric power. Power stations
are generally connected to an electrical grid.

Many power stations contain one or more generators, a rotating machine that converts
mechanical power into three-phase electric power. The relative motion between a magnetic
field and a conductor creates an electric current.

The energy source harnessed to turn the generator varies widely. Most power stations in
the world burn fossil fuels such as coal, oil, and natural gas to generate electricity. Cleaner
energy sources include nuclear power, and an increasing use of renewables such as solar,
wind, wave and hydroelectric.

The benefit of incremental consumption from a transmission (or distribution) project will also
depend on the availability of surplus generation and distribution (or transmission) capacity. If surplus
capacities are not available for incremental consumption, extra investment would be required. In
such cases, again a system approach should be applied by combining the transmission, distribution,
and generation components in the appraisal, so that the extra cost elsewhere in the system is added
to the project cost to give net benefits. Benefits from improvements in reliability of service are also
relevant for transmission and distribution projects.
Water Sector
Water supply projects offer either improved services to households already connected to
the main system or provide connections to households not yet served who, without the
project, would otherwise rely on less satisfactory sources of supply such as wells,
standpipes, or water vendors.

The provision of water supply, sanitation and wastewater services generates substantial
benefits for public health, the economy and the environment. Benefits from the provision of
basic water supply and sanitation services such as those implied by the Millennium
Development Goals are massive and far outstrip costs. Benefit-to-cost ratios have been
reported to be as high as 7 to 1 for basic water and sanitation services in developing
countries. Wastewater treatment interventions can generate significant benefits for public
health, the environment and for certain economic sectors such as fisheries, tourism and
property markets, although these benefits may be less obvious to individuals and more
difficult to assess in monetary terms. Finally, protecting water resources from pollution and
managing water supply and demand in a sustainable manner can deliver clear and sizeable
benefits for both investors in the services and end water users. Investments in managing
water resources are going to be increasingly needed in the context of increasing water
scarcity at the global level. The full magnitude of the benefits of water services is seldom
considered for a number of reasons. Non-economic benefits that are difficult to quantify but
that are of high value to the concerned individuals and society, i.e. non-use values, dignity,
social status, cleanliness and overall well-being are frequently under-estimated. In addition,
benefit values are highly location-specific (depending on the prevalence of water-related
diseases or the condition of receiving water bodies, for example) and cannot be easily
aggregated.

A water supply project may generate benefits by reducing technical losses resulting from
avoided leakages. When a water supply project introduces a metering system, it can also
lead to more efficient use of water resources. These benefits can be treated as incremental
as they will add to consumption.

Health benefits can be expected to accrue from the provision of clean water to replace
lower-quality supplies. These are additional benefits when valuing non incremental output.
They can be estimated in terms of avoided public and private medical costs and gains in
income and productivity due to lower incidence of illness. For incremental output, the
measure of willingness to pay used should in principle have already considered positive
health benefits from improved water supply and, hence, no separate valuation of health
benefits is needed.
Urban Development
Urban development projects are multisector and often include components of water supply
and sanitation, wastewater treatment, solid waste management, urban rehabilitation,
transport and environmental improvements, and housing. Where subcomponents of an
urban project can be treated as discrete activities, so that benefits and costs of one
subcomponent are not dependent on the implementation of other subcomponents, project
economic analysis should be undertaken for each subcomponent.
Urban expansion in India will happen at a speed quite unlike anything the country or the
world has seen before. It took nearly 40 years (from 1971 to 2008) for India’s urban
population to rise by nearly 230 million; it will take only half that time to add the next 250
million. This expansion will affect almost every state. For the first time in India’s history, five
of its largest states will have more of their population living in cities than in villages. This
interactive graphic offers a map of urbanization by state and notes which cities are poised to
surpass the 4-million mark in population.
Benefits
Trade and commerce: Urbanization advances the country’s business sectors by providing
more jobs and a more diverse economy. A vast network of goods and services has helped
develop modern commercial institutions and exchanges that have empowered the growth
of urban areas. Commercialization and trade offers town and cities better business
opportunities and returns compared to rural areas. Rural citizens come to urban places with
their goods and needs for products and services only available in urban areas.
Tourism industries: More people in cities means the need for better transportation systems.
Foreigners are attracted to cities with great transportation for easy mobility as well as
unique attractions partially supported by infrastructure. It provides great foreign currency
inflows for the cities’ economies.
Culture and Sciences: Improvements in culture and sciences are projected to increase
through increased urbanization. As diverse cultures interact, work, and communicate with
one another in close proximity, cultures are integrated more smoothly. In addition, access to
better educational facilities and living standards (like better sanitation, healthcare, and
housing) can create better recreational lifestyles and better social life. These reasons
encourage more people to migrate into cities and town to obtain a variety of social services
and benefits which are widespread and limited in rural areas.
Agriculture
Source of Livelihood
Around 70% of people directly rely on agriculture as a livelihood. The result of the non-
development of non-agricultural activities to absorb the fast-growing population is at a very
high percentage in agriculture
Importance of Agriculture in Indian Economy:
Even Though industry has been playing a crucial role in Indian economy, still the
contribution of agriculture in the development of Indian economy cannot be denied
Contribution to National revenue
Agriculture is an important source of national income for most developing countries.
However, its quite opposite for developed countries, agriculture contributes a smaller
percentage to their national income.
Economic Development
As agriculture employs many people, it contributes to economic development which results
in the national income level, as well as people’s standard of living, is improved. The fast rate
of development in the agriculture sector offers progressive outlook as well as increased
motivation for development. Therefore it aids to create a good atmosphere for the overall
economic development of a country and economic development depends on the
agricultural growth rate.
Agriculture plays vital role in generating employment:
In India at least two-thirds of the working population earn their living through agricultural
works. In India other sectors have failed generate much of employment opportunity the
growing working populations
Food Security
A stable agricultural sector ensures a nation of food security. The critical requirement of any
country is food security. It prevents malnourishment that has traditionally been believed to
be one of the major problems faced by developing countries. Most of the countries rely on
agricultural products as well as associated industries for their main source of income.
Need of labour force:
A large number of skilled and unskilled laborers are required for the construction works and
in other fields. This labour is supplied by Indian agriculture.
Greater competitive advantages:
Indian agriculture has a cost advantage in several agricultural commodities in the export
sector because of low labour costs and self- sufficiency in input supply.
Environmental Protection and Conservation
Biodiversity and Habitat Protection
As land is preserved throughout the region, an important environmental benefit is the
protection of unique habitat and regional biodiversity. Wildlife and vegetation depend on
undisturbed natural areas for food, shelter, and reproduction.
Better Air Quality
Trees are called the earth's lungs because not only do they provide oxygen for us to breathe,
but they clean the air of many harmful pollutants. These projects have an overall positive
effect in the improvement of ventilation. By protecting trees, vegetation helps play a
significant role in improving air quality in the region.
Economic Benefits of Land Conservation
The conservation of natural lands and of working farms and forests can generate financial
returns, both to governments and individuals, and create significant cost savings.
More than health and food benefits, conserving land increases property values near
greenbelts, saves tax dollars by encouraging more efficient development, and reduces the
need for expensive water filtration facilities. Many studies have demonstrated the
tremendous economic benefits of land conservation.
Conserving natural lands, working farms and forests, and the creation of trails and parks are
often viewed in terms of their costs but still these often generate financial returns, both to
governments and individuals, and create significant cost savings to governments in the
provision in services. Preservation projects can have a greater economic return than the
money initially invested into the project. This is not meant to state that conservation is
always good and development always bad. Nor is it meant to diminish the importance of the
environmental reasons for conservation.
Climate Change and Greenhouse Gas Emissions
Some projects may reduce emissions from non-incremental outputs, however increase
emissions from incremental outputs. For instance, street improvement can decrease
congestion that helps to minimize emissions from the everyday traffic, but can additionally
generate new traffic that will increase emissions. Reduction of GHG emissions can be
treated as a global attain and their increase as a world loss. Although person international
locations may additionally be affected in solely a confined way from global impacts, given
ADB’s policy on climate change, it is terrific to consist of international climate-related good
points or losses as phase of economic advantages and prices generated through a project.
For the functions of venture financial analysis, the EIRR and/ or ENPV with and barring
considering international affects of GHG emissions must both be reported, and the one with
the international impacts have to be used as the foundation for making funding decisions.
Cost-effectiveness evaluation must additionally contain the social fee of GHG emissions.

A evaluate of the empirical estimates of the world social value of carbon suggested by the
Intergovernmental Panel on Climate Change17 suggests a unit cost of $36.30 per ton of CO2
or its equivalent in 2016 expenses for 2016 emissions, to be extended by 2% annually in real
terms to enable for the plausible of increasing marginal injury of world warming over time.
This unit value can be used to estimate the advantage in damage prevented for initiatives
that limit emissions and the price in damage created for projects that amplify emissions. The
unit value may also be revised in the future as extra and new estimates of global warming
harm become available.
Education
Education projects can create a wide scope of financial and social advantages. Monetary
advantages can incorporate asset cost reserve funds through framework improvement,
higher work, and expanded work efficiency and procuring openings. Impalpable social
advantages can incorporate a more beneficial way of life, more prominent sexual
orientation value and social portability, and progressively tolerant social dispositions.
Nonetheless, these social advantages frequently can't be satisfactorily estimated and
esteemed at venture level. Where sufficient advantage valuation is beyond the realm of
imagination, cost-viability examination, contrasting a proportion of instructive effect and
undertaking costs, ought to be applied, which can be enhanced by a multi-criteria
investigation. Some training undertakings will have targets that loan themselves to a full
venture monetary examination. For instance, at the point when the target of a venture is to
build adequacy of administration conveyance (such as redesigning of instruction data the
executives frameworks and the board limit upgrades) or to decrease costs without
expanding limit, (for example, redesign), the advantages will be non-incremental and can be
estimated in asset cost investment funds coming about because of the venture. Ventures
that extend access to training produce steady advantages. In a few cases, for example,
ventures identified with TVET, steady advantages might be estimated by the work and the
profit capability of understudies who graduate through the program, as contrasted and the
business and income with a lower instruction or preparing level in the without venture case.
The effect of extra-long stretches of instruction on income might be assessed from overview
information utilizing factual models. Be that as it may, such outcomes are regularly
dependent upon a significant level of vulnerability, and the affectability of venture results to
their suspicions should be tried. At the point when a full monetary investigation is done for
instruction venture, it is essential to recognize open advantages from private advantages.
Private net advantages are post-charge higher income short private schooling costs, for
example, expenses and travel, what's more, lost income while at school past the school
leaving age. Open net advantages, which are the focal point of financial investigation, are
higher income less the full expense of training, including both extra private expenses (yet
barring any charges as these are an exchange from families to the venture or the legislature)
and expenses of contributing in and working the task concerned.

Health
The primary function of health systems is to provide high-quality and universal health
services. At the same time, through their spending and investments, health systems play an
important role in the status and stability of national and regional economies. To date, this
economic contribution has not been captured. Health systems play an increasingly
important role in driving inclusive and sustainable development through responsible
practices in the areas of employment and the purchasing of goods and services. This social
benefit of health systems is not well documented or currently considered in many
mainstream policies and practices. This report sets out the rationale, evidence and methods
to understand the significant potential economic and social impacts and benefits across the
WHO European Region. The work seeks to support broader efforts to see health systems as
key in promoting equitable and inclusive development, helping to create benefits for the
whole community, in particular for those who are often left behind. Health and well-being
contribute to economic and social progress and in turn, economic security and social
cohesion are two key determinants of health. The WHO Regional Office for Europe’s
forthcoming European Health Equity Status Report shows that progress to achieve better
social and economic conditions for health is mixed, and that lack of economic security and
of social cohesion are major factors in the differences between countries, in terms of gaps in
life expectancy, premature morbidity, and life-limiting illness across all WHO European
Region Member States. In addition to health systems’ function to protect and promote the
health of the population, they have many economic and social impacts, which have been
largely overlooked to date. By making their social and economic impacts visible, health
systems will benefit from a stronger position in local and national development plans and
investment strategies. This will also make a significant contribution to shifting the debate
from health systems being perceived as only representing a cost, to them being understood
as mechanisms that drive economic stability, and as essential partners for achieving social
and economic well-being.
Regional cooperation project
A regional cooperation project usually involves two or more countries and requires that the
project generates benefits that would not be available to equivalent national projects
located in the participating countries. When a project is part of multi country plans,
agreements, or mechanisms of regional cooperation, it can also be considered a regional
cooperation project event if it involves only one country. Economic analysis of regional
cooperation projects requires the calculation of the returns for both the region and
individual countries. The regional economic net present value (ENPV) gives the total change
in welfare for the group of participating countries, which must be equal to the sum of the
national ENPVs. The principles of benefit valuation from the national case apply to regional
cooperation projects. A special focus is needed to identify and value the additional benefits
arising from regional cooperation, which will vary across sectors but are likely to be based
on a variant of one or more of the following effects:
(i) Generation of additional investment by attracting external funding, such as foreign direct
investment, to at least one of the participating countries that would not be forthcoming for
nationally based projects;
(ii) Facilitation of technology transfer alongside the increased foreign direct investment;
(iii) Capture of economies of scale and efficiency gains from regional specialization based on
selling in a larger market; (iv) Generation of agglomeration and network effects through the
development of cross-border economic corridors; and
(v) Creation of broad cross-border effects such as the generation of additional trade
through improved transport and communications, improved environmental cooperation
(such as control of floods and pollution), and greater control of transmittable disease.
Where macro distortions for foreign exchange and unskilled labor are significant, national
adjustments must be made to costs and benefits of traded goods and unskilled labor costs
using national conversion factors. Where these factors differ between participating
countries, the adjustments must be allowed for. Since several countries can be involved in a
regional project, it is necessary to convert benefits and costs into a common currency
(normally the US dollar).