It is the first stage in project formulation. At this stage, the project idea is examined from the point of view of whether to go in for a detailed investment or not. As project idea is examined, in the context of internal & external constraints, three alternatives could be considered. First, the project idea seems to be feasible. Second, the project idea is not a feasible & third unable to arrive at a conclusion for want of adequate data. If it is feasible, we proceed to the second step, if not feasible, we abandon the idea & if sufficient data are not available, we make more efforts to collect the required data & design development.