What Is The Need / Role of Project Formulation?


Project Formulation 1



Need/ Role/Importance/ Significance for Project Formulation:


          In a developing economy, an entrepreneur has to face a number of problems while establishing a new project. However, these problems can be avoided to a large extent, by undertaking project formulation at the right time. The following are the problems;


  1. Selection of Appropriate Technology-

       The first problem faced by entrepreneur is in the matter of selection of appropriate technology for his enterprise. Modern technology developed in the highly advanced countries may not be suitable for adoption in the developing countries, as the conditions prevailing differ from country to country.


  1. Absence of External Economies-

        The second problem relates the absence or non-availability of external economies. A project has to depend on other industries for the supply of raw materials, power, tools, spare parts etc. or an ancillary enterprises which can provide technical , financial & managerial services or on a complex network of transport & communication facilities or on an intricate system of business practices.


  1. Dearth of Technically Qualified Personnel-

           The third problem is the non-availability of technically qualified & appropriate personnel. Modern technology calls for a certain minimum supply of various skills that are generally lacking in developing countries.


  1. Resource Mobilization-

            The fourth problem is resource mobilization. In the context of present day development of the magnitude & the size of the project, it would be very difficult for an entrepreneur to provide the entire development capital that a project may need.


  1. Knowledge about Government Regulations-

             The government from time to time formulates its own policies regarding industry, import, export, taxation, price control etc. The entrepreneur must have a thorough knowledge about government regulations, policies & licensing procedures etc.


             These problems make the entrepreneur to undergo a lot of harassment & disappointment. But a project formulation, at the right time minimizes the severity & the magnitude of the above problems.




Like it? Share with your friends!



Facebook comments:

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Voting to make decisions or determine opinions
Formatted Text with Embeds and Visuals
The Classic Internet Listicles
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Upload your own images to make custom memes
Youtube and Vimeo Embeds
Soundcloud or Mixcloud Embeds
Photo or GIF
GIF format