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Assignment On SCBA

SCBA stands for social cost benefit analysis. It is an important method for evaluating project alternatives and making well-informed decisions. SCBA focuses on social costs and benefits which can differ from monetary costs and benefits due to market imperfections. It is important for developing infrastructure projects and examining impacts on income redistribution, savings, sectoral adjustments, and more. Issues with shadow pricing include choosing a reference unit, assumptions made, data availability, treatment of taxes and subsidies, and reflecting long-run social opportunity costs.

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63 views4 pages

Assignment On SCBA

SCBA stands for social cost benefit analysis. It is an important method for evaluating project alternatives and making well-informed decisions. SCBA focuses on social costs and benefits which can differ from monetary costs and benefits due to market imperfections. It is important for developing infrastructure projects and examining impacts on income redistribution, savings, sectoral adjustments, and more. Issues with shadow pricing include choosing a reference unit, assumptions made, data availability, treatment of taxes and subsidies, and reflecting long-run social opportunity costs.

Uploaded by

Robiul Islam Robin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BGMEA UNIVERSITY OF FASHION & TECHNOLOGY

PROGRAM: MBA IN APPAREL MERCHANDISING


SUBJECT: PROJECT MANAGEMENT
SUBMISSION DATE:10-07-2020

ASSIGNMENT ON: WHAT IS SCBA? MENTION IT’S IMPORTANCE OF SCBA


WITHIN RATIONALE. MENTION ISSUES OF SHADOW PRICING.

SUBMITTED TO: SUBMITTED BY:

PROF. MD. MUINUDDIN KHAN MD ROBIUL ISLAM ROBIN

DEAN, FACULTY OF BUSINESS STUDIES, BUFT ID: 201-031-4222


Q: What is SCBA? Mention its importance within (rationale).
Mention the issues of shadow pricing.

SCBA means social cost benefit analysis. A social cost benefit analysis is a
good method to show the differences between project alternatives and provides
information to make a well-informed decision. Presentation of the uncertainties
and risk. A social cost benefit analysis has several methods to take economic
risks and uncertainties into account. SCBA has received a lot of emphasis in the
decades of 1960s and 1970s and in view of the growing importance of public
investments in many countries particularly in developing countries, where
governments have played a significant role in the economic development.

Rationale or Importance of SCBA:


In SCBA the focus is on the social costs and benefits of the project. These often
tend to differ from the monetary cost and benefits of the project. The principal
sources of discrepancy are:

 Market prices, which form the basis for computing the monetary costs
and benefits from the point of view of the project sponsor, reflect social
values only under conditions of perfect competition, which are rarely, if
ever, realized by developing countries. When imperfections exist, market
prices do not reflect social values.

 Development of infrastructure potentially needs SCBA rather than


commercial gainfulness.

 Contribution of projects towards savings by the nation, which is recycled


in the form of fresh investment to increase national income.

 From the private point of view, taxes are definite monetary costs and
subsides are definite monetary gains. From the social point of view,
however, taxes and subsides are generally regarded as transfer payments
and hence considered irrelevant.
 Foreign exchange generation and savings should be undertaken through
export-oriented industries (EOI) and import substitution industries (ISI).

 Impacts of the projects on redistribution of income should be examined.

 The concern of the society for savings and investment is duly reflected in
SCBA wherein a higher valuation is placed on savings and a lower
valuation is put on consumption.

 It encourage sectoral adjustments of the economy.

 Diversity of projects should be basis of national development strategies.

 A private firm does not bother how its benefits are distributed across
various groups in the society . The society , however, is concerned about
the distribution of benefits across different groups. A rupee of benefit
going to an affluent section.

 Project with environment and ecological adverse should be avoided or


minimized.

 Creation of merit goods or services like parks, public entertainment


places, roads and highways , educational institution etc.

 SCBA secure a balance growth of agriculture and industries.

ISSUES OF SHADOW PRICING:


 Choice of nume’raire
 Concept of tradability
 Source of shadow price taxes
 Consumer willingness to pay
 Based on assumptions
 No universality
 Non-availability of adequate and reliable data
 A static and timeless concept
 Indeterminable concept
 Biasness based on response and sample
 failure to reflect long run social opportunity cost
 FOB price for exportable items & e.g. price for importable item
 Social opportunity cost for social project is the basis of evaluation
 Externalities or indirect cost/effects of the project should be considered
 Effective rate of protection
 Taxes and subsides are considered as transfer payments.

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