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Social Cost Benifit Analysis

The document presents an overview of Social Cost Benefit Analysis (SCBA), highlighting its importance in evaluating the societal impacts of projects or policies beyond just financial metrics. It contrasts SCBA with traditional Cost Benefit Analysis (CBA), emphasizing the inclusion of social, environmental, and economic factors. A case study of the Delhi Metro Project illustrates the successful application of SCBA, demonstrating its value in improving urban mobility and reducing pollution.

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15 views14 pages

Social Cost Benifit Analysis

The document presents an overview of Social Cost Benefit Analysis (SCBA), highlighting its importance in evaluating the societal impacts of projects or policies beyond just financial metrics. It contrasts SCBA with traditional Cost Benefit Analysis (CBA), emphasizing the inclusion of social, environmental, and economic factors. A case study of the Delhi Metro Project illustrates the successful application of SCBA, demonstrating its value in improving urban mobility and reducing pollution.

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© © All Rights Reserved
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SOCIAL COST

BENIFIT
ANALYSIS
Presented by : Shweata Sarkar &
Sudhanshu
CONTENTS
1.INTRODUCTION 7. APPRAOCHES

2. MEANING OF SCBA 8. CASE STUDY

3. CORE DIFFERENCE BETWEEN CBA AND SCBA 9. CONCLUSION

4. OBJECTIVE

5. SIGNIFICANCE

6. ADVANTAGES AND DISADVANTAGES


INTRODUCTION
Cost Benifit analysis(CBA) is a systematic way to evaluate the cost and
benifits of a decision,project,or policy to determine if the benifit outway the
costs.

Social Cost Benifit Analysis (SCBA) is a method used to evaluate the overall
impact of the project or policy on society.SCBA considers both financial and
non-financial impacts,including social,environmental,and economic factors.
MEANING
• Systematic evaluation technique used for long term decision making.

• It emphasies technical and feasibility study.

• It focuses more on social impact.

• It supports Sustainable Development.

• It considers both Financial and non-financial impact


CORE DIFFERENCE BETWEEN CBA AND
SCBA

CBA SCBA
 Focuses primarily on financial costs  Broadens the scope to include
and benifits that directly impact the societal impacts assessing both market
project or organization. and non-market factors.

 Primarily considers stakeholders  Cosiders a broader range of


directly involved in, often focusing stakeholders,including the community
on investors business owner. government and the future generation
rteflecting society’s collective interests.
OBJECTIVE
ASSESSING SOCIAL GUIDING RESOURCE IMPROVING POLICY
IMPACT ALLOCATION DECISONS
Determinines the optimal Aids policy makers by
SCBA captures the benefits or
allocation of resources providing more comprehensive
costs to society
view by encouraging
investments

PROMOTING
SUSTAINABLE ENHANCING EQUITY
DEVELOPMENT AND INCLUSIVENESS
Ensures that projects contribute Helps evaluates how benifits
to long term sustainability and cost are distributed among
different population groups
SIGNIFICANCE
• INFORMED DECISION MAKING

• IDENTIFICATION OF NET SOCIAL BENIFITS

• INCLUSION OF EXTERNALITIES

• PROMOTION OF SOCIAL EQUITY

• LONG-TERM SUSTAINIBILTY

• TRANSPARENCY AND ACCOUNTABILITY

• RISK MITIGATION

• ENCOURAGEMENT OF RESPONSIBLE INVESTMENT

• ALIGNMENT WITH NATIONAL AND GLOBAL GOALS


ADVANTAGES DISADVANTAGES

•Maximizes the welfare of the •Difficult to quantify social


society. impacts.
•Ability to rank and prioritize •Time consuming and
limited resources. expensive.
•Improves transparency and
•Risk of manipulation
accountability.
•Data limitations
•Informed decision making.
•Subjectivity in valuation
•Encourages sustainable
development.
APPROACHES

UNIDO
(UNITED NATIONS INDUSTRIAL L-M Approach
DEVELOPMENT ORGANIZATION) (Little Mirrorless Approach)

This approach calculates financial profitability


This approach considers externalities, taxes,
using market prices, and then recalculates
income distribution, and other societal
using "shadow prices" to account for market
impacts beyond financial metrics. It views
imperfections. It focuses on efficiency, cost
efficiency, cost reductions, and redistribution
reductions, and redistribution
in parallel.
at various levels.
STAGES OF UNIDO APPROACH
• Specialized agency of the UN that assists countries economic and industrial development

UNIDO methods of project involves five stages:-

Stage 1: Calculation of the financial profitability


of the project measured at market prices

Stage 2: Obtaining the net benifit of the project


measured in terms if economic price

Stage 3: Adjustment for the impact of the


project on savings and investment.
Stage4 : Adjustment of the impact of the project
on the income and distribution.
Stage 5: Adjustment for the impact of the project
on merit goods and demerit goods whose social
values differ from their economic values.
L-M APPROACH
• Developed by I.M.D Littlr and James A.Mirrlees.

• The core of this approach is that the cost of using a resource in developing
countries differs widely from the price paid for it.

• It requires Shadow Prices to denote the real value of a resource to society.


CASE STUDY: DELHI METRO PROJECT
BACKGROUND:

Delhi metro is one of the largest urban transport


projects, was developed to reduce traffic congestion and
pollution in Delhi. The project involved multiple phases,
and a SCBA Analysis was conducted to evaluate it’s
impact on the city’s economy, environment ,and quality
of life.

SCBA Processes:

● Identifying Costs and Benefits


● Quantifying and Monetizing Costa and Benefits
● Social and Environmental factors
● Calculating Net Social Benefit
CONCLUSION
 It demonstrated that Delhi Metro
brought significant social and
economic value, with benefits like
improved urban mobility, lower
pollution levels, and reduced
commuting times .

 This successful implementation has set


a precedent for other Indian cities,
showing that thoughtfully planned
infrastructure can drive social and
environmental progress in densely
populated areas.

 This analysis justified the investment


in expanding the Metro network,
setting a precedent for similar projects
across India.
THANKYOU

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