Explain the purpose of conducting a techno-economic study before launching a project.

Desk Research and Techno-Economic Survey
It is a part of project identification. Desk research and techno economic survey are considered as two important tools of project identification. While collection and use of information from the sources like journals, magazines, reports etc., is called desk research, identification of industrial development potential of an area through investigation conducted by a team of experts is called techno-economic survey.

The following sources are useful for data and product identification:-
11.1 Industrial potential surveys
11.2 Lead Bank Survey Reports
11.3 New process/product development in research laboratories
11.4 Literature on industries within the country and abroad
11.5 Import/export statistics
11.6 Profitability studies of selected industries
11.7 Studies on price and shortage of certain commodities

There are four types of industries as follows:-
1. Demand-based industries
2. Resource-based industries
3. Import substitution industries
4. Export-Oriented Industries

i. Demand-based industries – Demand-based industries are those industries which will supply raw materials and component parts to the existing large industries. These existing large industries are called parent industries. The industries which are supplying raw materials and component parts to parent industries are called ancillary industries/units.
E.g. Parent Industries like BHEL, MARUTI UDYOG LTD etc., are dependent on several ancillary SSI units for its raw materials and certain component parts. So, the prospects of the ancillary units are linked to the fortunes of parent industries. Therefore, a detailed survey/analysis should be made about the fortunes of parent industry and the experience of the ancillary unit before setting up any ancillary unit. Similarly, for setting up a workshop or service unit, the following factors should be studied in a detailed manner:
a) Local competition b)Market demand c)Orders on hand/prospects of future orders etc. Even Central and State Government Departments are dependent on many ancillary units floated by them for purchase of their requirements. For e.g. Tamil Nadu Government is dependent on TANSI for its office furniture and equipment.

ii. Resource-based industries – These industries should be set up at or near the place where its inputs/raw materials are abundantly available.
E.g. a rice bran oil mill should be set up in a place where rice mills arelocated. Similarly, poultry feed units should be located near oil mills and so on. The resource based industries should ensure the availability of necessary raw materials required by them.
iii. Import Substitution Industries – Import Substitution Industry is one which manufactures a product which will be the substitute for a product being imported. Before setting up this type of industry, one should analyse the following:-
a) Government Import Policy
b) Present Demand
c) Landed price of the imported items
d) Quality differences, etc.

iv. Exportoriented Industries – Export-oriented units should study/analyse the following factors before setting up its unit:-
a) Export statistics
b) Demand
c) Potential of foreign markets
d) Other relevant issues.