Stakeholders, Spatial Locations and Time Horizons in an Extended Social Cost-Benefit Analysis : A Case of Pipalpankha Water Resource Project

The Cost-Benefit Analysis (CBA) has long been serving as an important instrument of decision-making of large development projects. The Social Cost-Benefit Analysis (SCBA) extends this to include the distributional impacts of projects. However, both CBA and SCBA received the criticism of major shortfalls, in terms of the choice of appropriate discount rate as well as incorrect prices arising from market imperfections. However, the rising importance and significance of environmental and ecological impacts of these projects, which is articulated in several environmental impact assessment studies, led to a renewed attack on SCBA. An extended SCBA addresses these impacts by incorporating the monetary value of impacts such as effects on health, ecology and environment. This paper attempts to illustrate extension of SCBA to include environmental costs and benefits in the case of a large water resource development project in India. In particular, it also accounts for the distribution of project benefits and costs across major stakeholders, spatial locations and time periods, thereby, demonstrates the utility of extended SCBA in project decisions