2. Sectoral Projects
According to this classification, a project may fall in anyone of thefollowing sectors:
Agriculture and Allied Sector
Irrigation and Power Sector
Industry and Mining Sector
Transport and Communication Sector
Social Services Sector
Miscellaneous Sector The project classification based on economic sectors is found useful inresource allocation more especially at macro levels.
3. Techno-Economic Projects
Projects classification based on techno-economic characteristics fallin this category. This type of classification includes factors intensity-oriented classification, causation oriented classification and magnitude-oriented classification. These are discussed as follows:
Factor Intensity-Oriented Classification
Based on factor intensityclassification, projects may be classified as capital intensive or labor intensive. If large investment is made in plant and machinery, the projectswill be termed as 'capital intensive'. On the contrary, projects involvinglarge number of human resources will be termed as 'labor intensive'.
Where causation is used as abasis of classification, projects may be classified as demand based or rawmaterial based projects. The very existence of demand for certain goods or services makes the project demand-based and the availability of certainraw materials, skills or other inputs makes the project raw material-based.
In case of magnitude-orientedclassification, based on the size of investment involved in the projects, theprojects are classified into large scale, medium-scale or small-scaleprojectsDefinite procedure of selecting a project. Basically, project selectionconsists of two main steps:1. Project Identification2. Project Selection
Project identification is concerned with the collection, compilation andanalysis of economic data for the eventual purpose of locating possibleopportunities for investment and with the development of thecharacteristics of such opportunities. Opportunities, according Drucker (1955), are of three kinds; additive, complementary and break-through.