Abstract:
The paper is a case study of Vadinar refinery in Gujarat. It examines the costs and benefits
associated with one of the world’s mega refinery projects highlighting the welfare impacts on
society. The paper briefly examines whether refining at Vadinar by Essar is of net economic
benefit to the region, state and the country by constructing a Social Cost Benefit Analysis of the
Vadinar Refinery Project. The paper analyses the local-level economic impacts (on-site labor
impacts, local revenue and supply chain impacts and induced impacts) and jobs supported by
Vadinar refinery construction and ongoing operations. The paper also analyses the regional (state
and country) level economic impacts; multiplier effect of income, tax and savings generated as a
result of the refinery operations, including other externalities associated with the project. There is
abundance of scope to reflect the strategic food and oil security of India from the
macroeconomic perspective; the gradual increase in investor and consumer confidence with
respect to self-reliance in production and consumption of oil and natural gas resources in the
country and the broader social impact of the project, which may be taken up in subsequent
research. A sequel to this paper will explore an approach to integrating the methods with a CGE
model framework.
