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Technical Efficiency in Public and Private Sectors in India: Evidence from the Post-Reform Years

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  • T. T. Ram Mohan

    (Indian Institute of Management, Ahmedabad)

  • Subhash C. Ray

    (University of Connecticut)

Abstract

While India’s state-owned enterprises are widely believed to be inefficient, there is a dearth of studies that document such inefficiency on any rigorous basis. Yet, since improvement in firm efficiency is one of the basic objectives of privatization, it is important to assess whether efficiency is indeed lower in the public sector than in the private sector. This paper compares the performance of state-owned enterprises with those of private sector firms in respect of technical efficiency. The comparison is made in eight different sectors over the period 1991-92 to 1998-99. We measure technical efficiency using the method of Data Envelopment Analysis. Judging by the average levels of technical efficiency, no conclusive evidence of superior performance on the part of the private sector is found.

Suggested Citation

  • T. T. Ram Mohan & Subhash C. Ray, 2003. "Technical Efficiency in Public and Private Sectors in India: Evidence from the Post-Reform Years," Working papers 2003-22, University of Connecticut, Department of Economics.
    • Handle: RePEc:uct:uconnp:2003-22
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    References listed on IDEAS

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    2. T T Ram Mohan, 2007. "Privatization and FDI: the Indian expeprience," ASARC Working Papers 2007-20, The Australian National University, Australia South Asia Research Centre.
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