Productivity and efficiency in state transport undertakings in India

Abstract

The main aim of this study is fourfold. First, it aims to put forward new information concerning the productive efficiency of the State Transport Undertakings (STUs) in India. The analysis is based on estimation of the levels as well as growth of gross productivity of sample STUs using multilateral index procedures. The estimates of gross productivity are then examined for their association with operating characteristics of the individual STUs. Productive efficiency estimates are then calculated by separating the effects of variations in the variables beyond managerial control from the gross productivity measures. We also examine the temporal relationship of the cross-sectional rankings of individual STUs productive efficiency estimates. To address this issue, we calculated Kendall s index of rank concordance along with coefficient of variation of productive efficiency estimates for the sample period. We find that there is wide disparity among STUs according to their labor productivity, gross productivity, and productive efficiency levels and growth. On an average, small size STUs are more productive than their larger counterparts. Also, by and large, Tamil Nadu STUs seem to be more productive than their counterparts operating in other states of the country. The distribution of ranks of STUs with respect to their productive efficiency levels has remained broadly unchanged over the years. newline newlineSecond, it aims to analyze the link between productivity, prices, and profitability with the help of a case study of Andhra Pradesh State Road Transport Corporation (APSRTC). We find that, by and large, productivity gains achieved by APSRTC are being passed through to customers. However, the data reveal a significant change in the pattern during the 1990s, particularly from 1995-96 onwards. During this period, on an average the productivity of APSRTC declined, whereas its input factor prices compared with output prices increased significantly. This has resulted in a deterioration of its financial condition. Third, it aims to...