Estimating the public efficiency of India: a state wise analysis

Abstract

This aim of this study is to analyse the public sector performance and efficiency of the Indian states. We have performed this analysis using several performance indicators for the time period of three years, i.e., 2010 to 2013 and are computed for the government as a whole and for the primary functions that it performs. The four 'opportunity' indicators taken for this study consist of education, public infrastructure, administrative, education, and health. Furthermore, public infrastructure is further divided into the transport, water and energy sectors respectively. The 'Musgravian' indicators consist of gross state domestic product (GSDP) of the states, the public-expenditure ratio (P-E ratio) and employment which reflect the fundamental tasks of the government - allocation, distribution, and stabilisation. Public efficiency is calculated as the public sector performance divided by the public expenditure. We conclude that states having small public sector perform well in terms of economic and social performance.