Performance analysis of Indian states based on social–economic infrastructural investments using data envelopment analysis

Abstract

PurposeThis study investigates the performance of Indian states based on infrastructural investment in social and economic sectors using data envelopment analysis (DEA). Most of the studies in the literature are based on how different elements of infrastructure such as transport, energy, education, healthcare system affect the economy of different countries/regions. In this study, we consider these elements under two different sub-systems, namely, social and economic infrastructure and measure the cooperative efficiency for competitive growth.Design/methodology/approachA four-stage DEA approach is proposed for the analysis of a sample of 28 Indian states for the years 2011, 2013 and 2015 under consideration. First stage calculates the per capita GDP contribution, while stage-2 evaluates the efficiency of investments in social infrastructure followed by the efficiency analysis in economic infrastructure in stage-3. Finally, fourth stage evaluates the co-operative efficiency for the overall performance.FindingsThe findings of three different cases based on population sizes, viz., highly populated, moderately populated and less populated regions suggest that the government can identify the top and poor performers. It also studies the variations in efficiency tally of states using Malmquist indices.Practical implicationsThis kind of study will vigilant government and local authorities on the investments made in all the states for social and economic infrastructure and establish a competitive environment among state governments to compete for improved infrastructural growth.Originality/valueThis study is the first of its kind in developing countries like India, which focuses on efficiency analysis using DEA based on two sub-sectors of social–economic infrastructural investments.