Abstract
This paper presents a technique for calculating comparative cost efficiencies of Indian State Owned Electric Utilities (SOEUs), which have been primarily accountable for the distribution of electricity in India. Performance of twenty-eight state utilities was evaluated using the nonparametric approach of Data Envelopment Analysis (DEA). In this paper, input-oriented DEA is applied to calculate the overall technical and scale efficiencies of SOEUs. The result of this study indicates that many of the SOEUs (especially larger ones) are inefficient and perform below the optimal levels. To improve the performance of such SOEUs, policies like restructuring, unbundling, or encouraging competition can be considered.
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