Technical Efficiency and Productivity Growth of DISCOMs in Northern India: Evaluating Reforms’ Outcomes Using DEA-Malmquist Models

Abstract

The performance of power distribution utilities in India is crucial for ensuring affordable and reliable electricity access for all segments of society. This study assesses the technical efficiency and growth in the productivity of power distribution companies (DISCOMs) in Northern India from 2012-13 to 2022-23 using the DEA-based Malmquist Productivity Index (MPI). The analysis, conducted in R-Studio with the ‘Productivity’ package, employs an input-oriented CCR-based DEA-MPI framework. The findings indicate that DISCOMs with MPI greater than one have experienced positive growth. KESCO is leading. In contrast, UTPCL had the lowest productivity. Efficiency Change (EC) remains stable across most DISCOMs, while Technological Change (TC) is the prime mover of growth in productivity. KESCO and MVVN exhibited the highest technological improvements, whereas UTPCL and DVVN exhibited technological stagnation. Analysis highlights that DHBVN, UTPCL, and DVVN depend on input-driven advancements for Magnitude-Augmented Technological Change (matech) and Input-Biased Technological Change (ibtech). KESCO, MVVN, PSPCL, and AVVNL have maintained a balanced technological change. This study identifies the need for investment in technology strategically to fill efficiency gaps. Key policy insights for India’s power distribution sector are required to enhance DISCOMs' operational performance.