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Abstract:
This paper measures the relative efficiency of 72 electricity distribution divisions (DDs) in Odisha by using a non-parametric approach to frontier analysis. Input oriented data envelopment analysis (DEA) is applied to evaluate the efficiency of these DDs during 2018-19. The results show that there is existence of overall inefficiency in the majority of electricity divisions. The inefficiencies are mainly due to their technical inefficiency rather than scale inefficiency. The paper has identified ‘most inefficient’ DDs, which require special attention by the regulators and management in order to increase efficiency by benchmarking them against the most efficient electricity divisions in the state. The paper has also worked out the returns to scale and estimated most productive scale size of the inefficient distribution divisions. This would help the management to take steps for enhancing efficiency of the inefficient distribution divisions and optimise the electricity use in the state.

Key words: Efficiency, electricity distribution division, benchmarking, data envelopment analysis, most productive scale size, Odisha

JEL Code: C61, L94