Financial management and service delivery: a nonparametric analysis for Indian cities

Abstract

The main objective of the paper is to assess the performance of urban local governments in India taking the physical levels of services provided by them as the 'outputs' and the expenditures on resources to provide these services as 'inputs' in an integrated framework and pinpoint some possible sources of mis-utilization of resources. We use nonparametric two-stage data envelopment analysis technique to derive the efficiency scores, with a subsequent analysis of slacks associated with the optimization exercise which quantifies the extent of mis-utilization of resources. The main findings suggest that the city governments can provide the same levels of services by using resources lesser by 27 % of what they currently use. We also find that the extent of unproductive spending and under-provision of services are more pronounced in smaller cities. Mis-utilization of resources in factors like establishment and laborcost is more pronounced as the establishment expenditures and contractual payments in the laborcost component involve more leakages.JEL Classification C6 · H4 · H7 · R1 · R5 · R15

Factors affecting operation and maintenance cost recovery of urban water supply: An evidence from an eastern Indian states

“…In most developing countries, under‐recovery of O&M cost is a major problem with urban water service (Bandyopadhyay, 2015; Misra & Goldar, 2008; Pushpangadan, 2003; Tiwari & Gulati, 2011). Low tariffs, low coverage of registered connections, high levels of leakage, high rate of NRW, poor metering practices, inefficient billing and collection are major problems associated with under‐recovery of O&M cost of urban water service (Gupta, 2011; Nag & Garg, 2013; Sridhar, 2007).…”

“…Indian cities can save 13% of the establishment costs and 7% of the labor‐cost and provide the same level of services. The mis‐utilization of resources occurs in contractual payment for the labor cost and establishment (Bandyopadhyay, 2015). Improving energy efficiency, least cost design infrastructure, and reduction in operating and capital expenditure can recover 100% operating expenditure and 80% capital expenditure (Misra & Goldar, 2008).…”