Measuring technical efficiency of passenger bus companies in India: a non-radial data envelopment analysis approach

State transport undertakings (STUs) are bus companies in India are instrumental for transporting large numbers of people. They operate under stringent government regulations. Despite operating under relatively similar external environments, they have shown marked differences in their physical and financial performance. Hence it is imperative to have a holistic perspective of their productivity and efficiency. This is accomplished by the use of the non-parametric efficiency measuring technique known as data envelopment analysis (DEA). In order to minimize the effect of slacks on the efficiency measure, a non-radial input oriented variant of DEA is used. Efficiency scores have been computed for each of the twelve years, 2002–2013. It is observed that technical efficiency has fallen for STUs, on an average, during the study period. A key issue of concern is the fall in labour efficiency during the study period. Also “larger” STUs, in terms of fleet strength, are doing better than smaller STUs. © 2017, Operational Research Society of India.