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Is Efficiency of Indian Cement Firms Linked with PAT? A DEA-Tobit Analysis of Select Firms

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  • Hena Oak

Abstract

Promoting energy efficiency through policy mechanism will help to reduce India’s dependence on fossil fuels and lead to energy saving. This cannot happen without industry participation. The Perform-Achieve-Trade (PAT) scheme started in 2012 is such a policy measure, that is specifically designed for the high energy consuming industries of India. Select plants from these industries are selected for every PAT Cycle for implementation of the scheme. Currently PAT is in its sixth phase. One of the industries under its purview is the cement industry. But the cement firms that were included under PAT-I and II were dropped from PAT-III and IV. Using a sample of 27 such firms for the period 2007-2021, the paper estimates efficiency scores using input-oriented BCC model to analyze if the scores were improving for the firms after they were excluded from the PAT Cycles. Results show that on an average, efficiency scores were higher when the firms were a part of PAT-I and II, and it declined thereafter. The top 10 cement producers recorded higher efficiency scores than the other firms. Tobit regression results show that royalty and degree of capitalization help to increase efficiency scores, while with age the scores decline for all firms.

Suggested Citation

  • Hena Oak, 2023. "Is Efficiency of Indian Cement Firms Linked with PAT? A DEA-Tobit Analysis of Select Firms," European Journal of Development Studies, European Open Science, vol. 3(2), pages 1-9, March.
    • Handle: RePEc:epw:develo:v:3:y:2023:i:2:id:15241
    DOI: 10.24018/ejdevelop.2023.3.2.241
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