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Unformatted text preview: SPECIAL ARTICLE Economic & Political Weekly EPW June 26, 2010 vol xlv nos 26 & 27 325 Measuring Productivity and Efficiency of Major Ports of India J G R Monteiro Thanks to S Sriraman for his support and guidance in this study. J G R Monteiro ( firstname.lastname@example.org) is at the department of economics, University of Mumbai. Ports have played an important role in the economic development of India and its vast hinterland, and are an important infrastructural resource for the country’s trade. While the financial performance of the ports is improving marginally in value terms, problems of productivity and efficiency affect their operations. In this paper, we measure productivity and efficiency of the 12 major ports of India by making use of Data Envelopment Analysis. The Malmquist Productivity Indices, computed for the sample period 2001-08, differ substantially from port to port. While there has been a significant improvement in the performance of major ports since 1991, much more needs to be done in terms of bringing in modern technology in traffic handling. I n recent years there has been a growing interest in India and elsewhere in the world with regard to development of ports and subsequently their growth. The origin and growth of a modern port system as a whole is dependent upon a number of factors such as volume, composition, size and expansion of trade of a country. The cargo handled at Indian ports has increased from a level of 19.38 million tonnes (major ports) in 1950-51 to around 738.13 million tonnes (major and non-major ports) in 2008-09. It is o bserved that about 95% by volume and 70% by value of the country’s foreign trade is carried on through maritime transport, and therefore, ports and their development assume an important place in policymaking. Ports are one of the key infrastructures of the maritime trans- port of a country (Ghosh and De 2001). Ports are engines of growth and development for the economies they serve. They are thus economic drivers of the entire economies (Monteiro 2007). Ports form a vital link in the overall trading chain and con- sequently, their level of performance and efficiency determines to a large extent a nation’s international competitiveness (Tongzon and Ganesalingam 1994). At the outset a port must be distinguished from a harbour. Most ports have poor harbours, and many harbours receive too few ships. Harbour is a physical concept, a safe shelter for ships to moor; port is an economic concept, a centre of land-sea exchange which requires good access to a hinterland even more than a sea- linked foreland. The hinterland of a port should be well-developed because the industries, refineries and other productive centres located here are important for export potential. Moreover, since these productive (business) centres also demand imports, this landward access is critical for the survival and sustenance of a port. In this paper it is the economic concept of a port which is stressed upon and our aim is to examine its productivity and...
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