Avinashilingam Institute for Home Science and Higher Education for Women, Coimbatore-641043.
Online published on 27 December, 2011.
Like many economic activities that are intensive in infrastructures, the transport sector is an important component of the economy impacting on development and the welfare of populations. When transport systems are efficient, they provide economic and social opportunities and benefits that result in positive multipliers effects such as better accessibility to markets, employment and additional investments. When transport systems are deficient in terms of capacity or reliability, they can have an economic cost such as reduced or missed opportunities. Transportation in India has recorded a substantial growth over the years both in spread of network and in output of the system. In view of the above discussions i.e the significant role of transport sector in various fields of development, this paper concentrates on the efficiency of transport equipment industry which is the basis for the growth of transport sector in India. The reference period of the study is between 1998–99 and 2007–08. A stochastic frontier production function as proposed by Battese and coelli (1992) is applied to analyze the data. It was found that the performance of the transport equipment industry has reached maximum efficiency level through out the reference period. Stable macro-economic framework, sound regulatory structure, investor friendly policies, and sustainable project revenues, transparency and consistency of policies, effective regulation and liberalization of labour laws and good corporate governance are the basic requirements, which define the success of the transport sector in future also.
