Performance of Public Enterprises in Karnataka : A Panel Data Analysis

In the wake of the public sector reform programme, performance of public sector units in terms of profitability has become a highly debated issue in India, where major arguments given for inefficiency of public enterprises are over employment and lack of managerial autonomy. However, there is not much academic work which formally establishes these assertions. This paper considers panel data relating to 59 state level public sector firms in Karnataka and uses a random effect model to examine the possible factors contributing either positively or negatively to the performance of public enterprises.