The research looks into the impact of efficiency on discretionary loan loss provisioning in Indian banks and whether government ownership of commercial banks impacts efficiency. Using data envelopment analysis to quantify efficiency, we investigate the effect of efficiency on discretionary loan loss provision using a two-stage least squares regression model while accounting for uncertain government policies and their unpredictable economic consequences (economic policy uncertainty). Banks that are not majority owned by the government are more efficient than banks that are majority owned by the government. Through discretionary loan loss provision, bank efficiency positively impacts earnings management. Bank earnings management practices are limited by economic growth, rising credit-to-deposit ratios, and domestic economic policy uncertainties. However, capital adequacy ratio and global economic policy uncertainties are positively related to earnings management in banks. The study provides insights into the link between efficiency and earnings management in the face of local and global uncertainties.