Some economists argue that : "Post-1991 economic reforms, globalisation played a major role in poor performance of the industrial sector." Present your arguments to justify the given statement.

Question

Accepted Answer

Arguments to justify that globalisation played a major role in poor performance of industrial sector:

1. **Cheaper Imported Goods:** Globalisation led to greater flow of goods from developed countries. Cheaper imports replaced demand for domestic goods. For example, cheaper Chinese goods pose threat to Indian manufacturers.

2. **Non-Tariff Barriers:** Developed countries like USA maintained quota restrictions on imports of textiles from India, while India removed its restrictions.

3. **Lack of Infrastructure:** Infrastructure facilities, including power supply, remained inadequate due to lack of investment.

4. **Competition from MNCs:** Domestic industries faced stiff competition from multinational corporations with better technology and resources.

5. **Technology Gap:** Many domestic industries couldn't match the technological advancement of foreign competitors.