Question -
Answer -
Industrial sector performance was poor due to the following reasons:
1. A reduced industrial output was observed due to cheaper imports. Imports were cheaper as import tariffs were removed. This led to reduced demand for domestic goods.
2. There was a lack of investment in infrastructure facilities due to which domestic firms were unable to compete with the developed counterparts from foreign countries in terms of cost and quality. Inadequate infrastructure raised the cost of production and made the goods non-feasible in the market due to the high price.
3. Non-tariff barrier maintained by many developed countries made Indian products less accessible in those countries which led to an overall decline in revenue.
4. Domestic industries did not develop in terms of technology and hence were unable to compete with industries of developed nations. Traditional technologies were not at all cost-effective or had a good quality which was the reason for poor growth.