Question

Recently it was reported that the Indian textile sector was not doing well. If the ideas contained in the passage are agreed to, then which of the following could be a possible reason?

1. All Indian firms are as old as international firms.
2. Indian textile firms are dispersed all over the country, with most of them also having an international presence.
3. Textile firms in India were subjected to trade union activity in the period from the 1960s to the 1980s.

• A. 1
• B. 2
• C. 3
• D. 1 and 2

Hint:

Ask which fact would actually drag performance down over decades, not which fact is merely neutral or would normally help a firm.

Answer 1

The Correct Option is C

Step 1: Understanding the Question:
We are told the Indian textile sector has been doing badly, and asked to pick which of three given facts could plausibly explain that poor performance.

Step 2: Key Approach:
A possible reason for poor performance must be something that plausibly drags performance down, not a neutral fact and not something that would normally help a firm rather than hurt it.

Step 3: Detailed Explanation:
Statement 1 says Indian firms are as old as international firms. Age parity alone does not explain underperformance, older or younger firms can do well or badly for many other reasons, so this fact is simply irrelevant to the question being asked.
Statement 2 says Indian textile firms are spread across the country and many even have an international presence. Being widespread and having a global footprint are generally signs of reach and market access, if anything these traits would support better performance, not explain a decline.
Statement 3 says textile firms in India faced heavy trade union activity between the 1960s and the 1980s. Prolonged labour unrest, strikes and stoppages disrupt production schedules, discourage new investment in modernising machinery, and push costs up relative to competitors abroad. This is a well documented, direct drag on an industry's long run competitiveness, so it is a genuinely plausible reason for the textile sector's weak performance.

Step 4: Final Answer:
Only the trade union activity in statement 3 gives a real explanation for underperformance. \[ \boxed{3} \]