Write a note to explain the effects of the following:
The great depression on the Indian economy.
In the nineteenth century, colonial India had become an exporter of agricultural goods and importer of manufactures. The impact of the Great Depression in India was felt especially in the agricultural sector. It was evident that Indian economy was closely becoming integrated to global economy. India was a British colony and exported agricultural goods and imported manufactured goods. The fall in agricultural price led to reduction of farmers’ income and agricultural export. It led to a great rural unrest in India. The great depressions immediately affected Indian trade in such as:
● India’s exports and imports nearly halved between 1928 and 1934.
● As international prices crashed, prices in India also plunged. Between 1928 and 1934, wheat prices in India fell by 50 per cent.
● Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands.
● Peasants producing for the world market were the worst hit. Across India, peasants indebtedness increased. However the depression proved less grim for urban India.