Explain the impact of the great depression on Indian economy. 5 Marks
Answers
The Great Depression of 1929 had a very severe impact on India, which was then under the rule of the British Raj. How much India was affected has been hotly debated. Nationalist historians have argued that the Great Depression slowed long-term industrial development.[1] Outside scholars argue that depression had only a small impact in India's modern secondary sector: in terms of output, there was no depression in India between 1929 and 1934. However there were negative impacts on the jute industry, as world demand fell and prices plunged. Local markets in agriculture and small-scale industry showed modest gains.[2] The Government of British India adopted a protective trade policy which, though beneficial to the United Kingdom, caused great damage to the Indian economy. During the period 1929–1937, exports and imports fell drastically crippling seaborne international trade. The railways and the agricultural sector were the most affected.