Question

How was the Indian economy affected by the great depression of 1929?

Answer 1

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[citation needed] 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.[citation needed] 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.
The international financial crisis combined with detrimental policies adopted by the Government of India resulted in soaring prices of commodities. High prices along with the stringent taxes prevalent in British India had a dreadful impact on most Indians. The discontent of farmers manifested itself in rebellions and riots. The Salt Satyagraha of 1930 was one of the measures undertaken as a response to heavy taxation during the Great Depression.