Question

What was the impact of economic depression on India after the First World War?

Hint:

The economic depression after the First World War highlighted the vulnerability of colonial economies and how global economic shifts could heavily impact local conditions.

Answer 1

The economic depression after the First World War had a significant impact on India. This period, especially around the 1920s, witnessed a variety of economic consequences that affected different sections of society. The impact can be broadly classified into the following areas:
1. Agricultural Crisis:
India's agricultural sector faced severe challenges. Prices of agricultural products fell, leading to economic instability in rural areas. Farmers, who were already burdened with high taxes and the colonial economic system, suffered greatly as they struggled to sell their produce at low prices. Many farmers fell into debt and were forced to mortgage their lands.
2. Industrial Decline:
The depression led to a slowdown in industrial activity in India. Industries such as textiles, which had seen some growth during the First World War, were now facing a reduction in demand. This, coupled with a decline in raw material supply and rising unemployment, further exacerbated the economic distress.
3. Unemployment and Poverty:
The depression led to widespread unemployment, particularly in urban areas. Many people, especially workers in industries, faced job losses as businesses and factories cut down production. The result was an increase in poverty levels, which affected the quality of life of many families.
4. Impact on Trade:
International trade was also affected, as demand for Indian goods in foreign markets plummeted. India's export earnings decreased, leading to a further decline in the national economy. The collapse of the global trade system led to economic isolation.
5. Worsening of Rural Debt:
The agricultural depression led to increased rural debt. With falling crop prices, many farmers were unable to repay loans, leading to land alienation and economic ruin for a large section of the rural population.
Conclusion:
In conclusion, the economic depression after the First World War worsened the economic condition in India, particularly affecting farmers, industrial workers, and the urban poor. The lasting effects of this depression set the stage for major political and social movements in India during the 1920s and 1930s.