The Depression decade
The huge impact of the Depression showed how closely the Indian economy was tied to the capitalist world economy, and how vulnerable Indian society was to its dramatic downturns. Indian economy and society experienced the Great Depression in two major ways – a collapse of prices and a rupture in the circuits of monetary credit. Since food prices fell almost as much as cash crop prices, the rural poor were able to struggle through the Depression decade, albeit at a much reduced standard of living and in greatly straitened circumstances. The slump brought economic hardship to peasants and rural labourers but also damaged the principal mode of social dominance available to sections of the rural elite. Indian intermediary capitalists, who had played a key role in the finely tuned economic system of inter-regional specialization across the Indian Ocean since the mid-nineteenth century, now faced a political backlash from their clients and debtors.