The Great Depression began in 1929 with a steep fall in New York Stock Exchange and continued well into the mid-1930s.
During depression agricultural prices fell, industrial production came to a halt, and millions of people became jobless and homeless.
The depression was caused due to an overflow of food grains in the market which led to a fall in the agricultural prices. Canada, Australia and America had emerged as new alternate centres of wheat production during war.
During and after the war the US had emerged as an international money lender. The US withdrew loans from other countries because of which major banks and currencies collapsed in Europe. To overcome the depression, the US imposed import duties which again hindered the world trade. During the depression, India’s exports and imports shrunk to almost half. The agricultural prices fell and affected the peasants and farmers badly.
The poor peasants mortgaged their land, jewellery and other precious things to pay off debts and meet their daily needs.
The depression did not affect the middle class urban Indians so much. Due to the fall in prices all commodities began to cost less. Since the British Government provided tariff protection to industries there was also an increase in industry investment.