The Inter-War Depression in British India: Aspects of its Economic and Social Impact, 1929-36

Collins, Patricia Sarah (1989) The Inter-War Depression in British India: Aspects of its Economic and Social Impact, 1929-36. PhD thesis, University of Glasgow.

Full text available as:
[thumbnail of 11008053.pdf] PDF
Download (14MB)


During the last decade there have been several new works on the impact of the 1929 depression on the Indian economy, but most have concentrated on single provinces or single sectors of the economy. This study aims to synthesise the trends discussed elsewhere at provincial level in an analysis of the slump at an All-India level, though the great diversity of agrarian conditions has necessitated a focus on one, hitherto neglected, province. It studies the tensions created by the sudden impact of a short-term downturn and the longterm structural change in the Indian economy between the wars. Several major conclusions emerge from this study. Firstly, that India withdrew from the international economy, partly through higher tariffs protecting the domestic market and partly the increasing uncompetitiveness of Indian exports, particularly after the devaluation of the yen in December 1931. This trend was to continue through the 1930s. For the first time, this study has disaggregated Burma from the Indian trade statistics, which has shown that British trade to India, prior to the slump was of greater magnitude than suggested by traditional studies. This explains the aggressive reaction of British exporters in the early 1930s to the threat posed by the loss of trade to India. Removal of Burma from the trade statistics also demonstrates more clearly the tendency of India towards disengagement from world trade, especially its traditional intra-Asian trade. This had major implications not only for the Indian economy but for India's partners within the Asian bloc, mostly Java. Secondly, a study of the process of commercialisation within the backward province of Bihar and Orissa has provided an addition to earlier work on those provinces more highly integrated into the global economy such as Bengal and the Punjab. This has revealed the importance of the extension of the road network in the establishment of a provincial market and the continuation of the process of commercialisation despite falling rural incomes arid a reduction of cash credit. The study of rural Bihar has shown also that by reducing land values, the depression pushed investment from rural to urban-industrial areas. Prior to the slump land values were increasing because of pressure on land created by a rapidly growing population. The collapse of prices of agricultural produce from 1929 abruptly halted the rise in land values due to an increase in rent defaults. Thus, the traditional investment in land became unprofitable and new investment opportunities had to be found. This new capital provided a basis for the rise during the slump of import-substitution industries managed both by traditional European and new Indian agencies. Much has been written about the rise of indigenous business groups, but the early 1930s also witnessed the advent of multinational companies such as Imperial Chemicals and Dunlop anxious to establish plant within the shelter of the high Indian tariff. The growing strength of the Indian entrepreneurial classes was marked by increasing competition between Indian firms, particularly notable in an east-west split of financial interest groups. The role of the Government of India has been assessed, especially its relationship with the British authorities. The action of the British Government during the Indian financial crisis of 1931 could be regarded as an attempt to re-impose imperial control over India. However, it was for purely financial rather than political reasons. This is seen in the economic results of the British action, gold outflows from India which rendered the United Kingdom debtor and the curtailment of British trade to India, which weakened the economic rationale of a British presence in India and so paved the way for decolonisation. The attempts by the Government of India to deal with the crisis were ad hoc and unsatisfactory. There was no major re-orientation of government policy. A comparision with the Government of Argentina, rather than the usual one with Japan, however, suggests that even if an independent Nationalist Government had been in power during the depression the general underdevelopment of the Indian economy would have constrained the abilities of the authorities to promote a more rapid recovery.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Keywords: Economic history, South Asian studies
Date of Award: 1989
Depositing User: Enlighten Team
Unique ID: glathesis:1989-78321
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 30 Jan 2020 15:33
Last Modified: 30 Jan 2020 15:33

Actions (login required)

View Item View Item


Downloads per month over past year