industries”. However, even this policy was soon abandoned as many British enterprises were opposed to this . Impact of Depression on Indian Agriculture The ‘Great Depression’ ( ) also dealt a death blow to Indian agriculture and the indigenous manufacturing sector. The value of farm produce, declined by half while the land rent to be paid by the peasant remained unchanged.
In terms of prices of agricultural commodities, the obligation of the farmers to the state doubled. The great fall in prices prompted Indian nationalists to demand protection for the internal economy. The 1930s saw the emergence of the Indian National Congress as a militant mass movement. Government of India Act, The British had to appease the Indian nationalists and the outcome was the passage of the Government of India Act, .
This provided for greater power to the local governments and the introduction of direct elections. In the , elections the Congress won a resounding victory in most of the provinces. However the decision of Britain to involve India in the Second World War, without consulting the popular Congress ministries, forced the latter to resign from office.