Mains-GS3-Economic Development, Mains-GS1- History of the World
1. The current COVID 19 outbreak is being compared with the Great Depression (1930) phenomenon.
2. This event is the devastating economic decline of the 1930s that shaped the world.
About the Great Depression
1. Depression is a sustained, long-term downturn in economic activity in one or more economies.
2. It is a more severe economic downturn than a recession, which is a slowdown in economic activity throughout a normal business cycle.
3. The Great Depression was a major economic crisis that began in the United States in 1929 and went to have a worldwide impact until 1939.
4. It began on a day that is referred to as ‘Black Thursday’ as the New York Stock Exchange crashed.
5. The extent of the decline was due to deep-rooted factors such as
a) Fall in aggregate demand
b) Misplaced monetary policies
c) Unintended rise in inventory levels
6. Industrial production fell by 47% of the wholesale price index by 33% and real GDP by 30%.
7. It spread to other countries mainly due to the gold standard, which linked most of the world’s currencies by fixed exchange rates.
8. It caused extreme human suffering, huge unemployment, and many political upheavals that took place around the world.
9. It is believed to be the principal reason behind the rise of fascism and consequently the Second World War.
Impact on India
1. It had an important impact on India’s freedom struggle.
2. It made substantial sections of the peasantry rise in protest as there was a drastic fall in agricultural prices resulting in less income to the peasants.
3. A severe credit contraction occurred as colonial policymakers refused to devalue the rupee.
4. This unrest was articulated by members of the National Congress by launching the Civil Disobedience movement (1930).
5. There were ‘No Rent’ campaigns in many parts of the country and radical Kisan Sabhas were started in Bihar and eastern UP.
Source- Indian Express