Saving Indian Villages: British Empire,the Great Depression and Gandhi’s Civil Disobedience Movement

Abstract

This article traces an intricate relationship between Mahatma Gandhi’s call for Civil Disobedience (1930–1933) and the global economic slump of the 1920s experienced by Britain and colonial India. I argue that the economic hardships faced by Indians (particularly the peasant classes) forced Gandhi to revisit his sociopolitical approach to India’s nationalist movement. Despite the chronological overlap of the Great Depression (1929–1931) with Gandhi’s Civil Disobedience Movement (1930–1933), the relation between these two major events has not been adequately explored in recent scholarship. I propose to contextualize the changes in Gandhi’s economic ideas and political strategy (often against contending ideological trends) leading to his defence of Indian peasant interests during the Gandhi–Irwin Pact and the Second Round Table Conference. Gandhi’s increasing awareness of the economic crises and Britain’s severe opposition to granting financial autonomy to India pushed Gandhi in the direction of charting a new path for economic self-reliance. This, I suggest, resulted in his nation-wide popular movement for reviving the Indian village economy in the form of the ‘Constructive Programme’ (1934–1948) in subsequent years.

Introduction

The global financial recession of 1929, emerging in the United States and later known as the Great Depression (1929–1931), had devastating effects on the capitalist core and the colonized peripheral countries. India, a British colony since the late eighteenth century, faced an acute agrarian crisis during the recession years ² and in the decade immediately following the Great Depression. Much of the scholarship analysing the impact of Great Depression on India (Balachandran, 2003; Rothermund, 1992; Tomlinson, 1979) has rightly concentrated on the unequal exchange of industrial and agricultural products and the uneven trade-tariffs levied by the British government from its Indian industrial and agricultural manufacturers. The Depression years proved crucial in India’s nationalist movement as well. M. K. Gandhi, arguably the most prominent Congress leader at the time, declared India’s intention to separate from Britain on 31 December 1929 during the Lahore session of Congress and demanded sovereign status for India. ³ Gandhi launched the Civil Disobedience Movement in 1930 by breaking the British colonial Salt-tax monopoly. He extended the no-rent campaign, initiated earlier in Bardoli (1925–1929), to the whole of India. However, despite a huge corpus of scholarly literature on the Civil Disobedience Movement, its causal association with the Great Depression as well as Gandhi’s subsequent decision to restart the second phase of his Constructive Programme (1934) has been under-examined.

Standard scholarly texts on Gandhi dealing with this period show no interest in tracing the intricate relationship between the financial recession at the heart of the British Empire and Gandhi’s radical move towards mass mobilization of the Indian peasantry on a fundamentally economic issue (Brown, 1977; Guha, 2018). While in recent years the trend seems to be changing (Govindu, 2021), the Great Depression continues to be neglected as one of the prime movers for the Civil Disobedience Movement. Non-association between the Great Depression and Civil Disobedience Movement leaves a jarring gap not only in Gandhian studies but also an important lacuna in writing the history of the Indian nationalist struggle. Gandhi’s return to active politics in 1928–1929 should also be looked at from the viewpoint of the acute economic distress imposed upon Indian agrarian classes. Tracing the relationship between an agrarian crisis arising out of the Great Depression and Gandhi’s subsequent mass agitation (through the Civil Disobedience Movement), I believe, could provide normative and intellectual foundations to Gandhi’s (subsequent relaunch of) Constructive Programme (1934–1940/41).

This article is divided into three parts. It begins with analysing the effects of global financial recession felt in Britain during the post-First World War period leading to the rise of greater fiscal and tariff protection followed by Great Britain. Secondly, it underscores that a British metropolitan approach towards its colonial hinterland remained largely unchanged owing to economic pressures put upon it. In fact, die-hard British imperialist politicians regarded its Asian and African colonies as a suitable source to aid Britain in surviving its financial recession and, quite possibly, coming out unscathed. The third section traces the developments in India, in the context of the ‘slump years’ (1925–1929) and contextualizes Congress’ call for Purna Swaraj (Complete Independence) followed by an excursion into Gandhi’s call for Civil Disobedience, the Gandhi Irwin Pact and his participation in the Second Round Table Conference. ⁴

British Economic Policies and the Great Depression: 1919–1929

As Britain was recuperating from the devastating First World War (1914–1918), the US government decided, in March 1919, to abruptly end its support to the British pound. In order to reverse a further fall in the value of the pound, Britain suspended all exports of gold or bullion through an Ordinance passed by the Lloyd George government on 29 March 1919 (later ratified into a law by the Parliament). Nevertheless, such parliamentary measures could not avoid a fall in sterling’s conversion value which receded from $4.76 to $3.81 in a matter of few months. In order to stabilize its economy, Britain appealed to its domestic investors to invest in government bonds and increase entrepreneurial activities. Decontrolling export of raw materials and restocking of manufacturing and consumer goods resulted, by late 1921, in a sudden boom in the British market (Eichengreen, 1996). By the middle of the 1920s, however, the short-lived boom gave way to a steady decline in British imports from its colonies. Consequently, British industrialists pressurized the Lloyd George government to pass a law (Safeguarding of Industries Act, 1921) which promised trade protectionism and eased the entry of British commercial activities in its colonies. Rising unemployment added extraordinary pressure on subsequent British governments to pass pro-labour domestic policies (only to be partly retracted by the Conservative government formed in the late 1920s). John Maynard Keynes, one of the leading experts on British public finance, advised greater purchasing power to domestic consumers by introducing protective tariffs which would improve the balance of payments of the British current account, increase foreign investment and pump up demand for British goods (Kitson & Solomou, 1990). It is interesting to note that Britain was the only country among the advanced economies to continue with free-trade policy well after the First World War.

That the British colonies would prove crucial in revitalizing the British economy from its War-infected slump was well established in contemporary British political and economic circles. The vast British Empire in Africa and Asia became one of the principle sources of revenue generation (Brown, 1989). Whether it be the cocoa production on the Gold Coast or maize production in Kenya, its demand in the world market saw a sharp rise in the years immediately following 1918. However, colonial governments in these countries as well as their administrative and policy-making superiors in the British Parliament, eager to fill the Imperial Exchequer, turned a blind eye to the potential drop in demand. While industrial commodities, such as copper production in Northern Rhodesia, saw a rapid growth in the London Metal Market, rising from £400,000 in 1924 to £3,582,000 in 1933 (with a steep fall in 1931 owing to high financial volatility), agriculture-goods exporting commodities faced acute distress (Gardner, 2012, p. 71). Apart from prioritizing and restricting exported items from the colonies to the British market (also to fight back steep competition from Japan) by using adequate domestic policy measures, imperial preference was propagated through higher increase in taxation. African peasants and small producers found the latter almost impossible to pay (Gardner, 2012, pp. 92–124). From 1928 onwards, numerous African colonies rose up in arms and spearheaded a no-taxation campaign.

Around the mid-1920s the issue of protective tariffs became crucial for the Conservative government. Tariff reforms were regarded by the Conservative Party as the perfect solution for strengthening the imperial hold over its colonies while giving a war-torn British economy some respite and advertising economic stability to its British electorates. Lord Chamberlain, Chancellor of the Exchequer, had proposed in 1919 that the British government in India introduce preferential import rates similar to earlier policies adopted by members of the British Commonwealth (Canada in 1894, New Zealand in 1903 and Australia in 1907). His suggestion elicited an extraordinary backlash from Indian members of the Imperial Legislative Council (Stubbings, 2019). With the collapse of the Labour minority-government, a Conservative-government under Stanley Baldwin passed the Tariff Reform Bill in 1924. However, his government faced three crises—the general strike of 1926, popular opposition to the Trade Disputes and Trade Unions Act (1927) in Britain and popular unrest in India against the Simon Commission (1927). In order to support a rapidly weakening and crumbling party structure (partly due to inner party conflicts with Winston Churchill) and in no mood to face popular uprising in India, Baldwin supported Lord Irwin’s proposal in 1929 to grant Dominion Status to India (Powell, 2004, pp. 155–156). One section of the Conservative Party, backing Churchill, vehemently rejected the proposal, making ‘[…] the battle over India’ the chief source of political upheaval in Britain (Herman, 2008, p. 323). Churchill’s long-standing imperial ambitions were coupled with his acute anxiety over the huge financial losses which Britain would have to bear if India were to secede.

The 1920s Slump, the Great Depression and India

Churchill’s fears were well founded. Britain’s exports to India during the 1920s were steadily declining from £90.6 million in 1924 to £52.9 million in 1930, representing a fall by 41%. Britain ceased to apply the gold standard and compelled deflationary exchange rates on India. Like Britain, India needed to adopt devaluation of its currency due to depression in tradeable variables. However, the British government refused to enact devaluation of the rupee fearing that the British-Indian government would be unable to pay its foreign remittances. Consequently, by late 1929, Indian agriculture saw a steep fall in prices, from 203 in 1929 (setting 1873 = 100 as the base year) to 171 in 1930, followed by a further fall to 127 in 1931, 126 in 1932 and 119 in 1934. Similarly, prices for raw cotton plunged from 133 in 1929 to 70 in 1931 (Sarkar, 1983, p. 257). India was also forced to buy British goods (comprising 11% of the total British exports) and the resulting export-surplus was used by Britain to balance off its foreign payments. Textile mills (primarily located at Bombay and Ahmedabad) possessed huge processing power. And yet, India was forced to buy its cloth from Lancashire and other textile-producing cities, which made up around 30% of the total British manufacturing output in 1929–1930 (Markovits, 1985, p. 13).

The impact of the global recession on the Indian industrial classes and Indian agriculture greatly differed. The Indian textile sector panicked with the outbreak of the First World War only to experience a sizeable boom between 1916 and 1921. Military demand and speculative hoarding by mill owners and piece-good dealers resulted in an increase in prices. Despite some restrictions on the domestic consumption of industrial cloth, owing to Gandhi’s Non-Cooperation Movement (1920–1922) and his call for the widespread use of khadi cloth, the textile industry largely survived the 1920s slump bearing comparatively small losses. This was so largely owing to an increase in international demand for raw materials in the immediate post-War period which meant that foreign countries were ready to buy Indian products at higher prices (Mukherjee, 2002, pp. 23–24). However, the boom period, which ended in 1922, created multi-pronged crises for Indian textile manufacturers. Since Indian mills had over-worked during the War-period their machinery had rapidly depreciated, forcing the owners to replace them with improved machinery imported from Britain. Britain’s protective tariff and higher exchange rate meant that buying machinery in the post-boom period proved particularly expensive. The other issue plaguing Indian textile-mills was of over-capitalization. As global demand fell by the middle of the 1920s, these mills tried to amalgamate their surplus capital into shy domestic consumption. Thirdly, powerful trade unions were forcing mill-owners to replace capital-intensive with labour-intensive production in order to generate employment for recent immigrants to the cities. Finally, the textile owners were exporting yarn to China with an annual worth of £237.7 million (1900 and 1910). During the War, due to domestic buoyancy, they lost the lucrative Chinese market to Japan (Chandarvarkar, 1994, pp. 251–260). Nevertheless, Indian industries were in a much better shape during the 1920s slump years and managed to recover quickly even during the Great Depression.

Indian agriculture, on the other hand, was deeply affected by the slump of the 1920s. The Colonial government’s disastrous agrarian policies from the late nineteenth century onwards severely restricted the purchasing power of Indian peasants (which made up the bulk of India’s working population) (Charlesworth, 1985; Khan, 1931). Heavy pressure on agricultural production during the post-War period adversely affected crop production and distribution. The Great Depression severely altered import absorption and distribution of Indian agricultural produce in the world market. Indian landless peasants faced repeated shocks during the 1930s which crystallized into severe war-time inflation induced by the Second World War (1939–1945). De-urbanization and de-industrialization, ushered in during the inter-War period, pushed the urban proletariat back into agricultural activities. To cite some data taken from the state of Bihar (in the erstwhile United Provinces), between 1931 and 1951 only 50% of the total population could be absorbed into non-agricultural activities. As such the percentage of population dependent on agriculture grew from 78.8% (1931) to 87.3% (1951) (Das, 1982, p. 42). Automatically agricultural labour became cheap and the power of zamindars increased manifold.

Peasants had bought new lands in the early 1920s when business seemed profitable. But since revenue rates extracted by the colonial officials remained high it became difficult for peasants to pay their rents, radically affecting the income of absentee landlords. Rich and middle peasants also felt the impact owing to their proximity to the market and greater vulnerability to farm-price fluctuations. They were most vulnerable to losing their lands to creditors (Sharma, 1988). During periods of high demand in the early 1920s, peasants had taken up high debt obligations and moneylenders had not bothered to recover interest, in view of the stable and high creditworthiness of these peasants. When the financial crisis hit India, indebted peasants had to liquidate their produce and let go of their land at a lower cost to fulfil payment obligations. Agriculture prices fell (by about 50%) without a corresponding reduction in debt, making the situation very precarious. The sudden drop in prices also upset rural–rural and rural–urban credit relations. Wholesale markets were destroyed. Demand and an organized market for agricultural products completely collapsed. Only piecemeal transactions with small buyers continued. Land creditors, who were satisfied with mortgage payments, began to panic and force tenants to vacate in order to sell their lands and recover lost revenue (Rothermund, 1992, p. 92). Such distress sales somehow helped keep the land market afloat. Another factor that crippled peasants was higher land revenue—zamindars began to extract loan repayments precisely when agrarian prices were low. Eager to avoid peasant uprisings, North Indian farmers were protected by the colonial government through remissions and favourable agrarian policies (Rothermund, 1992, p. 96). Such was not the case with the Southern states.

The Indian working classes reacted to this acute financial crisis through organized mass movements. On the eve of the Great Depression the urban working classes revolted against Indian capitalists whereas the poor peasantry rose up against local zamindars. Both classes looked up to Gandhi and the Congress to intervene on their behalf. Unrest in the Bombay textile mills was preceded by large-scale strikes undertaken by the workers of Tata Iron and Steel Company (TISCO) at Jamshedpur in 1924 demanding wage revision. TISCO was vying for trade protection while the labour union was expecting formal recognition. Gandhi intervened in the matter, made statements to the effect that the workers in Tata factories were serving the national interest and appointed his close associate, C. F. Andrews, as the president of the TISCO Labour Union (Gandhi, 1968, p. 48; Simeon, 1993). Jawaharlal Nehru, the emerging Congress leader, sympathized with dissenting mill workers (Nehru, 1973, p. 31). The Communist-led Girni Kamgar Union (GKU) had reservations about Nehru’s comradeship in their struggle. But Nehru expressed his complete solidarity with the Bombay textile mill-workers while hailing GKU ‘[…] the strongest union in the country […]’ (Nehru, 1973, p. 32) and worked towards eliciting international support.

There is a general belief that Nehru had a better understanding of international affairs compared to Gandhi (Gopal, 1976, pp. 138–139). He had attended meetings of the ‘League Against Imperialism’ between 1927 and 1930 and, at the time, was an ardent advocate of the socialist ideology (Louro, 2018). Therefore, his anti-imperialist ideology necessarily made him anti-capitalist and an anti-fascist. Borrowing from dominant conceptual vocabulary of the Third Communist International, Nehru linked the rise of fascism in Germany and Italy to the inherent logic of a particular ‘stage’ in the capitalist growth narrative. Similarly, he regarded the Great Depression an inevitable event in the growth story of ‘greedy’ capitalism. Reflecting on the ongoing economic crisis from prison Nehru wrote to his daughter: ‘The general impression in the capitalist world was that the economic crisis would pass as previous slumps had done, and that the world would gradually settle down to another period of prosperity’ (Nehru, 2003, p. 877). American capitalists, flushed with an ‘[…] abundance of cash […] for which they had no use’ (Nehru, 2003, p. 878) helped the United States become the chief lender to European countries during the post-War period. The stock market crash of October 1929 brought the industrial production in the United States and other economically advanced countries to a stand-still. In July 1931, the American President Herbert Hoover announced relief for one year to all debtor nations, and yet, Nehru complained, British economic exploitation of India continued unabetted.

The impact of the world economic crisis on India’s agricultural classes was explained by Nehru thus:

Ordinarily […] fall in the price of food-stuffs would have been a great boon to the people, for they could get their food cheap. But this is a topsy-turvy world under the capitalist system, and this boon turned out to be a scourge. The peasantry had to pay their rent to their landlord or revenue to the government in cash, and to get this cash they had to sell their produce. Prices were so extraordinarily low that they could not raise enough money sometimes even by selling all the stuff they had produced […] even when food was very cheap, they, who had produced it, starved and were made homeless. (Nehru, 2003, p. 879)

Nehru believed that the measures proposed by Keynes and the International Labour Organization, namely increasing employment and pushing up the purchasing power of the consumers, were the best means to fight global recession. But Britain, unwilling to follow the scheme, indulged in trade and tariff protectionism and put the burden of debt-repayment through heavy-taxation on India. Therefore, Nehru came to see the Soviet Union as the world-saviour and a beacon of hope for all colonised countries: ‘While trade depression and slump and unemployment and repeated crises paralyse capitalism, and the old order gasps for breath, the Soviet Union is a land full of hope and energy and enthusiasm, feverishly building away and establishing the socialist order’ (Nehru, 2003, pp. 939–940).

The Soviet Union was, according to Nehru, a successful model ‘[…] impressing and attracting thinking people all over the world’ (Nehru, 2003, pp. 940–941). Stalin’s Five-Year Plan, launched in 1929, was an embodiment of ‘[…] the spirit of revolution […]’. Nehru was enamoured by the industrial achievements of the Soviet Union during the interwar period. Largely unaware of the great cost of human life and immense suffering caused by Soviet policies during the 1920s, Nehru romanticized the struggles of Soviet citizens who had ‘[…] tightened their belts and starved and deprived themselves of even necessary articles […]’ in order to industrialize their nation (Nehru, 2003, p. 856).

On the other hand, Gandhi’s association with peasant and working-class movements emerged from his long-standing approach to conflict resolution via non-violence (Gandhi, 1997) and resulted in his notion of trusteeship where the capitalist/zamindar and workers/peasants do not necessarily have antagonistic relationship. Never an admirer of Communism (which, according to him, propagated—also by violent means—the complete eradication of private property and forced compulsory labour from all able-bodied individuals) Gandhi believed that for the overall development of any economy (certainly for an underdeveloped economy such as India) active cooperation and consent of both parties was crucial; and that the class which owned the means of production (capitalists/zamindars) would withhold their productive assets without any desire for amassing profit. After retaining the bare minimum required for personal needs the rich were expected to distribute the surplus with the ‘have-nots’—the latter being equal partners and stakeholders in the production activities (Dasgupta, 1996, pp. 118–130). Rather than income-based equality, redistributive justice was the ultimate goal of his notion of trusteeship (‘No and Yes’, Young India, 17 March 1927) (Gandhi, 1969, pp. 163–167). Gandhi, therefore, showed remarkable resistance to no-rent campaigns launched by peasants during the early 1920s since they would not only dispossess the landlords of their income but would also result in inter-class violent conflict. The Congress Working Committee, presided over by Gandhi in 1922, passed resolutions opposing no-rent campaigns by Indian peasants and stated that withholding rents went against past Congress resolutions and that the zamindars had a rightful claim to rent procured from their land (Dutt, 1947, p. 270).

The abrupt end of the Non-cooperation Movement (1922), coupled with acute agrarian distress caused by the financial slump of the 1920s, may have contributed to a change in Gandhi’s stance towards peasant movements. Indian peasant insurrections were an indispensable component of Indian nationalism (Guha, 1999). Gandhi had experienced the power of the Indian peasantry in propagating mass activism during the Satyagrahas which he led at Champaran (1917) and Kheda (1918) (Hardiman, 2018, pp. 127–158). Numerous regional peasant organizations, emerging during the 1920s, invoked religious symbolisms (for instance, the Akali Dal in Punjab) or enticed peasants into armed uprising and adopt violent means (viz. the Communists). Therefore, it was important for Gandhi to bring Indian peasants back into the Congress-fold. Bardoli Satyagraha (1921–1928) became the laboratory for Gandhi to test peasant movement enduring cross-sectional solidarity while impressing upon participants the importance of constructive activities.

Living in close proximity with the Kaliparaj community at Bardoli, Gandhi was exposed to their abject poverty, conditions of near-slavery and social ostracism. Therefore, he pleaded with the dominant Patidars to participate in the Constructive Programme which resulted in the formation of the Patidar Yuvak Mandal at Surat. By 1923, the Mandal and its subsidiary organization—the Swarajya Ashram—embarked upon the Constructive Programme by establishing a centre in the Bardoli district. Enthused by positive response from the elite peasant community towards including lesser privileged agrarian communities in its fold, Gandhi decided to expand his constructive work in other parts of the country. Between 1924 and 1927, Gandhi toured Maharashtra, Karnataka, United Provinces, Bengal, Orissa and Bihar (Kripalani, 1975, pp. 101–107). In 1924, he made the use of khadi compulsory for all Congress leaders and workers. The Patidars, although largely unaffected by the revised revenue rates proposed by the Bombay government, lent their support to the Kaliparaj community (comprising almost 50% of Bardoli population). In solidarity with the Kaliparaj and other affected agrarian communities the Patidars united under the leadership of Vallabhai Patel. Bardoli, thus, became the epicentre of Gandhi’s no-rent campaign on the eve of the Great Depression and attracted nation-wide attention forcing the colonial Bombay government to suspend revenue-revision till the constitutional amendments were accepted by the Imperial Legislative Council.

Previous studies of Gandhi’s ‘constructive work’ suggest that it was implemented so as to leave the traditional caste structure and the dominance of the landed gentry unchanged (Dhanagare, 1983, p. 92; Pandya, 1978). But Gandhi’s ‘Constructive Programme’ was also meant to elicit strong self-reliance from Indian villages against the hegemony of global finance-capitalism and points towards his political astuteness and early awareness of international financial crises. Gandhi’s insistence on the Constructive Programme and Civil Disobedience as political expressions to peasant-immiseration also suggests his complicated relationship with the modern (colonial) state. For Gandhi, while state-laws could safeguard rights, they were incapable of replacing moral laws emerging out of popular sovereignty.

Great Depression and Civil Disobedience Movement: 1929–1931

Indian capitalists were recalcitrant in supporting Congress activities and were visibly upset with labour militancy. Therefore, Nehru used the opportunity to drive his socialist agenda forward. Nehru was eager to project India’s image to the world as the future industrial powerhouse. During his Presidential Address at the Lahore session of Congress (1929), Nehru declared:

Europe has ceased to be the centre of activity and interest […] India today is a part of the world movement. Not only China, Turkey, Persia and Egypt, but also Russia and the countries of the West are taking part in this movement, and India cannot isolate herself from it. (Nehru, 1973, p. 185)

Labour and peasant unrest brewing in India could not be resolved by the ‘[…] new theory of trusteeship […]’ propagated by Gandhi (Nehru, 1973, p. 193). Therefore, Nehru called for a total revamping of relations between the coloniser-colonised, labour-capital and landowners-tenant farmers. The new Congress programme, therefore, demanded not merely the boycott of legislatures, schools and government offices but also ‘[…] political and economic boycott’ (Nehru, 1973, p. 196) of British commodities and a refusal to shoulder Britain’s debt. Simultaneously, Indians were expected to participate in Congress’ constructive activities in large numbers (Nehru, 1973, p. 197).

Gandhi could not have been convinced by Nehru’s call for labour and peasant militancy and by the kind of large-scale industrialization which he was professing. Since his early years of political activism Gandhi had held onto his belief that India—being a land of villages—village and cottage industries, involving manual labour, were the most suitable path for its economic progress (Gandhi, 1997; Jodhka, 2002). In 1924, Gandhi had managed to convince the AICC to establish the All-India Spinners’ Association working within the ambit of Congress (Brown, 1977, pp. 19–20). He was convinced that it was necessary to invest his energies in three key issues at the heart of Swaraj for India, namely, communal harmony, removal of untouchability and spreading rural employment through cotton-spinning (Charkha-Khadi campaign). The last of these was making steady progress (Gandhi, 1970a, pp. 186–187), if not at the rate which Gandhi expected. At the Calcutta session of Congress (1929) Gandhi was successful in including his ‘Constructive Programme’, consisting of khadi, temperance and removal of untouchability in the Congress Subjects’ Committee and, eventually, forcing the annual Congress to pass the resolution with a majority (Brown, 1977, pp. 36–39).

Unlike the Non-cooperation Movement (1920–1922), by the late 1920s Gandhi was open to negotiating with the colonial State, more receptive to economic boycott of British goods and eager to engage with developments in global finance. Nevertheless, present and future generations of India had to be taught to nurture greater sympathy towards Indian villages. He wrote in Navajivan (17 October 1929):

Our economics syllabus is not concerned with world economics, but with Indian economics. We know from experience that the economics of each country varies in some ways from the economics of other countries. Looked at from the point of view of the towns and the villages, the difference may be more pronounced. (Gandhi, 1970b, p. 7)

Gandhi proposed a village-centric empiricism-based syllabus spread over three terms (Syllabus in Indian Economics, Navajivan, 17 October 1929) (Gandhi, 1970b, pp. 7–8). During the first term, the students were expected to locate a village, visit it and gather data about its demography, current life-stock, total percentage of employed villagers, income generated (cumulatively and per capita), total arable land, the variety of crops grown over it and its per capita production/consumption and expenditure. In the second term, the data-corpus collected from various groups (visiting different villages) was to be analysed and compared with available data from other parts of India as well as other agrarian economies. In the third term findings from the first and second terms should be properly scrutinized and taught. Every year a new set of villages was to be identified in order to amass as much data about India’s agrarian life as possible.

Clarifying his advocacy of the spinning wheel Gandhi wrote in Young India (21 November 1929) (Gandhi, 1970b, pp. 195–197):

The spinning movement aims at restoring spinning to the millions of cottages of India from which it was removed by unjust, illegal and tyrannical methods. The movement could not have been started, if somehow or other the cottages which were deprived of this universal supplementary industry had had a substitute provided for it. Unfortunately, or fortunately no substitute was provided. Hence sheer necessity compelled the students of village life, after having exhausted all other means, to resort to the spinning-wheel as the only immediate solution for the serious economic distress that had overtaken the millions of India’s homes by reason of the extinction of cottage spinning. The moment these millions can have a better substitute, they are at a liberty to give up the spinning-wheel, and no one would be more glad than I to see these millions possess a better substitute. (Gandhi, 1970b, p. 195)

Gandhi later pointed out that the All-India Spinners’ Association was, as of 1929, serving one hundred and fifty thousand women in nearly two thousand villages and, in turn, generated ample income opportunities for weavers, washermen, tailors and printers. For Gandhi, this was the surest means to safeguard Indian villagers from unemployment and rampant poverty arising out of the global recession.

A resolution was proposed to the AICC Subjects Committee, drafted by Gandhi in active consultation with Nehru (Gandhi, 1970b, p. 321), which stated that the All-India Spinners’ Association (along with the Anti-Untouchability Committee and Liquor-Prohibition Committee) be granted autonomy to work. However, these committees and associations were not allowed to tamper and/or go against the basic principles guiding Congress. Since the Congress, in 1929, ‘[…] stood for Khaddar’, if the All-India Spinning Association failed to adhere to its commitment of propagating Khaddar and therefore, showed anti-Congress tendencies, Gandhi urged upon the AICC to dismember the relationship (‘Speech at Subjects Committee, AICC- II’) (Gandhi, 1970b, pp. 336–339).

While protecting the rural classes Gandhi also needed to ensure urban workers of their livelihood. Addressing the issue of antagonism between labour and capital Gandhi argued that absolute abolition of the capitalist class would ‘[…] never come about in the world […] instead of mutual distrust and enmity, there should be trust and love between them’ (Navajivan, 22 December 1929) (Gandhi, 1970b, p. 308). The only privilege which the labourers possessed was that of offering their satyagraha. While antagonism between domestic conflicting classes could somehow be mitigated (with non-violence and constructive activities), unjust colonial exploitation of Indian labouring classes required a stronger retaliation.

Therefore, when Nehru brought forth a resolution at the Lahore Congress (1929) defying India’s responsibility to shoulder the financial burden of the British Empire (Report, 1930, p. 60) Gandhi expressed his complete support for inducting it into Congress’ work (‘The Congress’, Young India, 9 January 1930) (Gandhi, 1970b, pp. 374–379). ⁵ The Congress resolution displeased Sir Purshottamdas Thakurdas. He warned Gandhi of adverse reactions the resolution was eliciting in London. The India Office was getting anxious while potential foreign investors were scared to invest in India. Within a month the value of Indian sterling securities in London severely depreciated. Investors and buyers holding Indian currency had become terribly anxious of impending crisis. In an upfront response Gandhi reprimanded Thakurdas for questioning the Congress Resolution rather than endorsing it. He believed that the anxiety pervading the London market was temporary. The British government was responsible for the sufferance of poor Britons. The real goal of the resolution was to make the lives and income of poor peasants and farmers of India tax-free and to put an end to unjust financial exploitation of the Indian masses (Gandhi, 1970b, pp. 446–447).

Gandhi immediately began acquainting himself with the basics of British public finance expenditure, evidenced from his eagerness to write a Prologue to J. C. Kumarappa’s book (Govindu & Malghan, 2016, p. 51). The Congress resolution had to be supported with popular mobilization. After about six weeks of contemplation and rigorous study of colonial finance Gandhi heard his ‘inner voice’ (Fischer, 1951, p. 299) and confided to his readers that Civil Disobedience was the only solution to avoid further exploitation of Indians at the hands of the colonial government (‘When I am Arrested’, Young India, 27 February 1930) (Gandhi, 1970b, pp. 496–498).

In a letter sent to the Indian Viceroy, Lord Irwin, prior to launching the Civil Disobedience Movement (Gandhi, 1971a, pp. 2–8), Gandhi wrote scathingly:

In common with many of my countrymen, I had hugged the fond hope that the proposed Round Table Conference might furnish a solution. But, when you said plainly that you could not give any assurance that you or the British Cabinet would pledge yourselves to support a scheme of full Dominion Status, the Round Table Conference could not possibly furnish the solution for which vocal India is consciously, and the dumb millions are unconsciously, thirsting. (Gandhi, 1971a, p. 3)

The British Parliament and Labour Government were disinterested in ‘[…] any altercation in British policy that might adversely affect Britain’s commerce with India […]’ even though India were to ‘[…] bleed with an ever-increasing speed’ (Gandhi, 1971a, p. 4). British commercial activities and financial policies in the form of excessive taxation on basic goods, Gandhi further stated, were destroying Indian village and cottage industries and completely ruining the lives of poor Indian peasants (‘ryots’). Therefore, if the Indian peasantry had to be rescued from the ‘[…] killing weight […]’ of British imperialism, Independence for India was the only viable solution (Gandhi, 1971a, p. 5). The Civil Disobedience Movement, launched immediately after the Purna Swaraj declaration, distinguished itself from the Non-cooperation Movement. Economic distress was at the foundation of the former which the latter largely missed (owing to its historical origin in the Jallianwala Baug massacre, the Khilafat agitation and the Montford reforms).

The boycott of Lancashire-produced cloth declared by Gandhi in 1930 coupled with pressures on the international market during the financial recession produced extraordinary anxiety amongst British textile and other industrial manufacturers. Gandhi’s declaration of Civil Disobedience and the boycott of foreign goods were meant to produce economic autonomy for India while reaping political dividends. Gandhi and his Congress peers saw British goods’ export to India as the backbone of British Imperialism. Severing ties with British capitalism, it was felt, would lead to extraordinary losses for British manufacturers, forcing them to lobby for lifting political sanctions against India. However, owing to several domestic political pressures Gandhi reluctantly signed a pact with Lord Irwin and withdrew the mass movement.

After his release from prison on 31 January 1931, Gandhi carefully drafted a resolution—on fundamental rights and economic changes for every Indian—which was tabled at the Karachi Congress held in late March 1931 (Gandhi, 1970b, pp. 370–372). Political and economic freedoms were considered to be interdependent in the twenty-points of his resolution. He insisted on continuing with his programme of economic self-reliance for India and reiterated the purpose of boycotting foreign cloth, viz. to generate economic self-reliance and social equality and added that all foreign-cloth (including that from Japan and other foreign countries) was to be banned from entering India.

The Karachi Congress also established a committee of experts, convened by J. C. Kumarappa, to submit a Report on the Financial Obligations between Great Britain and India. The Committee estimated that Britain owed around ₹1100 crores in public debt to India (Govindu & Malghan, 2016, pp. 61–63). Gandhi and the Congress were also struggling to address the British government’s sudden decision (September 1931) to depart from the gold standard, despite grave warnings from George Schuster (Finance Minister in the Indian Imperial Council). Owing to mounting public debt, the colonial government was unwilling to revise the sterling-rupee ratio. By the end of 1931, gold worth ₹174.6 million was exported to Britain (Rothermund, 1992, p. 49), preventing the reflation of the Indian economy. Written in this context, the Report on Financial Obligations served as the Congress’s chief plank to retaliate against British financial measures and was, therefore, held by Gandhi in high esteem (‘Bahadurji Committee’s Report’, Young India, 23 July 1931) (Gandhi, 1971d, pp. 197–192).

Gandhi’s first phase of the Civil Disobedience Movement had reaped great dividends in many parts of India. Punjab, for instance, which was hit by falling agricultural prices since May 1930 joined the movement in large numbers (Mukherjee, 2004). Similarly, peasants from West Bengal, United Provinces and Bihar joined in large numbers. Despite instances of violence from protestors and police brutality, Gandhi held temporary silence (Chakrabarty, 1996; Sharma, 1988). While condemning police violence, he refused to abruptly end the Civil Disobedience.

British income from India was severely affected by the first phase of the movement. British cloth import fell from £26 million in 1929 to £13.7 million in 1930 (Sarkar, 1983, p. 293). By May 1930, the British Exchequer had lost ₹10.85 million in the form of remissions for land revenue and water charges from the Punjab Province alone (Mukherjee, 2004, pp. 95–96). It was important for the British Prime Minister Ramsay MacDonald to bow down to the Congress demands despite strong reservations from groups such as the Indian Empire Society and serious opposition from the senior party leadership.

The Gandhi–Irwin Pact and the Second Round Table Conference

On 5 March 1931, Gandhi declared a suspension of the Civil Disobedience Movement and an end to the agitation against the salt tax. The Pact signed between Lord Irwin and Gandhi reiterated the Congress’ demand for complete independence and Gandhi’s willingness to participate in the second Round Table Conference (Gandhi, 1971b, pp. 250–257). The Pact had saved MacDonald and his government’s major political embarrassment. It also emboldened his position in the Conservative Party and raised the hope of reaching an amicable solution with the Congress without necessarily tearing India from the British Empire (Ball, 2014).

In most of his public statements given during his London tour, Gandhi reiterated the Congress demand for complete independence, which meant total control over army, external affairs, finance and economic policy. He also called for an impartial tribunal to enquire into the economic transactions of the British government in India. Gandhi avowed his undying commitment to improving the lives of India’s Untouchables and to forging broad alliances with dissenting Muslim politicians in the spirit of the constructive programme (Gandhi, 1971e, pp. 5, 8–10, 40–41). Neither Gandhi nor Congress had any intention of ruining Lancashire cotton textile-mills. Their decision to boycott imported cloth was not restricted to England but all foreign-produced cloth, ‘[…] conceived in the interest of [Indian] villagers’ (Gandhi, 1971e, p. 22). India was not to be blamed for the decline in Lancashire textile industries. The primary cause lay in the global depression and ‘[…] the declining capacity of the people to buy even the necessaries of life’ (Gandhi, 1971c, p. 24). Therefore, Gandhi had no plans of targeting Lancashire mills but was rather open to fair trade. As he had suggested in one of his previous articles (‘Lancashire vs Japan’, Young India, 30 July 1930) (Gandhi, 1971d, pp. 234–235) that India, when freed, would grant preference to trade with England owing to the long-standing relations between the two countries. The terms of trade, however, had to be favourable to both countries and could not be at the expense of India’s indigenous industries.

But the ‘[…] honourable settlement between England and India […]’ (Gandhi, 1971e, p. 68), which Gandhi had hoped for, eluded him. After a fall-out at the second Round Table Conference Gandhi returned to India and was faced with Lord Willingdon’s repression unleashed against Congress and Gandhi’s satyagrahis. Gandhi was forced to revive the second phase of Civil Disobedience. However, the movement had lost all its steam during the almost 10 months of its suspension. His second call for Civil Disobedience, therefore, met with stiff resistance from within and outside the Congress.

British and Indian economies were slowly emerging out of the economic slump by late 1933. Gandhi spent most of his time, from 1932 to the middle of 1934, fighting and reconciling with Dr B. R. Ambedkar over separate electorates while crusading against untouchability. ⁶ The growing presence of socialists in Congress, under the leadership of Nehru, considerably irked Gandhi (Gandhi to Vallabhai Patel, 5 September 1934) (Gandhi, 1974, pp. 403–405). Eager to develop village industries, tackle debilities arising out of caste discrimination, popularize the use of khadi and share his agenda of ahimsa and satyagraha, Gandhi embarked on a nation-wide ‘Harijan Tour’ in November 1933. Gandhi formally submitted his resignation of Congress membership during its Bombay session on 30 October 1934. ⁷ Soon thereafter he launched the second phase of his ‘Constructive Programme’.

Conclusion: Towards Constructive Programme

Gandhi’s constructive work in Indian villages, which he managed from his base camp at Sevagram Ashram on the outskirts of Wardha in central Maharashtra, produced mixed results. Gandhi helped in the establishment of the All-India Village Industries Association (14 December 1934) and entrusted Kumarappa with the task of building the organization (Govindu & Malghan, 2016, pp. 72–73). With the aid of growing interest in understanding the workings of the Indian economy through a somewhat systematic study of economics Gandhi was hopeful of protecting Indian peasants from global capitalist shocks, as well as from unjust colonial expropriation. His constructive work, which included the eradication of untouchability and the establishment of communal harmony amongst other issues, also aimed at generating greater employment for agriculturalists who were routinely rendered jobless for almost six months of the year. Jawaharlal Nehru, Subhas Chandra Bose and others found Gandhi’s insistence on rural reconstruction and his ‘obsession’ with khadi incompatible with contemporary economic realities (Markovits, 2004, pp. 119–123). Therefore, they propagated import-substitute-industrialization through national planning. Gandhi, too, was in favour of substituting import but with deindustrialization produced via labour-intensive techniques employed in small-scale and cottage industries. The experience of the Great Depression, apart from his long-standing commitment to equitable distribution of resources through economic rectitude, was one of the key factors behind his Constructive Programme.