Q1. [1] medium thorough-understanding
Which of the following best explains why Indian peasants producing for the world market suffered more during the Great Depression than those producing mainly for local consumption?
(A) World-market producers had to pay higher taxes, while subsistence farmers were exempt from revenue demands.
(B) Their incomes fell sharply with collapsing global prices, but their fixed obligations — rent, loans, and revenue — remained unchanged.
(C) Colonial authorities deliberately directed relief funds only to subsistence farmers during the Depression.
(D) World-market producers had borrowed more from foreign banks, which charged higher interest rates than local moneylenders.
- A World-market producers had taken larger loans from British banks and had higher repayments.
- B Their incomes depended on international commodity prices that crashed, while colonial revenue demands stayed fixed, squeezing them from both sides.
- C The colonial government imposed extra export duties specifically on cash crops during the depression.
- D Local-market producers received government subsidies that world-market producers were denied.
Generated by claude-sonnet-4-6 · 2026-06-26 15:01 · grounding rag
Model Answer
Answer: (B)
Their incomes depended on international commodity prices that crashed, while colonial revenue demands stayed fixed, squeezing them from both sides.
Explanation
The textbook explicitly states: "Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit." This directly supports option B. The key idea is the double squeeze — falling income + unchanged fixed obligations (revenue, rent, loans). Options A, C, and D are not supported by the source.