Green’s Dictionary of Slang

1. impoverished, penniless.

1908

Sporting Times 25 Apr. 4/3: If the outlook is gritty, you’ll go to the City, / And ‘sub.’ a stray quid or a brace; / Then, as soon as you cop ’em, on Land League you’ll pop ’em, / The ‘City and Sub.,’ win and place.

2. in ‘straitened circumstances’.

1967

Daily Tel. mag. 10 Mar. n.p.: The Prime Minister’s sheep words range from ‘gritty’ (meaning – well, what does it mean?) to the statesmanslike exhortation ‘Belt up.’.