Question
What economic impact did the First World War have on India?
Solution
The economic impact of the First World War:
(i)The First World War led to a huge rise in the defence expenditure of the Government of India. The government in turn increased taxes on individual incomes and business profits.
(i)The First World War led to a huge rise in the defence expenditure of the Government of India. The government in turn increased taxes on individual incomes and business profits.
(ii)Increased military expenditure and the demands for war supplies led to the sharp rise in prices which badly affected the common mass. They found it difficult to fulfil even their essential needs.
(iii)On the other hand business groups reaped fabulous profits from the war. The war created a demand for industrial goods like jute bags, cloth, rails, and caused a decline of imports from other countries into India. As a result Indian industries expanded during the war.
