Question
Explain any three facts about the new economic situation created in India by the First World War.
Solution
The First World War created a new economic situation in India. The facts were:
(i) It led to a huge increase in defence expenditure which was financed by war loans and increasing taxes.
(ii) Customs duties were raised and income tax was introduced.
(iii) Through the war years prices increased-doubling between 1913 and 1918 - leading to extreme hardship for the common people.
