Question

2. Explain any three facts about the new economic situation
created in India by the First World War. (3)​

Answer 1

Answer:

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.

Explanation:

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Answer 2

Answer:

The First World War created a new economic situation in India.

1. The huge increase in defense expenditure was financed by war loans and increasing taxes. Customs duties were raised and income tax was also introduced.

2. The prices of commodities doubled between 1913-1918, leading to extreme hardships for the common people. Villages were also called upon to supply soldiers, and forced recruitment in rural areas caused widespread anger.

3. Crops failed in many parts of India in 1918-19 and 1920-2, resulting in acute shortage of food. This acute economic situation was further accompanied by an influenza epidemic and according to the census of 1921, about 12 to 13 million people perished because of the famine and the epidemic.