Question

explain any three facts about new economic situation created in india by first world war

Answer 1

1.It led to a huge increase in defence expenditure which was financed by war loans and increasing taxes.
2.Custom duties were raised and income taxes were introduced.
3.Through the war year prices increased doubling between 1913 and 1918leading to extreme hardship for the common people.

Answer 2

☘️ Answer:

The First World War created a dramatically new economic situation in India:

(i) Manchester imports into India declined as the British mills were busy with war production to meet the needs of the army paving the way for the Indian mills to supply for the huge home market.

(ii) As the war prolonged, Indian factories were called upon to supply war needs. As a result new factories were set up, new workers were employed and everyone was made to work longer hours.

(iii) Cotton production collapsed and exports of cotton cloth from Britain fell dramatically after the war, as it was unable to modernize and compete with US, Germany, Japan. Hence within colonies like India, local industrialists gradually consolidated their position capturing the home market.