Question

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

Answer 1

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Explain any three facts about the new economic situation created in India by the First World War.

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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.

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.

Explanation: Another example, 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. ... Crops failed in many parts of India in 1918-19 and 1920-2, resulting in acute shortage of food.