Question

Q-1 How did the first world war create a new economic situation in India?

Answer 1

(a) The war created a new economic and political situation.(b) it led to huge increase in defense expenditure which was financed by war loans and increasing taxes, custom duties were raised and income tax was introduced.(c) Prices increased, doubling between 1913-18. This hit the common people.(d) Villagers were asked to supply soldiers and through force recruitment in rural areas.(e) During 1918-19, crops failed in many parts of India which created shortage of food.(f) Spread of influenza epidemic and 12 to 13 million people died.