How had the First World War created economic problems in India? Explain.
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The War created a new economic and political situation:
- It led to a huge increase in defence expenditure which was financed by war loans and increasing taxes, customs duties were raised, and income tax introduced.
- Through the war years, prices increased–doubling between 1913 and 1918–leading to extreme hardships for the common people.
- Villagers were called upon to supply soldiers, and the forced recruitment in rural areas caused widespread anger.
- The First World war gave a boost to the Indian industries. Since textile industries in Britain began to supply goods related to the War like uniforms, shoes and racksags, the Indian industries took advantage of the void and bagan to manufacture the cloth.
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