How had the First World War created economic problems in India

Nationalism in India (10)

How had the 'First World War' created economic problems in India? Explain with examples.

Answer

First World War created economic problems in India:

  1. It led to a huge increase on defence expenditure
  2. Taxes were increased
  3. Custom duties were raised.
  4. Income Tax was introduced.
  5. Forced recruitment in Army from rural areas.
  6. The failure of crops in many parts of India.
  7. Prices of consumer goods almost doubled from 1913-1918

First World War 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 hardship for the common people.

Villages were called upon to supply soldiers, and the forced recruitment in rural areas caused widespread anger. Then in 1918-19 and 1920-21, crops failed in many parts of India, resulting in acute shortages of food. This was accompanied by an influenza epidemic. According to the census of 1921, 12 to 13 million people perished as a result of famines and the epidemic.

Exam Year: 2019