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Question -

What economic impact did the First World War have on India?



Answer -

  1. World War I altered the economic and political situation in India.
  2. Defence expenditure of the Government of India rose manifold. As a consequence taxes on individual incomes and business profits increased several times.
  3. Increased military expenditure and demands for war supplies, resulted in a sharp rise in prices, causing great difficulties for the common people.
  4. Demand for industrial goods (jute bags, cloth, rails) and a decline of imports from other countries led to the expansion of Indian industry. So, Indian business groups earned a huge profit.

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