Describe the implications of First World War on the economic and political situation of India.

Explanation

(i) The war created new economic and political situations.
(ii) It led to huge increase in defence expenditure which was financed by war loans.
(iii) To fulfil the loan demands taxes were increased, custom duties were raised. Income tax was introduced.
(iv) Prices increased, doubling between 1913 and 1918. This hit the common people.
(v) Villagers and farmers were forcefully recruited in the British army.