What is impact of first world war on the economy of India?
Dear student,
- The First World War led to a huge rise in the defence expenditure of the Government of India.
- Business groups reaped fabulous profits from the war. The war created a demand for industrial goods such as jute bags, cloth and rails, and caused a decline in the imports from other countries into India. Indian industries expanded during the war.
- The government in turn increased taxes on individual incomes and business profits.
- Increased military expenditure and the demands for war supplies led to a sharp rise in prices which created great difficulties for the common people