How did the First World War alter the economic and political situation in India?
The First world War led to a huge rise in the defence expenditure of the Government of India. 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 that created difficulties for the common people. On other side business groups reaped fabulous profits from the war. The war created demand for industrial goods and there was seen a decline of imports from other countries into India so Indian industries expanded during the war. These industries began demanding greater opportunities for development. All this shows the way economic and political situation altered in India with the event of the First World War.
