How did the First World War affect the Indian economic situation?

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All of the above

Let us increase defence expenditure

It increases taxes and revenue for the poor people

It created a new economic and political situation.

answer is D.

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Detailed Solution

The First World War affected the Indian economic situation as It created a new economic and political situation. It led to a huge increase in defence expenditure, which financed war loans and increased taxes and revenues on the poor people of India. The participation of the British government in the First World War also led them to forcefully recruit rural people unfamiliar with the workings of the army. The world war also increased customs duties, and an income tax was introduced. Commodity prices doubled between 1930 and 1980, which made it difficult for poor people to afford those commodities. During these years, Indians were hit with a crop failure plague epidemic. Still, the British government was not ready to decrease the revenue rate, which led to widespread resentment and anger among Indians.

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