How had the First World War created economic problems in India?

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It led to a huge increase in defence expenditure.

Income tax was introduced.

Forced recruitment in the army.

All of the above.

answer is D.

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Detailed Solution

All of the above statements are the economic problems that were created by the First World War in India. The first world war brought about a new political and economic environment. It resulted in a significant increase in defence spending, which was financed by war loans, increased taxes and higher customs duties. Prices rose throughout the war years, doubling between 1913 and 1918, making life extremely difficult for the common citizen. Soldiers were needed from villages, and the forced recruitment of people in rural regions sparked intense anger. Later, during 1918–19 and 1920–21, many Indian regions had crop failures that resulted in severe food shortages. At the same period, there was a pandemic of influenza. Famines as well as the pandemic caused the deaths of twelve to thirteen million people, as determined by the 1921 census.

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