How had the First World War created a new economic situation in India? Explain with three examples.

First World War created a new economic situation by:

1. New taxes like income tax were introduced and customs duties were raised to finance increasing war expenditure.

2. Prices of goods almost doubled in the few years and became a huge burden for the poor.

3. There was crop failure in many parts of India which led to a shortage of food.

Explanation: The participation of British in WWI proved heavy for Indians; not just financially but also physically. There was even forced recruitment in the village areas.