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The First World War and economic impact on India

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yasmin abdulle

on 6 November 2013

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Transcript of The First World War and economic impact on India

Economy in India during the war.
- During WW1, India flourished in business and economic terms but when the war ended, Indian businessmen faced ruin as competition from British goods resumed.

- At the outbreak of the war, India was in a relatively strong financial position. Crops and export trade were good. The international trade in cotton and some food produces was mostly with countries that were part of the Central Powers.

- When it became clear that Britain was going to be part of the Allies in the war, Indian trade dropped off; however, it recovered quickly......
India's recovery..
- Just before the war, India had a surplus of approximately
$6.2 million. By the next year, that was a deficit of almost $14 million.
- However India made a lot of money from the war preparations because it charged high prices for raw materials and products. It managed to reduce its deficit by about $5 million in one year.
- The next year, India had erased the deficit and was making a lot of money.
- As a colony of Great Britain, India was already contributing people and goods to the war effort. In 1917, India offered a gift to its colonial rulers—an extra $500 million for the war. India also paid all the costs for its own troops throughout the war (about $100 million total).
Economic Effects of the Government of India Act.
- There were Lay-offs and unemployment as the demand for war materials, particularly textiles collapsed.
- To worsen things the failure of the monsoon to deliver which led to crop failure and regional famine.
How did the First World War affect the Indian government?
( Revenue - Government Income)
( Allied war effort - Work done during the war with the allies)
Surplus
an amount of something left over when requirements have been met; an excess of production or supply
Deficit
the amount by which something, especially a sum of money, is too small.
The First World War and the economic impact on India
- By the end of the First World War Indian Revenues had contributed over £146m to the Allied war effort. Half of this was made up of war loans.
- Military expenditure had risen dramatically and revenue demands raised.
- 16% in 1916-17
- 14% in 1917-18
- 10% in 1918-19.
Due to these demands taxation had increased and the indian people felt the effects of the war.
Lay- offs
terminate employment of somebody: to stop employing somebody when there is insufficient work to be done

Rising Prices
- During the war prices of food grains rose by 93%.
- Indian made goods 60%
- Imported goods 190%
These rise in prices were caused by the disruption of war to normal trading patterns, exchange rate problems and the demands of the military.
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