The First World War created a new political and economic situation in India.
(i) It led to huge increase in defense expenditure, Custom duties were raised, income tax was introduced to finance the war.
(ii) Villagers were called upon to supply soldiers, forced recruitment in rural areas caused widespread resentment.
(iii) Prices of essential commodities doubled between 1913 and 1918 leading to extreme hardship to the common people.
(iv) In 1918-19, 1920-21 crops failed in many parts of India resulting in acute food shortage. (v) Influenza epidemic spread. According to the census in 1921, 12-13 million people perished due to famines and epidemics.
