Solution

· Statement 1 is correct: There was an unprecedented boom in the Indian trade and industry after the outbreak of World War I due to the increased demand of Indian goods from the allies. This made the prices of essential commodities and services sky high and the wages could not catch up with the increasing cost of living and resulted in the agitation of the worker class. · The Russian revolution of 1917 and the establishment of the USSR held out the prospect of a new social order to the workers. · Statement 2 is incorrect: The Madras labour union (1918), was the first trade union of modern type in India. The president of this organization was B. P Wadia, an active member of the Home Rule movement. · All India Trade Union Congress organised by N M Joshi in 1920 was an amalgamation of 64 trade unions and was presided by Lala Lajpat Rai.