The artificially fixed rupee-sterling exchange rate prescribed by the Hilton-Young Commission (1926) was adopted by the British Government for which one of the following reasons ?
A
Aiding the flow of remittances from India and maintaining India's creditworthiness
Correct answer
B
Providing support to Indian importers
C
Encouraging export of cotton produce from India
D
Preventing depreciation of the Rupee in terms of gold
Explanation
The Hilton-Young Commission (Royal Commission on Indian Currency and Finance, 1926) fixed the rupee at 1s 6d instead of the pre-war 1s 4d. The British accepted the higher rate because it made India's sterling payments (home charges, pensions, interest on debt) cheaper in rupee terms and protected the Government of India's creditworthiness in London. Indian nationalists opposed it because it hurt exporters and helped importers, but helping importers was a side effect, not the reason the British gave.
Modern Indian HistoryColonial economy and currency policyHilton-Young CommissionRupee-sterling ratio1s 6dHome chargesCurrency policy