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 ?
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Answer: A. The Hilton-Young Commission fixed the rupee at 1 shilling 6 pence (above the older 1s 4d). A higher rupee meant fewer rupees were needed to pay Britain the 'Home Charges' and other remittances, and a stable, high rupee kept India's credit good in London. This served British financial interests.
Watch for: Option D sounds technical and official, but the real motive was easing Britain's remittances from India.
Why the other options are wrong
- B. Wrong because helping Indian importers was not the official reason; the decision served British remittance interests.
- C. Wrong because a high (overvalued) rupee actually hurt Indian exports such as cotton.
- D. Wrong because the rupee was then on a gold bullion standard and the aim was about sterling remittances, not stopping gold depreciation.
Source to check: Bipan Chandra, 'History of Modern India' (Orient BlackSwan), chapter on economic impact of British rule; Report of the Royal Commission on Indian Currency and Finance (Hilton-Young), 1926
Answer from the provisional UPSC key; it may change when the final key is out. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.