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?
Correct answer: A
Explanation
The Hilton-Young Royal Commission on Indian Currency and Finance (1926) recommended a gold-bullion standard pegging the rupee at 1s 6d sterling — an artificially high rate which the British adopted primarily to facilitate the smooth remittance of 'Home Charges' (pensions, debt service, civil and military payments) to Britain and to safeguard India's creditworthiness in London. The over-valued rupee actually hurt Indian exporters (especially cotton) and helped Lancashire imports, so options (b) and (c) are wrong. Bipan Chandra's India's Struggle for Independence and India Since Independence both note this drain-of-wealth dimension.