UPSC CSE Prelims
Question 44
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?
View correct answer and explanation
Correct answer: A
Correct Option: A
Explanation: The Hilton–Young Commission’s exchange-rate recommendation favoured the colonial financial framework by facilitating sterling remittances and external credit standing.
Option-wise Analysis:
A: Correct - The policy protected remittance flows and imperial financial interests rather than serving Indian producers alone.
B: Incorrect - A relatively high rupee rate tended to favour imports and was not designed mainly as a concession to importers.
C: Incorrect - A strong rupee could make Indian cotton exports less competitive rather than stimulate them.
D: Incorrect - The central rationale was exchange and financial management; preventing every fall against gold is too narrow a description.
Review note: Economic historians debate the distributional motives of the 1s 6d sterling exchange policy; cite a specialist source for the stated primary intention.