Change set

Pick exam & year, then Go.

Question map
Not attempted Correct Incorrect ★ Bookmarked
Loading…
Q12 (IAS/2026) History & Culture › National Movement (1857–1947) Official Key

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?

Result
Your answer: —  ·  Correct: A

Explanation

The correct answer is Option A.

The Hilton-Young Commission (1926), officially known as the Royal Commission on Indian Currency and Finance, recommended fixing the rupee-sterling exchange rate at an artificially higher rate of 1s 6d (one shilling and six pence) instead of the pre-war rate of 1s 4d.

Indian nationalists and industrialists fiercely opposed this higher exchange rate because an overvalued rupee made Indian exports more expensive in the global market and made British imports cheaper, thus harming domestic industries and agriculture.

However, the British Government adopted the 1s 6d rate primarily to reduce the fiscal burden of "Home Charges"—the fixed sterling obligations and remittances sent from India to Britain to cover administrative costs, debt interest, military expenses, and pensions. A stronger rupee meant that fewer rupees were required from the Indian revenue to meet these sterling obligations. This artificially fixed rate effectively aided the flow of remittances to Britain, helped balance the colonial budget, and maintained India's creditworthiness in the London financial market.

How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
53%
got it right
✓ Thank you! We'll review this.

SIMILAR QUESTIONS

CDS-I · 2021 · Q95 Relevance score: -5.75

Exchange rates state the value of one currency in terms of other currencies. Which one of the following statements with respect to the exchange rate of currency is correct ?

IAS · 2022 · Q92 Relevance score: -6.18

With reference to the Indian economy, consider the following statements : 1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee. 2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness. 3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER. Which of the above statements are correct ?

CDS-II · 2010 · Q52 Relevance score: -6.23

Prior to 1813, which among the following measures, was not adopted by the British to exploit the Indians economically ?

IAS · 1995 · Q27 Relevance score: -6.43

As part of the liberalisation programme and with a view to attracting foreign exchange, the Government and the RBI have devised two schemes known as FCNR-’A’ and FCNR-’B’. Which of the following is/are true regarding these two schemes ? I. Under scheme ‘A’ RBI bears exchange rate fluctuations. II. Under scheme ‘B’, other banks are to meet out the difference in exchange rate fluctuations. III. Both the schemes stand withdrawn now. IV. Only scheme ‘A’ has been withdrawn. Select the correct answer from the codes given below : Codes :

IAS · 1996 · Q34 Relevance score: -6.72

One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because