The artificially fixed rupee-sterling exchangerate prescribed by the Hilton-Young Commission (1926) was adopted by the British Government for which one of the following reasons?

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

(b) Providing support to Indian importers

(c) Encouraging export of cotton produce from India

(d) Preventing depreciation of the Rupee in terms of gold

Key proper nouns

• Hilton-Young Commission (1926): Formally the Royal Commission on Indian Currency and Finance. Appointed by the British Government in August 1925 and chaired by Lt. Commander (later Sir/Lord) Edward Hilton Young. It submitted its report in July 1926. Key recommendations included fixing the rupee-sterling exchange rate at 1 shilling 6 pence (1s 6d, or ₹15 = £1 — higher than the pre-war “natural” rate of 1s 4d favoured by many Indians), adopting a gold bullion standard, and establishing a central bank (this directly led to the Reserve Bank of India Act 1934 and the RBI’s founding in 1935). There was a notable dissent by Indian member Sir Purshotamdas Thakurdas against the high rate.

• British Government: The colonial administration (Government of India / Secretary of State) that adopted the Commission’s exchange-rate recommendation (formally implemented around 1927). The rate served imperial fiscal interests.

• Rupee-sterling exchange rate / artificially fixed rate: The 1s 6d peg. It was “artificial” because it overvalued the rupee relative to market conditions of the early 1920s and was defended by government intervention. This is central to the 1920s “Ratio Controversy.”

• Related contextual terms (Home Charges, remittances, creditworthiness): Home Charges were the large sterling obligations (pensions, military costs, interest on debt, India Office expenses, etc.) remitted annually from India to Britain. A stronger rupee reduced the number of rupees needed to buy the required sterling, easing the colonial budget and supporting India’s standing as a borrower in London.

Where these appear

Static / historical primary sources  

• Official 1926 Report of the Royal Commission on Indian Currency and Finance and the associated Minutes of Evidence (archived on Internet Archive, Central Secretariat Library / government repositories, and indianculture.gov.in).

• Contemporary yearbooks and economic histories from the 1920s–1930s.

• RBI’s own historical volumes and documents (rbidocs.rbi.org.in) treat the Commission as the direct precursor to the central bank and discuss the exchange-rate decision in detail.

NCERT and school/college textbooks  

• Not a headline topic in the core Class 11/12 History or Economics NCERT chapters that were sampled (colonial economy, drain of wealth, and currency issues are covered at a more general level). The specific Commission name and the 1s 6d controversy appear more frequently in detailed modern Indian economic history materials used for higher secondary or competitive-exam preparation rather than in the main NCERT prose.

Government websites  

• Prominently featured on the Reserve Bank of India website and in RBI official histories as the body whose recommendations created the institutional framework for modern Indian central banking and currency management.

• References also appear in broader colonial-administration and archival materials on government portals.

  
  

Newspapers (The Hindu, Indian Express, others) — static and recent  

• Static/archival: Contemporary 1926 coverage existed (e.g., summaries in papers of the era such as The Tribune). Later economic-history writing has repeatedly referenced the “ratio controversy.”

• Recent (especially 2026): The Financial Express published a notable April 2026 opinion piece marking the 100th anniversary of the Hilton Young Commission report and its role in paving the way for the RBI. UPSC-oriented analyses after the 2026 Prelims extensively discussed the question, linking the high rate to Home Charges and creditworthiness.