The artificially fixed rupee-sterling exchange rate prescribed by the Hilton-Young Commission (1926)

Question

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?

Accepted Answer

The Hilton-Young Commission (1926) recommended fixing the rupee-sterling exchange rate at 1s 6d per rupee to ease the burden of "Home Charges" — mandatory sterling-denominated remittances from India to Britain for administrative costs, pensions, military expenses, and public debt interest. By keeping the rupee artificially strong, fewer rupees were needed to purchase the sterling required, facilitating steady fund flow to Britain and maintaining India's creditworthiness in London.