In the context of British rule in India, Sterling balances refer to:a)band of exchange rate to be followed by British government between sterling and Indian rupee.b)Britainandrsquo;s earnings on its exports to India which was paid in the currency of Indian rupee.c)payments from the Britain to India to compensate for 200 years of its colonial rule.d)Indiaandrsquo;s earnings in foreign currency on its exports for the war credited to the account of the Reserve Bank of India in London.Correct answer is option 'D'. Can you explain this answer?

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In the context of British rule in India, Sterling balances refer to:

a)
band of exchange rate to be followed by British government between sterling and Indian rupee.
b)
Britain’s earnings on its exports to India which was paid in the currency of Indian rupee.
c)
payments from the Britain to India to compensate for 200 years of its colonial rule.
d)
India’s earnings in foreign currency on its exports for the war credited to the account of the Reserve Bank of India in London.

Correct answer is option 'D'. Can you explain this answer?

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In the context of British rule in India, Sterling balances refer to:a)...

Sterling balances were India’s earnings in foreign currency on its exports for the war, deposited in the Bank of England in the form of sterling to the credit of the Reserve Bank of India (RBI) account in England. The balance had grown with import controls limiting forex outflows. The corresponding increase in rupee circulation stoked war inflation in India. Hence, option (d) is the correct answer.

After the war ended, the transfer of the sterling balances was negotiated between India and Britain. (After Partition, Pakistan joined the talks.) Under this interim agreement, India could spend from the balances in dollars, as Britain had agreed to make the pound convertible under the terms of a loan from the U.S. But Britain soon repudiated the convertibility clause, in turn altering the character of the agreement entered into with India. Pound convertibility was ruled out by the sorry state of British production after the war years. Pent-up demand for consumer goods could only be met with imports from the U.S. Pound convertibility would have exhausted British forex reserves.
A delegation was sent back to London to renegotiate the convertible portion of the sterling balances. It returned empty-handed. The negotiations were concluded in the summer of 1949, after the completion of the bitter separation of Indian and Pakistani finances. The Indian side, led by Finance Minister John Mathai, agreed to two types of deductions from the sterling balances. First, towards the pensions of former British members of the ICS. Second, the value of military equipment, regardless of the condition and worth, the British forces had left behind. The subtractions added to £100 million. Limits were placed on how much could be drawn in a given period from the balances.

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In the context of British rule in India, Sterling balances refer to:a)...

's control over India's foreign exchange reserves held in British banks.c)the amount of money that India owed to Britain for importing goods and services.d)the British government's policy of maintaining a fixed exchange rate between the Indian rupee and the British pound.

Answered by Notes Wala · View profile

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In the context of British rule in India, Sterling balances refer to:a)band of exchange rate to be followed by British government between sterling and Indian rupee.b)Britain’s earnings on its exports to India which was paid in the currency of Indian rupee.c)payments from the Britain to India to compensate for 200 years of its colonial rule.d)India’s earnings in foreign currency on its exports for the war credited to the account of the Reserve Bank of India in London.Correct answer is option 'D'. Can you explain this answer?

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In the context of British rule in India, Sterling balances refer to:a)band of exchange rate to be followed by British government between sterling and Indian rupee.b)Britain’s earnings on its exports to India which was paid in the currency of Indian rupee.c)payments from the Britain to India to compensate for 200 years of its colonial rule.d)India’s earnings in foreign currency on its exports for the war credited to the account of the Reserve Bank of India in London.Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about In the context of British rule in India, Sterling balances refer to:a)band of exchange rate to be followed by British government between sterling and Indian rupee.b)Britain’s earnings on its exports to India which was paid in the currency of Indian rupee.c)payments from the Britain to India to compensate for 200 years of its colonial rule.d)India’s earnings in foreign currency on its exports for the war credited to the account of the Reserve Bank of India in London.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the context of British rule in India, Sterling balances refer to:a)band of exchange rate to be followed by British government between sterling and Indian rupee.b)Britain’s earnings on its exports to India which was paid in the currency of Indian rupee.c)payments from the Britain to India to compensate for 200 years of its colonial rule.d)India’s earnings in foreign currency on its exports for the war credited to the account of the Reserve Bank of India in London.Correct answer is option 'D'. Can you explain this answer?.

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