INSIGHT UPSC QUIZ

GS History Modern India
Q.

The British rule in India had led to drain of wealth of India.Which of the following statements are true about this?

1. 'Home Charges' included pension of British Indian officers.

2. The 'Council Bills' were exchanged in rupees in India.

3. The 'Council Bills' were issued by the Governor General of India/Viceroy of India.

Select the correct answer using the code given below

Explanation:
  • The 'Council Bills' were issued by the The Secretary of States.
  • In British India, apart from existing imports and exports, there was also a particular amount of money which colonial India contributed towards administration, maintenance of the army, war expenses,pensions to retired officers and other expenses accrued by Britain towards maintenance of her colony. These were known as "Home charges" and were paid for almost entirely by India.
  • The Home charges was made of three components (1) Interest payable on Indian debt. (2)Interest on the railways (3) Civil and military charges.
  • This ‘drain’, estimated at 5 per cent to 6 per cent of the total resources of India, took place through the notorious council bill system. British buyers of Indian exports paid sterling for council bills obtained from the secretary of state in London. The council bill were then presented by British trading firms in India to exchange banks where they were exchanged for rupees from the government of India’s revenues. The rupees were then advanced to finance the production and trade in export commodities, for example, jute. The rupee profit could subsequently be use to by sterling bills at local branches of British – owned exchange banks and London paid sterling against these bills. The sterling could then once again be used to buy council bills and so the annual cycle repeated itself.

Thus, Option A is Correct.

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