All Exams Test series for 1 year @ ₹349 only
Question

What was the primary purpose of the Babington-Smith Committee, appointed in 1919 ?

The correct answer is
To study the impact of the war on Indian exchange, currency system, and note issue practices

Babington-Smith Committee Purpose (1919)

The Babington-Smith Committee was established in British India in the year 1919. Its appointment was a direct consequence of the significant economic shifts experienced during and immediately after World War I. The committee's primary objective was to conduct a thorough examination of the Indian financial system in light of these wartime changes.

Detailed Analysis of Committee Objectives

The central task assigned to the Babington-Smith Committee was to study the effects of the war on key aspects of India's economy. Specifically, its focus included:

  • Investigating the impact on India's exchange rate mechanisms.
  • Examining the prevailing conditions and practices within the Indian currency system.
  • Reviewing the procedures and policies related to Indian note issue practices.

This focus was critical for addressing economic instability and planning future financial policies after the disruption caused by the war.

Evaluation of Provided Options

Let's analyze the given options in the context of the Babington-Smith Committee's mandate:

  • Option 1: To investigate British excesses done under the Rowlatt Act
    The Rowlatt Act (1919) primarily dealt with political dissent and civil liberties. Investigations into excesses related to this act were handled by different bodies, such as the Hunter Committee. This option does not align with the financial and currency focus of the Babington-Smith Committee.
  • Option 2: To study the impact of the war on Indian exchange, currency system, and note issue practices
    This option accurately reflects the historical mandate and primary purpose of the Babington-Smith Committee. The committee was specifically tasked with assessing how World War I affected India's financial structure, including its currency, exchange rates, and the issuance of banknotes.
  • Option 3: To draft a new education policy
    Educational reforms in India were addressed by separate commissions and committees. For instance, the Sadler Commission (1917) focused on university education. The Babington-Smith Committee was not concerned with education policy.
  • Option 4: To look into the causes of famine, formulate general principles and suggest measures of preventive and protective character
    Famine relief and prevention were recurring issues addressed by dedicated Famine Commissions in British India (e.g., in 1880, 1898, 1901). The Babington-Smith Committee's scope was financial, not agricultural or famine-related.

Therefore, the primary purpose of the Babington-Smith Committee appointed in 1919 was to analyze the war's impact on India's exchange, currency, and note issuance systems.

Was this answer helpful?

Important Questions from Economic and Financial Affairs

  1. As per the Economic Survey 2020-21, India's real GDP growth is estimated to contract by ______ in financial year 2020-2021.

  2. The Government of India has set a target of achieving how much solar power capacity by the year 2022?

  3. Which of the following statements about the detailed corporate governance norms for listed companies issued in April 2014 by SEBI is/are correct?

    1. It provides for stricter disclosures and protection of investor rights, including equitable treatment for minority and foreign shareholders

    2. Under the new norms listed companies are required to provide the option of facility of e-voting to shareholders on all resolutions proposed to be passed at general meetings

    Select the correct answer using the code given below.

  4. Pradhan Mantri Jan-Dhan Yojana (PMJDY ) now has in excess of 472 million accounts. Which state has topped this List (as on October 12, 2022)?

  5. In 2018, what was the investment in infrastructure as a percentage of GDP in India?

Need Expert Advice?

Start Your Preparation with Prepp Mobile App

Download the app from Google Play & App Store
Download the app from Google Play & App Store
Prepp Mobile App