This ‘fact’ like so many others had been flooding my timeline for long and when the wannabe-PM Narendra Modi also repeated the same (without fact-checking of course. Facts don’t always make for bombastic speeches) and his fans took it as gospel truth (some of his followers may disagree with my use of the phrase).
I did my own calculations and also came across a Business Standard story that reaches more or less to the same conclusion: In 1947 the US dollar was equal to about Rs 3 and not Re 1.
First my own calculations:
In 1947 the Bretton Woods system was the prevalent exchange system in the world and India also adopted it. According to it, the value of the Indian rupee was pegged as equivalent to the value of 0.268601 gram of gold and the price of gold was fixed at $35 per ounce. If we use this as a standard, then a little math tells us that the value of $1 comes to Rs 3.015575144061567, not Re 1 as Modi loudly proclaimed in Hyderabad (and also by other politicians from other parties).
Now to what Business Standard has to say:
At the time of independence, India’s currency was pegged to pound sterling, and the exchange rate was a shilling and six pence for a rupee – which worked out to Rs 13.33 to the pound. The dollar-pound exchange rate then was $4.03 to the pound, which in effect gave a rupee-dollar rate in 1947 of around Rs 3.30.
The variation between the two figures is less than one-third of a rupee, but is 200% more than what Modi claimed.
Moral of the story: Don’t believe in (and like) everything that appears on your Facebook timeline or for that matter what Narendra Modi (and other politicians) say.