Structure of Government & Policies of the British Empire in India- 1 | Additional Study Material for UPSC PDF Download

Structure of Government and economic policies of British Empire in India (1757- 1857) : Administrative organization, Social and Cultural policies

STRUCTURE OF GOVERNMENT UNDER EAST INDIA COMPANY (1757 - 1857)

• When the officials of the East India Company acquired control over Bengal in 1765, they had little intention of making any innovations in its administration. They only desired to carry on their profitable trade and collect taxes for remission to England.  From 1765 to 1772, in the period of the Dual Government, Indian officials were allowed to function as before but under the Overall control of the British Governor and British officials. 
• The Indian officials had responsibility but no power while the Company’s officials had power but no responsibility. Both sets of officials were venal and corrupt men. In 1772 the Company ended the Dual Government and undertook to administer Bengal directly through its own servants. But the evils inherent in the administration of a country by a purely commercial company soon came to the surface. 
• The East India Company was at this time a commercial body designed to trade with the East. Moreover, its higher authority was situated in England, many thousands of kilometers away from India. Yet, it had come to wield political power over millions of people. This anomalous state of affairs posed many problems for the British government. 
• The rich resources of Bengal had fallen into the hands of the Company whose Directors immediately raised dividends to 10 per cent in 1767 and proposed in 1771 to raise the rate further to 12 ½ per cent. 
• The Company’s English servants took advantage of their position to make quick fortunes through illegal and unequal trade and the forcible collection of bribes and ‘gifts’ from Indian chiefs and zamindars. Clive returned to England at the age of 34 with wealth and property yielding £40,000 a year. 
• Merchants kept out of the East by the monopoly of the Company, the growing class of manufacturers and, in general, the rising forces of free enterprise in Britain wanted to share in the profitable Indian trade and the riches of India which the Company and its servants alone were enjoying. 
• They, therefore, worked hard to destroy the Company’s trade monopoly and, in order to achieve this, they attacked the Company’s administration of Bengal. They also made the officials of the Company who returned from India their special target. 
• These officials were given the derisive title of ‘nabobs’ and were ridiculed in the press and on the stage. They were boycotted by the aristocracy and were condemned as the exploiters and oppressors of the Indian people. Their two main targets were Clive and Warren Hastings. By condemning the ‘nabobs’, the opponents of the Company hoped to make the Company unpopular and then to displace it. 
• Many ministers and other Members of Parliament were keen to benefit from the acquisition of Bengal. They sought to win popular support by forcing the Company to pay tribute to the British government so that Indian revenues could be used to reduce taxation or the public debt of England. 
• The first important parliamentary act regarding the Company’s affairs was the Regulating Act of 1773. This Act made changes in the constitution of the Court of Directors of the Company and subjected their actions to the supervision of the British Government. The Regulating Act soon broke down in practice. It had not given the British government effective and decisive control over the Company. 
• The Act had also failed to resolve the conflict between the Company and its opponents in England who were daily growing stronger and more vocal. Moreover, the Company remained extremely vulnerable to the attacks of its enemies as the administration of its Indian possessions continued to be corrupt, oppressive, and economically disastrous. 
• The defects of the Regulating Act and the exigencies of British politics necessitated the passing in 1784 of another important act known as the Pitt’s India Act. This Act gave the British government supreme control over the company’s affairs and its administration in India. It established six commissioners for the affairs of India, popularly known as the Board of Control, including two Cabinet Ministers. 
• The Board of Control was to guide and control the work of the Court of Directors and the Government of India. The Act placed the Government of India in the hands of the Governor-General and a Council of three, so that if the Governor-General could get the support of even one member, he could have his way. 
• The Act clearly subordinated the Bombay and Madras Presidencies to Bengal in all questions of war, diplomacy, and revenues.  With this Act began a new phase of the British conquest of India. While the East India Company became the instrument of British national policy, India was to be made to serve the interests of all sections of the ruling classes of Britain. 
• While the Pitt’s India Act laid down the general framework in which the Government of India was to be carried on till 1857, later enactments brought about several important changes which gradually diminished the powers and privileges of the Company. In 1786, the Governor-General was given the authority to overrule his Council in matters of importance affecting safety, peace, or the interests of the empire in India. 
• By the Charter Act of 1813, the trade monopoly of the Company in India was ended and trade with India was thrown open to all British subjects. But trade in tea and trade with China was still exclusive to the Company. The government and the revenues of India continued to be in the hands of the Company. The Company also continued to appoint its officials in India. 
• The Charter Act of 1833 brought the Company’s monopoly of tea trade and trade with China to an end. At the same time, the debts of the Company were taken over by the Government of India, which was also to pay its shareholders a IOV2 per cent dividend on their capital. The Government of India continued to be run by the Company under the strict control of the Board of Control.

ECONOMIC POLICIES OF BRITISH EMPIRE IN INDIA (1757 - 1857)
➢ Commercial Policy

• After the battle of Plassey in 1757, the pattern of the Company’s commercial relations with India underwent a qualitative change. Now the Company could use its political control over Bengal to acquire monopolistic control over Indian trade and production and push its Indian trade. Moreover, it utilised the revenues of Bengal to finance its export of Indian goods. 
• The activity of the Company should have encouraged Indian manufacturers, for Indian exports to Britain went up from £1.5 million in 1750-51 to £5.8 million in 1797-98, but this was not so. The Company used its political power to dictate terms to the weavers of Bengal who were forced to sell their products at a cheaper and dictated price, even at a loss. 
• Moreover, their labour was no longer free. Many of them were compelled to work for the Company for low wages and forbidden to work for Indian merchants. The Company eliminated its rival traders, both Indian and foreign, and prevented them from offering higher wages or prices to the Bengal handicraftsmen. 
• The servants of the Company monopolized the sale of raw cotton and made the Bengal weaver pay exorbitant prices for it. Thus, the weaver lost both ways, as a buyer as well as a seller. At the same time, Indian textiles had to pay heavy duties on entering England. The British government was determined to protect its rising machine industry whose products could still not compete with the cheaper and better Indian goods. 
• Even so Indian products held some of their ground. The real blow to Indian handicrafts fell after 1813, when they lost not only their foreign markets but, what was of much greater importance, their market in India itself. The Industrial Revolution in Britain completely transformed Britain’s economy and its economic relations with India. 
• During the second half of the eighteenth century and the first few decades of the nineteenth century, Britain underwent profound social and economic transformation, and British industry developed and expanded rapidly on the basis of modern machines, the factory system, and capitalism. This development was aided by several factors.

➢ Land Revenue Policy
(i) The Permanent Settlement (1793 A.D.)

• To remove the defects of the revenue system, Lord Cornwallis introduced a new system of revenue collection in Bengal, Bihar and Orissa, known as the Permanent Settlement. Under this system, the zamindar or the revenue collector of an estate became the permanent holder of the land. 
• The zamindar gained hereditary rights over the land. He was required to pay a fixed amount of revenue as tax to the Company by a fixed day of the year. If he failed to pay by the fixed day, his zamindari would be confiscated and sold. The cultivators now became tenants of the zamindars. They could be evicted by the zamindars for non-payment of their dues. Many of them lost their land. 
• The Permanent Settlement benefited the landlords more than the government. The Company was assured of fixed revenue at a fixed time no doubt, but it was deprived of a share of any additional income of the landlords from increasing cultivation on land. The cultivators were also left at the mercy of the zamindars who exploited them.

(ii) Mahalwari System
The Mahalwari System was introduced in Punjab, parts of Madhya Pradesh and Western Uttar Pradesh. It was a settlement with the village community because common ownership of land prevailed in these areas. (Mahal means group of villages.) The talukdar or head of the mahal was responsible for collecting revenue from the villages.

(iii) The Ryotwari System
In the Madras Presidency, Ryotwari System was introduced. In this system direct settlement was made between the Government and the cultivators or the ryots. Land revenue was fixed for a period of 30 years. Peasants had to pay about half of the total produce as tax.