Having acquired the vast empire of India, the East India Company had to devise suitable methods of government to control and administer it. The administrative policy of the company underwent frequent changes over a long period of hundred years, however, these changes never lost sight of its main objective to increase the Company’s profit. The administrative machinery of the Government of India was designed and developed to serve these interests, emphasizing the maintenance of law and order, so that trade with India and exploitation of its resources could be carried on without any disturbances.
THE STRUCTURE OF THE GOVERNMENT
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 to collect taxes for remission to England. From 1765 to 1772, in the period of 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 officials had power, but no responsibility. So, both sets of officials were corrupt. In 1772, the Company ended the Dual Government and undertook to administer Bengal directly, through its own servants.
PROBLEMS FACED BY THE COMPANY
The East India Company was at that time, a commercial body designed to trade with the East, and its higher authority was situated in England, many thousands of kilometres away from India. There were many problems, which affected the effectiveness and economy of the British Government. These were as follows
- How to control the great multitude of officials and soldiers stationed in India?
- How to provide a single center of control?
- What was to be the relation of the Company to the British Government in England?
The above-mentioned problems were the most pressing as well as most important. It involved the party and parliamentary rivalries in Britain, the political ambitions of English statesmen, and the commercial greed of English merchants. The rich resources of Bengal had fallen into the hands of the Company whose directors immediately raised dividends to 10 percent in 1767 1 and further to 12 percent. The Company’s servants (English) took advantage of their position to make quick fortunes through illegal and unequal trade and forcible collection of bribes and gifts from Indian Chiefs and zamindars.
The Company’s high dividends and the fabulous wealth brought home by its officials excited the jealousy of the other sections of British society, especially the merchants kept out of the East by the monopoly of the Company. Thus, merchants worked hard to destroy the Company’s trade monopoly and in order to achieve this, they attacked the Company 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’ (a Muslim official or governor under the Mughal Empire) and were ridiculed in the press and on the stage.
They were boycotted by the aristocracy and were condemned as exploiters. The main targets were Robert Clive and Warren Hastings. By condemning the ‘nabobs’, the opponents of the company, hoped to make the company unpopular and then to displace it.
The members of Parliament were keen to benefit from the acquisition of Bengal. For this, in 1767, Parliament passed an act obliging the Company to pay to the British Treasury, 400000 British pounds per annum.
Many political thinkers and statesmen of Britain wanted to control the activities of the Company and its officials because they were afraid that the powerful Company and its rich officials would completely debauch the English nation and its politics. On the other hand, parliamentary politicians of Britain during the latter half of the 18th century were corrupt to the extreme.
The exclusive privileges of the Company were also attacked by the rising school of economists representing Free Trade Manufacturing Capitalism. In his celebrated work, The Wealth of Nations, Adam Smith, the founder of classical economics, condemned the functioning of exclusive companies
Thus, re-organisation of the relations between the British state Company’s authorities became necessary and it so happened that the company had to ask the government for a loan of 1000000 British pounds.