Administration under British East India Company

IAS Notes November 04, 2022

Administration under East India Company


By 1780s there were three presidencies in India. These were -

  1. Bengal Presidency
  2. Bombay Presidency
  3. Madras Presidency
All the three presidencies were autonomous and were like a full-fledge company under East India Company (EIC). None of the presidency intervene in the affairs of each other. All the three presidencies reported to 24 Court of directors in Britain. These Court of directors were appointed annually by the shareholders of the company.

By 1772, the company applied for 1 million pound loan to British parliament as the company was on the verge of bankruptcy.

In 1765, Robert Clive initiated dual government in Bengal whereby diwani right was in the hand of company and the territorial jurisdiction, i.e., nizamat right was in the hand of puppet Nawab of Bengal. This led to the double exploitation of the common public. Moreover, the great famine of 1770s brought more hardship in the life of people of Bengal.

A secret committee reported to the parliament that the company official has amassed huge wealth for themselves as if they are the Nawabs of London. Due to their corruption, company was on the verge of bankruptcy.

In this situation, British parliament did not want to remain as mute spectator and as soon the company applied for the load, parliament got rights to check the accounts of the company and further regulate its affairs in India.

This led to the series of acts passed by the British parliament to regulate the affairs of EIC.

british administration in india



★   Regulating Act of 1773 
  1. The president of the company's Calcutta factory was also made the Governor General of all the company's territory of India.
  2. An executive council of 4 members was created to assist the Governor General and every decision to be taken must pass through majority vote of the council.
  3. It also made Bombay and Madras presidencies sub-ordinate to Bengal.
  4. The act also provided for the establishment of a Supreme Court at Calcutta by 1774.
  5. The Supreme Court will comprise of 1 chief justice and 3 other judges. Elizah Impey was the 1st Chief justice of the Supreme Court.
  6. The act prohibited the servants of the company to indulge in any private jobs or accepting any present or gifts from the natives.
  7. The act required every official on his return home to give a statement of his properties and how they were acquired.

Criticism of Regulating Act of 1773 -
  • The Governor General was rendered powerless in his council. Most of the time the councilors did not support the Governor General and often there was policy paralysis in the council.
  • There was nothing in the act about the people of India.
  • There was no clear demarcation between the powers and jurisdiction of the Supreme Court and the Governor General.
  • The parliament's control over the company was not very effective.


★   Pitts India Act of 1784 
  1. This act set up 'Board of Control' in Britain, which is fully appointed by the British parliament. Thus, British government could fully control the company's civil, military and revenue affairs in India.
  2. It clearly distinguished between the commercial and political functions of the company.
  3. With this act the joint rule of EIC and the British Parliament started.
  4. For the first time company's territory in India was called as 'British possession in India'.
  5. With the arrival of Cornwallis in 1785, he was given the power to over rule his council on important matters. He was also made commander-in-chief of all the British Indian troops.
  6. One of the provision of the Pitts India act was to forbit the policy of conquest and non-interference in the internal affairs of the native ruler but it was seldom observed.


★   Charter Act of 1793 
  1. It extended company's exclusive privilege of trade for the further period of 20 years.
  2. The over riding power given to the Cornwallis was further extended to all the Governor Generals.
  3. The act provided for governance based on written laws in palace of personal rule of the native rulers.
  4. It also required that all the laws relating to the rights of persons and their property be printed with translation in Indian languages so that people can know about their rights and immunities.
  5. The salaries of Governor General and his council were to be paid out of Indian revenue and not from the British exchequer.


★   Charter Act of 1813 

Background of Charter Act of 1813 
  • By 1800, the rise of Napoleon Bonaparte brought hard days to the business man of England.
  • Napoleon Bonaparte initiated continental system in Europe and he had put in place the 'Decree of Berlin' and 'Decree of Milan' in 1806 and 1807 respectively, which forbade the imports of British goods into the European countries aligned with France.
  • Also, Industrial revolution had picked up in England and they wanted a market for their goods also the free trade theory of Adam Smith became so popular at that time.
  • All these led to to the British traders demanding entry into India and Asia. 
  • They also demanded to dissolve the monopoly of British EIC.
  • In this background the Charter Act of 1813 was enacted.
Provisions of the Act 
  1. The act renewed the company's charter for the next 20 years but it ended the company's monopoly of trade in India except tea trade and trade with China.
  2. It allowed the Christian Missionaries to go to India and promote religious and moral education.
  3. The act provided for an annual fund of ₹1 Lakh for the promotion of literature and sciences among the Indian subjects.


★   Charter Act of 1833 
  1. All the trade privileges of the company was abolished and the company was asked to wind up its commercial business as soon as possible (not the political and administrative function).
  2. The act lifted the legal barrier of colonialisation of India. (It means who ever from Britain that wanted to come to India can settle in India).
  3. The act also led to the establishment of Indian law commission for the codification of Indian penal code, civil procedure law and criminal procedure law. Lord Macaulay was the chairman of law commission.
  4. A law member was added to the Governor General's council and his work was fully legislative. Lord Macaulay was the 1st law member in the Governor General's council.
  5. Section 87 of the act provided for the education and employment of Indians in public services. It prohibited discrimination on the basis of Caste, religion, place of birth and decent in the matters of public employment.
  6. The act also proposed to create a new presidency of Agra (but before the creation of Agra Presidency, the revolt of 1857 happened and the presidency concept gone).
  7. The Governor General of Bengal became the Governor General of India. Lord William Bentick was the 1st Governor General of India. He had all the financial and administrative powers in his hands. He could repeal, amend or alter any law or regulation. However, the court of directors acing under the Board of Control can veto any law made by the Governor General and his council.
  8. The act also called for the upliftment of slaves in India and also pay attention to the laws of marriage and rights and authorities of heads of families while drafting any law.
  9. By the Charter Act of 1833, the laws made previous to this Act were called Regulations, and laws made by the Act of 1833 were called Acts.

Significance of the Charter Act of 1833 
It was a watershed moment for many reasons -
  • The elevation of Governor General of Bengal as Governor General of India was a step towards the consolidation and centralisation of Indian administration.
  • This act brings the end of EIC as a commercial body (and provides indication that in future British parliament might overtake the authority from EIC).
  • It was the first act which made provision to freely admit Indians into administration (through public services).
  • For the first time, separate the legislative function from the executive function by the appointment of a legislative member.


★   Charter Act of 1853 
  1. This act did not fix any time limit for the continuation of administration of company in India.
  2. A separate Governor General legislative council was created with 6 new members. (It marks the beginning of Parliamentary system in India)
  3. It introduced an Open system of examination and recruitment of Civil Servants. The covenanted Civil Services was not thrown open to Indians. In this regard Macaulay Committee was appointed in 1854. Satendra Nath Tagore was the 1st Indian to qualify this exam in 1863.
  4. The act also led to reduction in the numbers of directors from 24 to 18 out of which 6 to be appointed by the British crown.
  5. It introduced for the 1st time local representation in the Indian legislative council. (Here, local representation did not mean Indians to be included in the council. It means British officers who were working in company in India for 10 years would be eligible to be nominated to the council).
  6. Out of the 6 legislative members, 4 to be appointed by the local government of Bengal, Bombay, Madras and Agra.

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Note - This is my Vision IAS Notes (Vision IAS Class Notes) and Ashutosh Pandey Sir's Public Administration Class notes. I've also added some of the information on my own. 

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