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(Sample Material) UPSC IAS Mains History (Optional) Study Kit "Administration & Economy under the company rule"

Sample Material of Our IAS Mains History Study Kit

Subject: History (Optional)

Topic: Administration & Economy under the company rule (1757-1857)

Fundamentally the British East India Company remained a trading concern from 1600 to 1757. It became successful in gaining monopoly over trade in India by adopting all means to appease the British Government and its influential class. Lord Clive, during his second term as Governor, established Dyarchy in Bengal in 1765. This system of administration continued there for the next 7 years. Dyarchy was terminated in 1772. After that some Acts were passed by the Britishers as per their requirement to administer India. Some important Acta are as following:-

Regulating Act of 1773

The British Parliament passed the Regulating Act in 1773 by which changes were introduced in the administrative structure of the Company both in England and in India. In England only those shareholders were allowed to vote, who possessed a share of 1000 pounds at least a year before the election. The Directors of the Company were also required to place before the British Government all their correspondence from India dealing with revenues and military administration. In India the Governor of Bengal came to be designated as the Governor General. A Council comprising of four members, wherein decisions were to be taken on the basis of majority votes, was constituted to assist the Governor-General. As per the provision of the Act, a Supreme Court was established at Calcutta comprising of a Chief Justice and three other judges. The Court was given the powers of adjudication over the Europeans, all persons in the Company’s service and the citizens of Calcutta. Soon, the demerits of the Regulating Act also started coming to the fore. The position of the Governor-General became tenuous due to the provision of majority vote in the Governor-General’s Council.

Pitt’s India Act of 1784

The Pitt’s India Act was passed in 1784 in order to remove the above demerits of the Regulating Act. The new Act established the control of the British Government over the Company and all its affairs in India. A Board of Control consisting of six members was set up by the British Parliament to look after all civil, military and ‘revenue affairs of the Company baring only its trading activities. Besides a secret community of three Directors was also set up which would send important orders to India directly. In India, the number of members in the Governor-General’s Council was reduced from four to three.

The Charter Act of 1793

Lord Clive was the first to pay attention to the Civil Services. He prohibited the employees of the Company from undertaking any private trade or accept any gift and also asked them to sign an agreement with regard to their service. Since then the word ‘Covenanted Services’ came into use. Lord Cornwallis used to detest Indians, regard everyone of them as corrupt, and therefore was not ready to appoint any Indian to a higher post. He Europeanised the Government Services. He took steps to check corruption among the Company employees and introduce ban on their accepting bribes or gifts and carrying out private trade. The highest rank that an Indian could aspire to go was that of a Subedar in the army and Munif, Sadar Amin or Deputy Collector in the Civil Services.

The credit for introducing the first steps towards training of the Company’s Civil Servants to improve their efficiency went to Lord Wellesley, for which he founded the Fort William College at Calcutta on 24 November, 1800. The Company on the other hand, established in 1806 its own training College at Haileybury in England in the name of East India College.

The Charter Act of 1813

According to the Charter Act of 1813, nobody in India could be appointed as a clerk without obtaining a satisfactory certificate from a recognised institution. The monopolistic right of the British company was abolished, except the trade with China and the Tea trade.

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The Charter Act of 1833

It made the Governor- General of Bengal as the Governor –General of India, and Lord William Bentic was the first Governor-General of India. The Charter Act of 1833 by its clause 87 for the first time accepted educational qualification as the sole basis for appointment in Civil Services. For the implementation of this clause, a Committee was constituted under the Chairmanship of Lord Macaulay in 1834, which adopted in principle the system of a competitive examination for the recruitment of Civil Servants, the minimum age for which was fixed at 18 years. The Charter Act of 1833 delegated the power of framing laws to the Governor-General in Council. Trading rights of the company were completely terminated, including the Tea trade & the trade with China. However, term of the company was extended for another 20 years.

The Charter Act of 1853

The legislative and executive functions of the Governor-General’s council were separated. It introduced a system of open competition as the basis for the recruitment of civil servants of the Company. In 1853, Charles Wood became the Chairman of the Board of Control. Consequently, by the Charter Act of 1853, Indians were allowed entry into the Civil Services through a system of open competitive examinations. But the minimum age prescribed for this competitive examination was raised to 23 and its centre was kept in England while the medium of examination was made English.

Economic & Commercial Policy

The British conquerors were entirely different from the previous conquerors. Through laws and administrative, economic and fiscal policies, the British government in England and Company’s administration in India used their powers to the advantage of British manufacturers and to the detriment of the Indian socio-political and economic fabric. The gradual “development of underdevelopment’ has been traced through the three stages of British Colonialism by R. R Dutta in his classic work “India Today”.

Phases of Economic Policy in India

1600-1757: The East India Company was a purely trading company dealing with import of goods and precious metals into India and export of spices and textiles.

1757 - 1813 (The Mercantilist Phase)

The East India Company monopolized trade and began direct plunder of India’s wealth. They could impose their own prices that had no relation to the costs of production. This was the phase of buccaneering capitalism whereby wealth flowed out of the barrel of the trader’s guns. The company used its political power to monopolize trade & dictate terms to the weavers of Bengal. The company used revenue of Bengal to finance exports oi Indian goods.

1813-1858 (The Industrial Phase)

The commercial policy of the East India Company after 1813 was guided by the needs of the British industry. The British mercantile industrial capitalist class exploited India as Industrial Revolution in Britain completely transformed Britain’s economy. Charter Act of 1813 allowed one way free trade for British citizens resulting in Indian markets flooded with cheap & machine made imports. Indians lost not only their foreign markets hut their markets in India too. India was now forced to export raw materials consisting of raw cotton jute and silk, oilseeds, wheal, indigo and lea, and import finished products. Indian products had to compete with British products with heavy import duties on entry into Britain.