The English East India Company was now the ruler of a large empire, composed of millions of people. During their one hundred year rule, they made frequent changes to their administrative set up. The main objective throughout their period was to ensure that the company maintained and strengthened its hold on India, and to increase the profits it made. All policies were made keeping these factors in mind. The entire administrative machinery was designed to ensure the smooth functioning of trade, law and order was given special importance, for if there was stability the exploitation of the Indian resources could take place more effectively. The English East India Company's first major administrative area was Bengal, in which initially they implemented the dual system of government. Under this system the puppet nawab was saddled with the responsibilities and no power, while the English East India Company took all the power without any responsibility. This system proved disastrous for Bengal, for neither side was concerned for the welfare of the people. The Nawab could not assist his people even if he wanted to, for all the state's resources were controlled by the English East India Company. The English East India Company on its part, was more concerned with maximizing its profits then anything else. As a result when a terrible famine struck the state, thousands of people died without receiving any aid. Finally in 1772, the company ended the Dual system
of government and began to directly administer the state. This step did little for the people, for essentially the English East India Company was a commercial company keen on profits, and not a welfare organization. However, with the English East India Company rising to such heights of power, considerable interest began to build up back in Britain. The English East India Company not only had the complete monopoly over trade in the east, they also controlled an economically important region. Rival trading companies wished to enter the region, as did manufacturers keen to flood the market with their goods. The British government was also keen to tap into the considerable wealth of India, to further develop the British economy. Soon such forces began questioning the company's rule and its policies. The English East India Company was after all a trading company headquartered in Britain, that was holding political power over millions of people in a foreign country. Important issues on what the relation between the British government and the English East India Company should be came up. In 1767 the British parliament passed a law which required the English East India Company to pay an annual tribute of 470,000 thousands a year to the government of Britain. Meanwhile due to the corruption of its employees the English East India Company began making substantial losses and soon requested the government for a loan. The British parliament used this situation to negotiate greater power in the administration of India. A debate began as to what extent the British government could control the affairs of the English East India Company. The English East India Company had powerful contacts in the British government, the most notable being the king, George III. The parliament would then pass a series of Regulating acts, which eventually suited both sides. The English East India Company's basic policies would be directed by the British government but otherwise the company was free to appoint and dismiss its employees in India. The British government appointed a Board of Control, comprising of six members, two of which were Cabinet ministers. The actual governing of India was placed in the hands of a Governor General, and a council of three (representing the three main regions of the English East India Company, Bombay, Madras and Calcutta). The solution was mutually acceptable, the British government got their say while the English East India Company retained its monopoly of trade and still ran the Government of India. Over time the power of the English East India Company would steadily be diminished by the British parliament, in 1813 the monopoly over their trade was ended and the country was thrown open to any British trading company. The Governor-General became more and more powerful , and the British government began wielding more control over him.
The system of government was designed to ensure that the British nation benefited substantially from the colonization of India, to the extent that they ensured that even the cost of the conquest of India, was billed to the Indians (in the form of higher taxes etc.
Revenue collection was an important part of the administration, and hence the English East India Company from fairly early on began implementing a revenue policy. Land revenue remained the primary source of income for the state. The English East India Company after some initial experiments implemented the following land revenue policies.
The Permanent Settlement
This system was introduced in 1793 by Lord Cornwallis. Under this system the English East India Company would fix a certain sum of money to be paid every year as tax on the land a landlord owned. It would then be up to the landlord to ensure that he was able to make the required some of money from his land in order to fulfil the demands of the English East India Company, which were rigidly collected on a fixed day. If a landlord was unable to pay, his land was usually taken away from him and auctioned off. The entire system was implemented in a very ad hoc manner, and the revenue demands of the English East India Company were unrealistically high, often touching ten eleventh (10/11th) of the produce. The English East India Company also failed to understand the social factors involved in the land revenue system and the entire concept of the relation between the landlord and the tenant. Their system disrupted the age old social structure between the land lord and the peasants. Often the older landlords would lose their lands when they were unable to pay the tax, and their lands would be taken over by a new set of people, usually people like the moneylenders. These new landlords would not have the sort of rapport the earlier landlords had with the peasants, and their primary concern was to maximize revenue collection. For the English East India Company would fix a certain sum of money at one time, and if the landlord was somehow able to increase his production, then he was allowed to keep the surplus. This encouraged the exploitation of the peasants by the landlords as they tried to maximize their own profits. The Ryotwari Settlement
The permanent settlement worked fine in North India, but it was not possible to implement such a system in South India. Unlike the North, the South did not have the concept of large landlords and attempting to create that concept would cause havoc. Hence the English East India Company formulated a new policy, one in which they dealt with the cultivator directly. The cultivator was guaranteed ownership of his land, provided he paid the annual tax. Unlike in the above system, the rate was not fixed and was revised every twenty to thirty years. The tax rate for this system was also unrealistically high, and this caused the peasant much hardship. Also the peasant was hardly an independent owner of the land, for his ownership depended on his ability to pay the tax on the due date. Hence the money he was paying as tax, was more of a rent that allowed him to retain ownership of his land
The British land revenue system brought some fundamental changes to the Indian society. The concept of private property began to take shape and became like a commodity which could be freely bought, sold or mortgaged. This was in contrast with the earlier set up where usually a village collectively owned the land around it. This began to disturb the already delicate framework of Indian society.
To their credit the English East India Company did implement some positive changes. They implemented a judicial system which for the first time brought in an organized system of justice to India. Various provincial and central courts were set up, with varying degrees of power. There was a fixed set of laws so there was uniformity amongst the various courts. The concept was developed further and soon many cities had High Courts with a codified set of laws. Indians were allowed to become judges, but their powers over British citizens were restricted.
ax rate for this system was also unrealistically high, and this caused the peasant much hardship. Also the peasant was hardly an independent owner of the land, for his ownership depended on his ability to pay the tax on the due date. Hence the money he was paying as tax, was more of a rent that allowed him to retain ownership of his land The British land revenue system brought some fundamental changes to the Indian society. The concept of private property began to take shape and became like a commodity which could be freely bought, sold or mortgaged. This was in contrast with the earlier set up where usually a village collectively owned the land around it. This began to disturb the already delicate framework of Indian society.
To their credit the English East India Company did implement some positive changes. They implemented a judicial system which for the first time brought in an organized system of justice to India. Various provincial and central courts were set up, with varying degrees of power. There was a fixed set of laws so there was uniformity amongst the various courts. The concept was developed further and soon many cities had High Courts with a codified set of laws. Indians were allowed to become judges, but their powers over British citizens were restricted.
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