Structure of British Administration pre 1857

From Traders to Rulers

After the Battles of Plassey (1757) and Buxar (1764), the English East India Company wasn’t just a trading corporation anymore — it had become both a commercial giant and a military power in Bengal.

But power brings responsibility — or at least, the need to organise that power. To rule millions of people, the Company couldn’t rely only on merchant logic. It needed an administrative structure.

At first, it didn’t reinvent the wheel. It simply borrowed from pre-colonial institutions — Mughal-era offices, revenue systems, and judicial customs — and made small, temporary changes (ad hoc adjustments). Over time, this would evolve into a fully restructured colonial government.

The Dual System of Government (1765–1772)

When the Company obtained the Diwani rights in 1765 (the right to collect revenue in Bengal, Bihar, and Orissa), it didn’t want to get its hands dirty with direct administration. Its main goal was simple:

• Keep trade running.
• Collect taxes.
• Remit profits to England.

So, it allowed Indian officials to run daily governance as before, but always under British supervision — particularly the Governor and Company officials.

On paper, this “Dual Government” looked neat: Indians handled administration, the British oversaw it.
In practice, it was a disaster:

• It was unjust and corrupt.
• The Company’s shareholders (Proprietors) rewarded themselves — in 1767, dividends were raised to 10%.
• Company servants became rich overnight. Robert Clive, for example, returned to England at age 34 with property yielding £40,000 per year — an astronomical sum at the time.
• The Indian economy, however, suffered.

Company’s Servants as Administrators (Post-1772)

By 1772, it became obvious that indirect rule wasn’t working for British interests. Warren Hastings, then Governor, abolished the Dual System and brought all administrative powers directly under the Company.

But here’s the problem:

• The same trading clerks who once bought and sold goods were now supposed to run a territorial government.
• They treated administration like another business opportunity — engaging in illegal private trade, taking bribes and gifts from rajas and nawabs, extorting artisans and merchants, and exploiting weavers and zamindars.
• Result? The officials grew richer, but the Company itself slid into bankruptcy.

This is a classic colonial irony — the rulers bled both the colony and their own institution dry.

British Government Tightens Control

By now, Parliament in Britain had realised two things:

1. The Company couldn’t be trusted to manage political power responsibly.
2. India was too far for London to micromanage daily governance.

So, starting with the Regulating Act of 1773, a dual-control system was established:

• London would set the big policies.
• India would have a central authority — the Governor-General in Council — to run things on the ground.

Governor-General Becomes the Real Ruler

The Governor-General was empowered to overrule his Council on important matters, making him the de facto head of British India, though still answerable to Britain.

The three main centres of authority became:

1. Court of Directors (Company’s executive body in London).
2. Board of Control (British Government’s supervisory body).
3. Governor-General (supreme authority in India).

Notably, no Indian had any role in any of these decision-making bodies. The governance of India was entirely foreign-controlled — both in ideas and in execution.

So, this is where the story takes a very important turn in the history of British rule in India.
The Regulating Act of 1773 marks the first formal intervention of the British Parliament in the East India Company’s affairs — and from here onward, India’s governance steadily shifted from corporate control to state control. Let’s look at it in detail:

Regulating Act of 1773

Background and Purpose

By 1773, the Company’s governance in India had proved corrupt, inefficient, and financially unstable. Parliament could no longer ignore it because:

• India had become a vast territorial empire under the Company’s control.
• British merchants, politicians, and public opinion were demanding reform.
• The Company itself was on the verge of bankruptcy.

Thus, Parliament decided to “regulate” the Company — not abolish it, but bring it under legal and political oversight.

Key Provisions of the Regulating Act

A. Reform in the Court of Directors

• Earlier: All directors were elected annually — this encouraged short-term thinking.
• Now:
  • 24 members to be elected for 4 years.
  • 6 directors would retire each year to ensure continuity.
• Directors were now under supervision of the British Government.
• Mandatory reporting: The Directors had to send all communications regarding civil, military, and revenue matters of Bengal to the British Government.

B. Creation of the Governor-General of Bengal

• Earlier: Bengal, Bombay, and Madras were equal presidencies, each independent.
• Now: The Governor of Bengal was upgraded to Governor-General of Bengal — making him the senior-most authority in India.
• Warren Hastings became the last Governor of Bengal (1772–73) and the first Governor-General of Bengal (1773–85).

C. Governor-General in Council

• A Council of four members would assist the Governor-General.
• Decisions by majority vote; Governor-General had only a casting vote in case of a tie.
• Powers included:
  1. Civil and military administration of Bengal.
  2. Control over Madras and Bombay in matters of war and peace.
• Limitation: Governor-General had no veto power.

D. Subordination of Madras and Bombay

• Madras and Bombay Governors were now subordinate to the Governor-General in political matters.
• They had to regularly report their revenues and activities to him.
• Significance: Before 1773, all three presidencies were independent, so this was the first step toward centralised administration.

E. Judicial Reform — Supreme Court at Calcutta

• Established at Calcutta with 1 Chief Justice and 3 judges.
• Jurisdiction:
  • Europeans, Company employees, and citizens of Calcutta.
  • Designed to enforce British law in India’s main administrative centre.

Effects of the Regulating Act

• Foundation of Central Administration in India — for the first time, Madras and Bombay came under Bengal’s political leadership.
• Introduced a system of Parliamentary control over the Company.
• Recognised that the Company was now a political and administrative power, not just a commercial body.
• Introduced checks and balances:
  • Governors subordinate to Governor-General.
  • Governor-General dependent on his Council.
  • Supreme Court checking the Governor-General in Council.

Defects and Weaknesses

• Council domination: The Governor-General could be overruled by three councillors acting together, creating frequent deadlocks.
• Ineffective control over Madras & Bombay: In practice, communication delays and political rivalries meant the Governor-General’s authority was not absolute.
• Weak British supervision: The British Government’s oversight was more theoretical than practical, given the distance and slow communication.

UPSC Perspective

This Act is important because it:

1. Marks the first link between Indian administration and British Parliament.
2. Is the starting point of centralisation in Indian governance.
3. Demonstrates early tension between executive and council, a theme that continues in later reforms.

Now we move into the next big stage of British control in India, where the East India Company stops being a free-acting corporate power and becomes a junior partner under the British Government’s tight supervision.
The key player here is Pitt’s India Act of 1784, which you can think of as “the final leash” on the Company.

Pitt’s India Act (1784)

Named after William Pitt the Younger, the British Prime Minister, this Act firmly established Parliamentary supremacy over the Company’s administration in India.

Creation of the Board of Control

• 6 members in total, including 2 Cabinet Ministers.
• Purpose:
  • To guide and control the Court of Directors.
  • To oversee civil, military, and revenue affairs of India.
• Direct Orders: In urgent matters, the Board could send orders directly to India via a Secret Committee of Directors.

Change in Governor-General’s Council

• Reduced from 4 members to 3.
• One of them had to be the Commander-in-Chief of the army.
• Effect: The Governor-General could gain a majority if just one other member sided with him.

Subordination to the British Government

• Governor-General and Council were forbidden from:
  • Declaring war.
  • Entering treaties.
    … without prior approval from the Court of Directors or the Secret Committee.
• From here onwards, Company’s territories were called “British possessions”.
• This framework lasted until 1857, though later laws kept cutting down the Company’s powers.

Amending Act of 1786

• Gave the Governor-General power to overrule his Council in important matters affecting:
  • Peace (tranquillity),
  • Safety, or
  • The interests of the British Empire in India.
• Merged the offices of Governor-General and Commander-in-Chief into one person.
• Background: Lord Cornwallis, appointed in 1786, demanded both powers — and got them.

Declaratory Act of 1788

• Gave full powers and supremacy to the Board of Control.
• A clear move toward eventual Crown takeover.

Charter Act of 1813

This is important because it:

1. Renewed Company’s Charter for 20 more years, but officially recognised British Crown sovereignty over Indian territories.
2. Ordered separate accounting for:
   • Territorial revenue (from governing).
   • Commercial revenue (from trade).
3. Allowed local governments in India to levy taxes on individuals.
4. Abolished Company’s trade monopoly in India:
   • Trade with India now open to all British subjects.
   • But tea, opium, and trade with China remained exclusive to the Company.
5. Education Provision:
   • Required the Governor-General to allocate ₹1 lakh annually for education.
   • Opened the door for Christian missionaries to operate freely in religious and educational work.

Charter Act of 1833

This Act is a milestone because it:

• Centralised legislative power in India.
• Ended the Company’s trading functions completely.
• Marked the Company’s transformation into purely an administrative body.

Governor-General of India

• The Governor-General of Bengal was redesignated Governor-General of India.
• Lord William Bentinck: Last Governor-General of Bengal (1828–33) → First Governor-General of India (1833–35).

Governor-General in Council

• Council expanded to 4 members (Pitt’s Act 1784 had reduced it to 3).
• The new member was the Law Member — to aid in legislative drafting and law reform.
  • Lord Macaulay was the first Law Member (1834–38) and had lasting influence on education policy and legal codification.
• Legislative centralisation:
  • Governor-General in Council given full legislative power for all British territories in India.
  • Governors of Bombay and Madras lost their legislative powers.

Law Commission

• Governor-General empowered to appoint a Law Commission for codifying laws.
• First Law Commission (1834) headed by Macaulay — produced the Indian Penal Code draft.

Civil Service

• The Act declared no Indian should be disqualified from Company service on grounds of religion, birth, or descent.
  ⚠️ In practice: This was empty rhetoric — Indians still excluded from high posts.

Trade

• Ended Company’s monopoly in tea and China trade.
• Company now had only political functions, ending its role as a commercial body.

Slavery

• Instructed Government to work towards abolition.
  • 1807 – Britain outlawed slave trade.
  • 1833 – Britain passed Abolition of Slavery Act (gradual end in colonies).
  • 1843 – Slavery abolished in India.

Other Provisions

• Presidency Councils reduced to 2 members.
• Company’s Indian possessions to be held in trust for the British Crown.
• India to bear Company’s debts; shareholders guaranteed 10.5% annual dividend.

Charter Act of 1853

This is the last Charter Act before the Crown takeover in 1858, and it’s significant because it:

• Separated legislative and executive functions.
• Opened the door for competitive civil service exams.

Political Context

• Rising Indian political consciousness:
  • Raja Rammohan Roy went to Britain to present India’s case.
  • Bombay Association and Madras Native Association sent petitions.
• British political establishment resisted major Indian demands, but Indian lobbying influenced the Act’s reforms.

Legislative Council Reforms

• Separation of functions: Legislative work treated as a special, separate function.
• Legislative Council to have 12 members:
  • Governor-General of India
  • Commander-in-Chief
  • 4 members of Governor-General’s Executive Council
  • 6 legislative members, including 4 representatives from local governments (Bombay, Bengal, Madras, North-Western Provinces).
• Governor-General’s consent required for all laws.
• ⚠️ No Indian representation.

Civil Service Reform

• Open competition for covenanted civil services introduced.
• Committee on Indian Civil Service headed by Macaulay set exam framework.
• Indians in theory could enter service — in practice, restrictive conditions still kept most out.

Other Provisions

• Law Member became full member of the Executive Council.
• Court of Directors reduced from 24 to 18; 6 nominated by the Crown.
• Reflected continued criticism of:
  • Company’s monopoly (already ended).
  • Directors’ control over appointments.

Summary

• 1833 Act → Ended Company’s trade role, centralised legislation.
• 1853 Act → Brought open competition to civil services, separated legislation from administration.
• Both Acts = Key to understanding how colonial governance became highly centralised and controlled from London.

Next, we shift from constitutional changes in London to the practical machinery of governance in India.
The next section is about how the East India Company, after winning political power, built an administrative system in India that was designed not for public welfare, but for profit and control.