a) Establishment of Presidency of Madras

In 1639, they purchased the land in Madraspatanam from Raja of Chandragiri to establish Fort Saint George there.   They
established the fort there and inhabited area around it to be called St. George Town. This was their first territorial possession in
India. Fort St. George was kept as subordinate to their Bantam establishment. In 1653, it was elevated to rank of a Presidency and
thus First Presidency of British East India Company was established at Madras.

b) Establishment of Presidency of Bombay

Bombay, which was given to British by Portuguese in 1661 as a part of Dowry of Catharine Braganza to Prince Charles II of
England; was transferred to East India Company in 1665 for annual payment of 10 Pounds to Government. Meanwhile in
1664, George Oxenden, Company’s officer at Surat, had repelled an attack of Shivaji’s Maratha raiders on Surat factory. Since
Marathas were enemies of Mughals, the happy Mughals allowed the company to do custom free trade from Surat for one year. In
1667, they moved the headquarters of British India Company from Surat to Bombay. In 1669, Oxenden died and was succeeded
by Gerald Aungier as Governor of Bombay.  Gerald Aungier turned the small town island of Bombay into a promising hub for
commerce. He set up first mint in Bombay and imported first printing press to set up there. It later became seat of Presidency of
Bombay.

c) Establishment of Presidency of Bengal

The company got royal Firman to carry out trade in Bengal in 1667. They managed the trade of Bengal till 1681 from Madras but
then it was not a good arrangement. By 1685, efforts began to make Bengal an independent presidency. But then in 1686, the
factory at Kasim Bazar was confiscated by Nawab Shaista Khan. The company officers were forced to quit Hooghly and
Kasimbazar. After four more years, in 1690, they got renewed royal Firman from Mughals to trade in Bengal. But this time, the
company Officer Job Charnock established company’s fortified factory at Sutnati instead of Hooghly. This Sutnati later became the
city of Calcutta.
CHARTER OF 1661 –
           During the year 1661 Charles II issued a new charter which increased the authority of the
Company and conferred broad powers on the East India Company. This important charter
gave the Company authority over all forts and factories in the East Indies, empowered it to appoint
Governors and other officers, and authorized, the Governor and Council of a place to hear and
decide all type of civil and criminal cases and execute judgement. Including the cases of
capital offences also and it could award any kind of punishment. Including death
sentences.
            Under the Charter of 1661, the cases of Indians inhabiting in the settlement of
the company were to be decide according to English law. The powers conferred on the
company could only be exercised by the Governor the chief factor and Council were
empowered to send offenders for punishment either to a place where there was a
Governor and Council or to England. Now charter of company turn from trading into
purely territorial power acquiring new territories and administering them.
The company was given power to send out ships for war, men and ammunition, to erect
fortifications, to provide men for their defence, to govern the force by martial law, and to
make peace or war with any non-christian power.

Robert Clive set up the infamous dual system of administration in Bengal wherein the Company acquired the

real power, while the. responsibility of administration rested on the Nawab of Bengal. Under the 'dual' or

double government system, the Company got both the diwani (revenue) and nizamat (civil administration)

functions of Bengal from two different sources-diwani from the Mughal emperor Shah Alam and nizamat from

the nawab of Bengal.

As the diwan, the Company was authorised to collect revenues of the province, while through the

right to nominate the deputy subahdar it was in a position to control the nizamat or the police and

judicial powers. The deputy subahdar could not be removed without the consent of the Company.

However, at this point of time, the Company was neither willing nor able to collect the revenue

directly.

Hence, it appointed two deputy diwans for exercising diwani functions-Mohammad Reza Khan for

Bengal and Raja Sitah Roy for Bihar. Mohammad Reza Khan also functioned as deputy nizam. In this

way, the whole administration of Bengal was exercised through Indian agency, although the actual

authority rested with the Company.

Merits of the Dual Government:

Clive showed his sagacity by following the policy of decentralization in the matter of Company's administration in Bengal. By this
policy he could safely avert possible combined attack from the side of the Indian princes. He could save the British in India from the
wrath of the Indian rulers who might have taken drastic steps to oust the British from India had it been done otherwise.

By the dual system of Government in Bengal Clive could save the company from the jealousy of the other European powers like the
French, the Dutch and the Portuguese. These European powers would have withdrawn their payment of tariff to the servants of the
Company on the event of Clive's occupation of Bengal.

Clive was wise enough not to take upon the administration of Bengal directly. He knew fully well that the servants of the company
were not conversant with the languages, customs, traditions and laws prevailing among the people of Bengal.

They were merely writers in the Company's service. They would have cut a very sorry figure had they been entrusted with the
administration of Bengal in the event of Clive's occupation of the state. In addition to their ignorance of the task of administration,
their number was also too small to manage it.

Both the Board of Directors and the British Parliament were not in favour of direct administration in Bengal. Clive did not like to
insure displeasure of the home authority by taking over the administration of Bengal directly. By establishing Dual Government in
Bengal Clive showed his honour to the Board of Directors on the one hand and saved the Company from the wrath of British
parliament on the other.

The dual Government in Bengal helped the East India Company to remain free from the real responsibility of the administration of
Bengal. The English Company got power and pelf by this system of Government by successfully keeping themselves away from the
hazards of administration. For every omission and commission in the Government the Nawab of Bengal was to Bengal held
responsible.

Lastly, Clive established Dual Government in Bengal because the exigencies of time demanded it. It provided a conducive
atmosphere for the growth of British power in India under the prevailing circumstances. Any alternative would have led the
company to disaster. It was stop-gap arrangement. It was make-shift agreement which aimed at tiding over the difficulties
confronting the English in 1765.

Demerits of the Dual Government:

The Dual Government of Clive has been criticized in various ways. It led to disastrous results. The administration in Bengal almost
collapsed. Power was divorced from the responsibility. The British were in possession of power and money where as the Nawab had
neither power nor money. He had only the responsibility of running the administration. The Nawab failed to manage the
administration smoothly with a small annual grant of rupees 50 lakhs only. The company tried to improve its own lot by the revenue
it collected from Bengal, Bihar and Orissa. The Nawab could not do any work of public utility due to paucity of fund. The Nawab also
had no power to enforce law.
As a result lawlessness prevailed in most parts of Bengal. The cases of theft and rubbery increased by lips and bounds. The common
people had to suffer a lot due to want of justice. They suffered to such an extent that they preferred even to leave their home and
heart.

The condition of agriculture in Bengal gradually deteriorated under the Dual Government of Clive. The power of collection of
revenue rested in the hands of the company only. So, the Nawab could not make any provision like irrigation for the development of
agriculture in Bengal. He also failed to advance loan to the needy farmers due to shortage of fund. The great famine of 1770 was an
indirect outcome of the above difficulties.

The poor administration in Bengal led to rapid increase of private trade. The servants of the East India Company carried on trade
and commerce privately without paying any tax. A dastak was a pass–chit or permit signed by the president of the Calcutta council
which exempted the goods from payment of internal duties. The company’s servants misused these dastaks for their private trade
or sold the company’s dastaks to Indian merchants on a commission. They earned a lot of profit out of this illegal trade. But on the
other hand the merchants of Bengal suffered a lot, because they were over burdened with tax. Thus, the Dual Government dealt a
terrible blow to the local trade and commerce.

The servants of the Nawab became wayward and oppressive when they came to know that the Nawab was a great puppet in the
hands of the English company. This led to the suffering of the people of Bengal. It was another drawback of the Dual Government.

The Dual Government of Clive was further responsible for the downfall of local industries. The company's people forced the local
weavers to work exclusively for the company. Many other small local industries also were brought under the control of the company.

People failed to get proper justice under the Dual system of Government. The judges of the Nawab were influenced by British
authority, because the latter played vital role in their appointment. Thus, the judges failed to give impartial verdict which was
detrimental to the interest of the public.

The downfall of agriculture under the Dual Government ultimately led to the downfall of Company's income. The English Company
became apathetic to agriculture in Bengal which led to loss of production in the field. It ultimately resulted in decrease of revenue
collection.

Thus, the Dual Government of Clive proved to Bengal a failure. It gave rise to several complicacies in the administration of Bengal.
The absence of responsibility on the part of the company led to abuses of power and corruption.

The separation of power from responsibility led Bengal towards its ruin. The Dual Government was avowedly a device for
hoodwinking the country powers and the foreign nations whom Clive did not like to give umbrage. Though the Nawab , under this
set up, "had nothing but the name and shadow of authority, yet that name and shadow were to Bengal preserved and outwardly
venerated as a convenient mask which it would Bengal dangerous to throw off."

Reasons behind subsidiary alliance

 The Subsidiary Alliance system was used by Wellesley to bring Indian states within the orbit of British power.

The system served the double purpose of asserting British supremacy in India and at the same time of saving India from the menace
of Napoleon. The system played a very important part in the expansion of the company's dominions and many new territories were
added to the company's possession. The Subsidiary Alliance also helped the Company to effectively counteract any possible French moves in
India. Being the ally of the Indian states the Company asked the native princes to dismiss the French official from the Court. He gave up the
policy of peace and non-intervention and adopted a forward policy where he would take active part in invasion and annexation and force all the
Indian states to a position of dependence on the company.

Mahalwari system

I. . Mahalwari System

In 1833, the Mahalwari System was introduced under Wlliam Bentinck . This was basically a modified form of
the zamindari system/settlement introduced in the Ganga valley, Punjab, North-west Frontier Province, parts of
Central India.

 Under this system, a basic unit of revenue settlement was ‘Mahal’ or ‘Village’.
 The village land belonged jointly to the village community, they were responsible for payment of
revenue.
 Entire land of ‘Mahal’ was measured at the time of fixing the revenue.
 There were also known as Bhaichare, or Mahals, which were basically groups of villages.
  Everyone was thus liable for the others’ arrears.
 Farmers had right to sell or mortgage their property.
 The village community did not necessarily mean entire village population. It was a group of elders,
notables of high castes.
 A village inhabitant, called the lambardar, collected the amounts and gave to the British
 British periodically revised tax rates.

Some issues
1. In actual practice, only some big families could take the land rights not all villagers.
2. The stable revenue dream of the government could not be fulfilled.
3. Mahalwari was a limited reform in area as well as duration. It was a temporary settlement.
Consequences

1. Since Punjab, Northern India = fertile land. So British wanted to extract maximum Revenue out of this region. Land

Revenue was usually 50% to 75% of the produce.

2. As generations passed- fathers would divide land among sons=> fragmentation=>farms became smaller and smaller

and productivity declined.

3. But still British demanded Revenue in cash. So, farmers had to borrow money to pay taxes in the case of crop failures.

As a result, more and more farms passed into the hands of moneylenders. When farmer failed to repay debt,

Moneylender would take away his farm but he has no interest in self-cultivation so he’d leasing it to another farmer.

4. Thus, sub-leasing, indebtedness and landlessness became more and more common in Mahalwari region

Ryotwari System

By Sir Thomas Munro at first in Madras State and then adopted in Bombay, and Assam. But Why?

1. In permanent settlement areas, land Revenue was fixed. But over the years, agriculture prices/exports should
increase but government’s income did not increase. (Because middlemen-zamindars chowed it down)
2. Zamindars were oppressive- leading to frequent agrarian revolts in the permanent settlement areas.
3. In Bihar, Bengal, there existed Zamindar/feudal lords since the times of Mughal administration. But Madras,
Bombay, Assam did not have Zamindars / feudal lords with large estates. So, hard to ‘outsource’ work, even if
British wanted.
4. No middlemen in tax collection=> farmer has to pay less taxes=>increased purchasing power=>will improve
demand for readymade British products in India.

Consequently, all subsequent land tax or revenue settlements made by the colonial rulers were temporary

settlements made directly with the peasant, or ‘ryot’ (e.g., the ryotwari settlements).

This model was based on English yeomen farmers.

Ryotwari system features

1. government claimed the property rights to all the land, but allotted it to the cultivators

on the condition that they pay taxes. In other words, It established a direct relation

between the landholder and the government.

2. Farmers could use, sell, mortgage, bequeath, and lease the land as long as they paid

their taxes. In other words Ryotwari system gave a proprietary rights upon the

landholders.

3. IF they did not pay taxes, they were evicted

4. taxes were only fixed in a temporary settlement for a period of thirty years and then

revised.

5. government had retained the right to enhance land revenue whenever it wanted.

6. Provided measures for revenue relief during famines but they were seldom applied in

real life situation.

Ryotwari System: Consequences

1. Farmers had to pay revenue even during drought and famines, else he would be

evicted.

2. Replacement of large number of zamindars by one giant zamindar called East

India Company.

3. Although ryotwari system aimed for direct Revenue settlement between farmer

and the government but over the years, landlordism and tenancy became

widespread. Because textile weavers were unemployed= they started working

as tenant farmers for other rich farmers. In many districts, more than 2/3 of

farmland was leased.

4. Since Government insisted on cash revenue, farmers resorted to growing cash

crops instead of food crops. And cash crop needed more inputs=>more loans

and indebtedness.

5. After end of American civil war, cotton export declined but government didn’t

reduce the revenue. As a result most farmers defaulted on loans and land was

transferred from farmers to moneylenders.