ADMINISTRATIVE &

ECONOMIC POLICIES OF
BRITISH RULE
 ADMINISTRATIVE REFORMS
• The affluence of English East India company after the plassey plunder evoked a
strong desire amongst minsters of the british government to bring it under state
control. In 1767, parliament passed an act obligating the company to pay to British
treasury 4,00,000 pounds per year
• A series of administrative reforms were introduced 1773l.coonwards
m which aimed to
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bring the English East India company directly under gthe m a control of British
government. l a @
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• The Regulating Act of 1773: this act made changes av
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of Directors of the Company and subjected ly f
or their actions to the supervision of
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British government. However, the regulating act soon broke down in practice.
• Pitt’s India regulating Act of 1784: the act gave the british government supreme
control over the company’s affair and its administration in India.
• It established a Board of Governor consisting of six commissioners, including two cabinet
commissioners. Who would oversee the civil, military and revenue affairs of the
company.
• The act placed the government of India in the hands of Governor-General & a council of
three. It also clearly subordinated the Bombay and Madras presidency to Bengal in all
questions of war and diplomacy.
While the Pitts India Act laid down the general framework in which the GoI was
to be carried out till 1857, later enactments brought several changes which
gradually diminished the power of the company.
The Charter Act of 1813: the company’s monopoly over trade in India was
ended and trade with India was thrown open to all British subjects.
• But trade in tea and trade with China were still exclusive to the company.
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• The government of India continued to be run by themacompany il.c under strict control
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of Board. The company was to retain the possession ala
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for twenty years more without prejudice to the lkh
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The Charter Act of 1833: the company’sfomonopoly av on trade with China also
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ended. l y
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• The lease for company was extended for 20 more years & territories of India
were to be governed in the name of crown.
The Charter Act of 1853: the company was to continue the possession of
territories. However, the company’s patronage over the services was
completely dissolved & services were thrown open to a competitive exam.
BRITISH ECONOMIC POLICIES IN
INDIA: 1757-1857
1. Colonial trade policies
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2. The expansion of railways & communication
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3. Colonial land policies: PermanentlkhSettlement,
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 COLONIAL TRADE POLICIES
• Commercial policies from 1600-1757: East India Company’s role in
India was that of a trading corporation which brought goods/precious
metals into India and exchanged them for Indian goods like textiles &
spices which it sold abroad. il.c
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• The British manufacturers put pressure onjuwtheir a government to impose
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tariff barriers on sale of Indian goods nin
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• 1757 & the qualitative shift in the Company’s trading pattern: after the
battle of Plassey, the company used its political control over Bengal
to acquire monopolistic control over Indian trade and production.
Moreover, it utilized the revenue of Bengal to finance its export of
Indian goods.
Industrial revolution in Britain & the rise of Lancashire manufacturers: the
rise of domestic manufacturers in England forced the company by law in 1769 to
export british manufactured goods of 3,80,000 every year, though it suffered a loss
on transaction.
• Imposed a one-sided free trade on India & from an exporter of finished goods,
it was reduced to the status of a raw material supplying il . co colony and a market
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for english manufactured goods a @
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Economic drain of wealth- the British lexported
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or to Britain a part of India’s
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wealth & resources for which India got O no adequate economic or material
return. In 1765, the company acquired diwani rights of bengal and gained control
over its revenues. Through the revenue generated, it purchased indian goods as
“investments” and through these investments, Bengal’s revenue was sent to
England. By the end of 18th century, the drain constituted 9% of India’s national
income.
Expansion of railways in India was pursued from 1853 onwards to
meet the demands of colonial expansion. From 1853-1905, the
British built railways of 45,000 km. two important aspects of
development of Indian railways are to be understood.
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• The total investment of 350crore was provided a .co british investors
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for which the Indian govt assured a fixed wrate al a @ of 5% return on their
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investments (when the interest rate in v
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alkbritain was 3%)
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• The planning & construction of Orailways
nly was done keeping the
economic, political & imperialistic interests of British imperialism in
India. The railway rates were fixed in a manner so as to favour
imports & exports & discriminate against internal movement of
goods.
 LAND REVENUE POLICIES
The consolidation of british rule in India was financed by the revenue
generated through taxation of indian peasantry. To push up revenue collection,
the British adopted a variety of strategies:
Permanent settlement- introduced by Lord Cornwallis in 1793 in Bengal, Bihar
& Orrisa. It had the following distinctive features: il . co
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• The zamindar was granted property rights over land. ala
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was made hereditary & transferable. lkh
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• On the other hand, the cultivators wereforeduced to the low status of mere tenants
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and were deprived of long standing Ocustomary rights to land.
• The revenue rates were fixed for perpetuity. While the stability of tax revenue
system was supposed to incentivize the landlord to increase agricultural
production
• Drawback: Land revenue rates were fixed at absurdly high levels. The result
was that between 1793 & 1807 half the zamindari lands were put up for sale.
This led to the rise of a new zamindari class, the erstwhile landlords were
displaced (displacement of old zamindari class).
Ryotwari Settlement: Thomas Munro (1820) recommended the
introduction of ryotwari system in Madras and Bombay presidency.
• Under this system, the revenue settlement was to be made directly with the
cultivators/ryots. The cultivator was to be recognized as the owner of his
plot of land subject to the payment of land revenue
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• The settlement under the ryotwari system was gnot ma made permanent. It was
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revised periodically after 20-30 years whenjuwthe ala revenue demand was
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usually raised na
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• Drawback: However, the ryotwariOsystem did not bring into existence a new
system of peasant ownership because in most areas, the land revenue
fixed was exorbitant & the government retained the right to increase land
revenue at will.
Mahalwari Settlement: William Bentinck (1822) introduced in ganga valley,
North-West provinces, part of central india and punjab. Here the revenue
settlement was made at the village level.
 IMPACT OF COLONIAL LAND
REVENUE POLICIES
1. High burden of taxation: the peasantry suffered under the new
revenue settlement systems imposed by the british.m
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2. Commodification of land and alienation of cultivators gm from their
land: the british system of revenue settlement @
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customary rights of cultivators and made h land a marketable
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commodity. na
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3. On food crops to cash crops: to
Shift in pattern of cultivation from
meet the high revenue demands
4. Alienation of the old zamindari class: the inability to meet the high
revenue demands imposed by the british saw the old zamindars
being deposed of their erstwhile zamindaris and the rise of the new
merchant-zamindars