Of all the European East India companies which came to India as traders in different periods of the 15th and 16th centuries, only the British and the French East India companies remained as dominant ones by the beginning of the 18th century.
In the first decade of the 18th century, the fortunes of the then mighty Mughal Empire began to decline and there emerged a number of successor states or regional powers or country powers in different parts of India.
The two European trading companies after realizing the weakness of the then country powers decided to make sincere efforts to become a strong political power and to expand and consolidate their sway in India. It is the trade interest that made the two European companies chart out this process of territorial expansion.
The European trading companies established their factories on the western, eastern and southern coastal areas and in this process they extended their influence into the mainland territories of the Indian subcontinent.
The expansion and consolidation of the British influence was achieved in a span of one hundred years, i.e., 1757 to 1857 by using the tools of war and diplomacy. Rabindra Nath Tagore, very aptly in a poetic way described this as “darkness settled on the face of the land then the weighing scales in the merchant’s hand changed into the imperial sceptre”.
British policy towards Indian States The evolution of relations between the British authority and states can be traced under following broad stages:
1. Policy of Relative Isolationism (before 1740):- British were more commercial and enterprising company thus initially when they did not have consolidated their position, they had to maintain the policy of isolationism. Commercial interest of British compelled them to often depend upon the native princes. Also the British were cautious to the fact that they were aliens in the soil of India and hence any aggressive policy would mean devastation.
2. East India Company’s struggle for equality with Indian States from a position of subordination(1740-1765):- Starting with Anglo-French rivalry with the coming of Dupleix in 1751, the East India Company asserted political identity with capture of Arcot (1751). With the battle of Plassey in 1757, the East India Company acquired the political power next only to the Bengal Nawabs. In 1765 with the acquisitions of diwani rights of Bengal, Bihar and Odhisa, the east India Company became a significant political power.
3. Policy of Ring-Fence (1765-1813):- In the north, constant threat of Marathas remained and in south Haider Ali became a scourge to the British imperialism. A new policy was required to tackle this situation as a result ring fencing policy was introduced. This policy was reflected in Warren Hastings’ wars against the Marathas and the Mysore, and aimed at creating buffer zones/states to defend the company’s frontiers and protected from direct onslaught of the enemies secondly from these states British would operate against enemies. This was put into practice in Anglo- Mysore war when Hyderabad was used as the buffer state. Similarly, the Awadh and Rohilkhand were used as buffer states against Marathas. Wellesley’s policy of Subsidiary Alliance was an extension of ring fence policy. The buffer states and the ring fencing provinces would not any longer remain the same, rather, they were first brought under control of British and from there the policy of expansionism would be carried out effectively.
4. Policy of Sub-ordinate Isolation (1813-57):- Lord Warren Hastings replaced the policy of mutual reciprocity and amicability in relations between princely states and British with policy of sub-ordinate isolation. Under this policy as many as 145 native states in central India, 20 in Rajputana (present day Rajasthan) and another 145 in the Kathiawad region were brought (actually bullied) into submission by the company so that it could extract whatever advantages it wanted in terms of land, agricultural produce or any kind of revenue for promoting its trade interests and multiplying profits. Subject to this limited interest the native sovereign was left unintervened in any other manner. The infamous ‘doctrine of lapse’ whereby the company could take complete control and possession of a native state in case there was any problem of succession after the ruler’s death or incapacity to rule.Even after the conquest and annexation, isolation took place as the British never treated the princely states as the part of British Empire in India. Rather what they did was, they controlled each and every important aspect of administration and retained the princes for other regular affairs.
Annexation Policies of the Company:
A) Doctrine of Lapse: Dalhousie, the last of the Governors General of the time of the Company was associated with this policy of the Doctrine of Lapse. By using this policy as a means, Dalhousie annexed the native states like Satara, Nagpur, Jhansi, Jaitpur and Sambhalpur. By denying the right of adoption to a Hindu native state as legitimate one, the British Governor General Dalhousie annexed the above native states to the British Empire in India.
His policy resulted in a political upheaval which threatened to destroy the solid foundations of the Company’s rule in India in 1857, because his annexationist policy based on the Doctrine of Lapse has no legal, moral or expediency justification. The British East India Company expanded its control over a vast territory and also extended its influence beyond India in Sri Lanka in the south, Mauritius in the south-west Afghanistan in the north-west, Nepal in the north to Andamans and Nicobar, Burma, Malaya, and Philippines in the south-east.
It can be said without any hesitation that it was mainly at the cost of India that England became the dominant power in the whole of South Asia and Asian lands on the Indian ocean by using the Indian sepoys like cannon fodder and draining the Indian treasury through unnecessary wars and diplomacy.
Features of Doctrine of Lapse:
- According to this, any princely state under the direct or indirect (as a vassal) control of the East India Company where the ruler did not have a legal male heir would be annexed by the company.
- This was not introduced by Lord Dalhousie even though it was he who documented it, and used it widely to acquire territories for the British.
- As per this, any adopted son of the Indian ruler could not be proclaimed as heir to the kingdom. The adopted son would only inherit his foster father’s personal property and estates.
- The adopted son would also not be entitled to any pension that his father had been receiving or to any of his father’s titles.
- This challenged the Indian ruler’s long-held authority to appoint an heir of their choice.
Effects of Doctrine of Lapse:
- Many Indian states lost their sovereignty and became British territories.
- This led to a lot of unrest among the Indian princes.
- A lot of people were unhappy with the ‘illegal’ nature of this doctrine and this was one of the causes of the Indian Revolt of 1857.
- Nana Sahib and the Rani of Jhansi had grievances against the British because the former’s pension was stopped by the British after his foster father died, and the Rani’s adopted son was denied the throne under the doctrine of lapse.
- Dalhousie returned to Britain in 1856. After the Indian Revolt broke out in 1857, his governance was widely criticised as one of the causes of the rebellion.
B) Subsidiary Alliance: Besides the tool of war, the British East India Company, like a hungry wolf was anxiously waiting to use any means to expand its territorial holdings in India. Of such means Subsidiary Alliance is one. It is Wellesley, the Governor General of Bengal, who vigorously implemented this policy for the advantage of the company. Though, Wellesley is associated with Subsidiary Alliance, the author and originator was not Wellesley but Dupleix, the French Governor. Dupleix devised it and implemented it and later the same was followed by the British from Clive to Wellesley.
Alfred Lyall notices four stages in the evolution of this system. In the first stage, the British East India Company supplied weapons and armies to the native ruler, as we notice the supply of arms and armies to the Nawab of Avadh against Rohillas during the tenure of Warren Hastings. In the second stage, the British with the help of the native ruler took the field. In the third stage, the British took money from the native ruler for the maintenance of the army separately for the defense of such state, e.g., Oudh in 1797.
In the fourth stage, the British agreed to maintain a permanent and fixed subsidiary force within the territory of its ally in return for a payment of a sum or ceding certain territory permanently to the British. Further, Wellesley by this Subsidiary Alliance system made it mandatory for the ally to keep a British Resident in the court of the native ruler, not to employ any other European nationals in this service, not to maintain relations with any other native ruler without the prior approval of the British. The British agreed to protect the territory of such allies from foreign aggression and not to intervene in the internal affairs of such native ally who entered into this alliance.
Subsidiary Alliance was basically a treaty between the British East India Company and the Indian princely states, by virtue of which the Indian kingdoms lost their sovereignty to the English. It also was a major process that led to the building of the British Empire in India. A critical review of this policy clearly reveals that this is advantageous to the British and disadvantageous to the native ruler. The policy was designed in such a way that it served the main interest of the British East India Company in expanding its hold in new territories of its allies without spending money from its coffers and to make these allies its dependencies.
Salient features of subsidiary alliance:
- External relations were surrendered to the care of the Company. No state was to declare war without the permission of the Company. Also, mediation of Company was required to negotiate with other states.
- Company troops were required to be stationed within the territory of the states. For the maintenance of these troops, larger states gave the sovereign rights over certain parts of their territory to the Company, while smaller states were required to pay in cash.
- A British resident was required to stay in the state.
- Company was not to interfere in the internal affairs.
- States were required to take permission of the Company in employing Europeans.
- This allowed the Company to maintain additional troops at strategic locations without any significant expense.
- It disarmed the Indian states and deprived the Indian princes any means of forming any confederacy against the British.
- By stationing their troops in the territory of Indian states, British gained control of strategic and key locations in India.
- It acquired the power to effectively counteract any possible French moves in India.
- Company acquired ‘territories in full sovereignty’ of certain territories which were granted to them by Indian states in lieu for the upkeep of the British army.
Effects of Subsidiary Alliance:
- As a result of Indian rulers disbanding their armies, many people were rendered unemployed.
- Many Indian states lost their independence and slowly, most parts of India were coming under British control.
- The Nizam of Hyderabad was the first to accept the Subsidiary Alliance in 1798
Acquisitions of Indian States in British Empire
- Under Subsidiary Alliance: Hyderabad(1798), Mysore(1799), Avadh(1801), Peshwa(1802), Bhonsle and Scindia(1803), Udaipur, Jodhpur and Jaipur(1818).
- Under Doctrine of Lapse: Satara(1848), Jhansi, Sambhalpur of Orrisa(1849), Baghat(1850), Jaipur of Bundelkhand(1849),Udaipur in Rajputana(1852), Jhansi(1853) and Nagpur(1854).
The policy of "DIVIDE AND RULE” is a political tool to take advantage of the schism prevalent in the society and prolong the dominance over the people. It's an age old idea having roots dating back to Roman Empire.
Such divisive policies succeeded only as we Indians were ignorant and it ultimately culminated into the division of India and much loss of life and unmatched bitterness that persist even today between the two nations.
Structure of British Raj Up-to 1857:
When the officials of the East India Company acquired control over Bengal in 1765, they had little intention of making any innovations in its administration. They only desired to carry on their profitable trade and collect taxes for remission to England.
From 1765 to 1772, in the period of the Dual Government, Indian officials were allowed to function as before but under the Overall control of the British Governor and British officials.
The Indian officials had responsibility but no power while the Company’s officials had power but no responsibility. Both sets of officials were venal and corrupt men. In 1772 the Company ended the Dual Government and undertook to administer Bengal directly through its own servants. But the evils inherent in the administration of a country by a purely commercial company soon came to the surface.
The East India Company was at this time a commercial body designed to trade with the East. Moreover, its higher authority was situated in England, many thousands of kilometers away from India. Yet, it had come to wield political power over millions of people. This anomalous state of affairs posed many problems for the British government.
What was to be the relation of the East India Company and its possessions to the government in Britain?
How were the Company’s authorities in Britain to control the great multitude of officials and soldiers stationed in far away India?
How was a single centre of control to be provided in India over the far-flung British possessions in Bengal, Madras and Bombay?
The first of these problems was the most pressing as well as the most important. It was also closely interwoven with party and parliamentary rivalries in Britain, the political ambitions of English statesmen, and the commercial greed of English merchants.
The rich resources of Bengal had fallen into the hands of the Company whose Directors immediately raised dividends to 10 per cent in 1767 and proposed in 1771 to raise the rate further to 12 ½ per cent.
The Company’s English servants took advantage of their position to make quick fortunes through illegal and unequal trade and the forcible collection of bribes and ‘gifts’ from Indian chiefs and zamindars. Clive returned to England at the age of 34 with wealth and property yielding £40,000 a year.
The Company’s high dividends and the fabulous wealth brought home by its officials excited the jealousy of other sections of British society.
Merchants kept out of the East by the monopoly of the Company, the growing class of manufacturers and, in general, the rising forces of free enterprise in Britain wanted to share in the profitable Indian trade and the riches of India which the Company and its servants alone were enjoying.
They, therefore, worked hard to destroy the Company’s trade monopoly and, in order to achieve this, they attacked the Company’s administration of Bengal. They also made the officials of the Company who returned from India their special target.
These officials were given the derisive title of ‘nabobs’ and were ridiculed in the press and on the stage. They were boycotted by the aristocracy and were condemned as the exploiters and oppressors of the Indian people. Their two main targets were Clive and Warren Hastings. By condemning the ‘nabobs’, the opponents of the Company hoped to make the Company unpopular and then to displace it.
Many ministers and other Members of Parliament were keen to benefit from the acquisition of Bengal. They sought to win popular support by forcing the Company to pay tribute to the British government so that Indian revenues could be used to reduce taxation or the public debt of England.
In 1767, the Parliament passed an act obliging the Company to pay to the British treasury £400,000 per year. Many political thinkers and statesmen of Britain wanted to control the activities of the Company and its officials because they were afraid that the powerful Company and its rich officials would completely debauch the English nation and its politics.
The parliamentary politics of Britain during the latter half of the eighteenth century was corrupt in the extreme. The Company as well as its retired officials bought seats in the House of Commons for their agents. Many English statesmen were worried that the Company and its officials, backed by Indian plunder, might gain a preponderant influence in the government of Britain.
The Company and its vast empire in India had to be controlled or the Company, as master of India, would soon come to control British administration and be in a position to destroy the liberties of the British people.
The exclusive privileges of the Company were also attacked by the rising school of economists representing free-trade manufacturing capitalism.
In his celebrated work, The Wealth of Nations, Adam Smith, the founder of classical economics, condemned the exclusive companies:
Such exclusive companies, therefore, are nuisances in much respect; always more or less inconvenient to the countries in which they are established and destructive to those which have the misfortune to fall under their government.
Thus, reorganization of the relations between the British state and the Company’s authorities became necessary and the occasion arose when the Company had to ask the government for a loan of £1,000,000. But, while the Company’s enemies were many and powerful, it was not without powerful friends in the Parliament; moreover, the king, George III, was its patron. The Company, therefore, fought back.
In the end, the Parliament worked out a compromise by which the interests of the Company and of the various influential sections of British society were delicately balanced. It was decided that the British government would control the basic policies of the Company’s Indian administration so that British rule in India was carried on in the interests of the British upper classes as a whole.
At the same time the Company would retain its monopoly of Eastern trade and the valuable right of appointing its officials in India. The details of Indian administration were also left to the directors of the Company.
The first important parliamentary act regarding the Company’s affairs was the Regulating Act of 1773. This Act made changes in the constitution of the Court of Directors of the Company and subjected their actions to the supervision of the British Government. The Regulating Act soon broke down in practice. It had not given the British government effective and decisive control over the Company.
The Act had also failed to resolve the conflict between the Company and its opponents in England who were daily growing stronger and more vocal. Moreover, the Company remained extremely vulnerable to the attacks of its enemies as the administration of its Indian possessions continued to be corrupt, oppressive, and economically disastrous.
The defects of the Regulating Act and the exigencies of British politics necessitated the passing in 1784 of another important act known as the Pitt’s India Act. This Act gave the British government supreme control over the company’s affairs and its administration in India. It established six commissioners for the affairs of India, popularly known as the Board of Control, including two Cabinet Ministers.
The Board of Control was to guide and control the work of the Court of Directors and the Government of India. The Act placed the Government of India in the hands of the Governor-General and a Council of three, so that if the Governor-General could get the support of even one member, he could have his way.
The Act clearly subordinated the Bombay and Madras Presidencies to Bengal in all questions of war, diplomacy, and revenues.
With this Act began a new phase of the British conquest of India. While the East India Company became the instrument of British national policy, India was to be made to serve the interests of all sections of the ruling classes of Britain.
The Company, having saved its monopoly of the Indian and Chinese trade, was satisfied. Its directors retained the profitable right of appointing and dismissing its British officials in India. Moreover, the Government of India was to be carried out through their agency.
While the Pitt’s India Act laid down the general framework in which the Government of India was to be carried on till 1857, later enactments brought about several important changes which gradually diminished the powers and privileges of the Company. In 1786, the Governor-General was given the authority to overrule his Council in matters of importance affecting safety, peace, or the interests of the empire in India.
By the Charter Act of 1813, the trade monopoly of the Company in India was ended and trade with India was thrown open to all British subjects. But trade in tea and trade with China was still exclusive to the Company. The government and the revenues of India continued to be in the hands of the Company. The Company also continued to appoint its officials in India.
The Charter Act of 1833 brought the Company’s monopoly of tea trade and trade with China to an end. At the same time, the debts of the Company were taken over by the Government of India, which was also to pay its shareholders a IOV2 per cent dividend on their capital. The Government of India continued to be run by the Company under the strict control of the Board of Control.
Thus the various acts of Parliament discussed above completely subordinated the Company and its Indian administration to the British Government. At the same time, it was recognised that day- to-day administration of India could not be run or even superintended from a distance of 6,000 miles.
Supreme authority in India was, therefore, delegated to the Governor-General-in-Council. The Governor-General, having the authority to overrule his Council on important questions, became in fact the real, effective ruler of India, functioning under the superintendence, control and direction of the British government.
The British created a new system of administration in India to serve their purposes. But before we discuss the salient features of this system, it would be better if we first examine the purposes which it was designed to serve, for the main function of the administrative system of a country is to accomplish the aims and objects of its rulers.
The chief aim of the British was to enable them to exploit India economically to the maximum advantage of various British interests, ranging from the Company to the Lancashire manufacturers.
In 1793, Lord Cornwallis, the Governor-General, defined two primary objectives for the Bengal government. It must ‘ensure its political safety and it must render the possession of the country as advantageous as possible to the East India Company and the British nation’.
At the same time India was to be made to bear the full cost of its own conquest as well as of foreign rule. An examination of the economic policies of the British in India is, therefore, of prime importance.
India is perhaps the sole example in human history where a trading company took over the reins of government and continued to be a trading company even thereafter. Quite obviously the first and the last objective of the company continued to be profit making. Governance instead of being a vehicle for public welfare was reduced and degenerated to a tool for maximising the company’s profits. The most visible impact of the company’s policies therefore was disempowerment of the upper class zamindars, impoverishment of the common man and total marginalisation of the local artisans.
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