The Early Administrative Structure; The Regulating Act (1773), From Diarchy to Direct Control: Part I

Dual System (Diarchy) of Government (1765-1772)

• Following the Treaty of Allahabad (1765), Robert Clive set up the infamous dual system of administration in Bengal.
  • On August 12, 1765 Clive secured from Shah Alam II, the powerless Mughal Emperor, a farman granting to the English Company the Diwani of Bengal, Bihar and Orissa, stipulating in return to pay the Emperor an annual subsidy of 26 lakhs of rupees.
    • The Nawab of Bengal became a mere pensioner: the Company was to pay him annually a fixed sum of 53 lakhs of rupees for the support of the Nizamat.
    • Clive thus established a Double Government in theory, with the Company as Diwan, and the Nawab as Nizam. selfstudyhistory.com
• During Dual System, Nawab-ud-Daulla and Saif-ud-Daull were the Nawabs of Bengal.
• Under this system, the administration of Bengal was divided into Nizamat and Diwani.
  • Diwani:
    • The Diwani was concerned with revenue and civil justice.
    • It was the right to collect revenue  which was given to East India Company.
    • The British administration acquired the functions of the Diwani or revenue Diwani (Fiscal) in Bengal, Bihar and Orissa from the Mughal emperor.
  • Nizamat:
    • Nizamat was concerned with police, criminal justice etc.
    • Nizamat (administrative responsibility) was entrusted to Bengal Nawab.
• Though the administration theoretically divided between the Company and the Nawab, the whole power was actually in the hand of the Company.
  • Under the Dual system, the fiction of sovereignty of Mughal emperor and formal authority of Nawab was maintained.
  • As the diwan, the Company was authorised to collect revenues of the province, while through the right to nominate the deputy Nizam (deputy subahdar) it was in a position to control the Nizamat or the police and judicial powers.
  • The deputy subahdar (appointed to help Nawab) could not be removed without the consent of the Company.
    • English Resident at the Durbar decided every matter of importance.
  • The Nawab, having lost all independent military or financial support for his executive actions, became in fact a mere figurehead.
• 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.
  • Company left to the Deputy Diwans Mohammad Reza Khan for Bengal and Raja Shitab Rai for Bihar, the functions of Diwan i.e., land revenue and customs collection, and administration of civil justice.
• 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.
• The establishment of this ‘masked system’ was a sign of the Company’s unwillingness to recognise that it had ceased to be a mere trading body and become a ruling power.
  • In England, the aspect of the arrangement which attracted chief attention was the immense wealth which the Company was expected to derive from the revenues of Bengal, estimated at £ 4,000,000 per annum.
• The system of government associated with the name of Clive continued under his successors Verelst (1767 69) and Cartier (1769-72).

Merits and reasons of the Dual Government:

• The primary object of this arrangement was to bolster up the finances of the Company which had suffered from the maintenance of armies without incurring the burden of formal and avowed dominion.
• Clive showed his sagacity by following the policy of decentralization in the matter of Company’s administration in Bengal.
  • By this policy 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 full 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 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.
  • Some, including Pitt, held even then that the Crown should take over the governmental authority which the Company had now assumed, but this view was held by few and the first intervention of Parliament in the affairs of the Company in 1767 took the form merely of a demand for a share of the plunder to the extent of £ 400,000 per annum.
• 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 be held responsible.
• 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.

Demerit of the Dual Government:

• The Dual Government of Clive has been criticized in various ways. It led to disastrous results.
• Power was divorced from responsibility:
  • The Dual Government of Clive led to disastrous results. The administration in Bengal almost collapsed. Power was divorced from the responsibility.
    • The absence of responsibility on the part of the company led to abuses of power and corruption.
  • The British were in possession of power and money whereas the Nawab had neither power nor money. He had only the responsibility of running the administration and take the blame for any failure.
  • 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.
• Lawlessness:
  • The Nawab also had no power and fund 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.
  • People failed to get proper justice. 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.
• Oppression of peasantry:
  • The dual system caused oppression of peasantry. The condition of agriculture in Bengal gradually deteriorated.
    • 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.
  • Private trade by Company servants caused reduction in the company’s revenue and it demanded higher revenue from the Zamindars and it led to the oppression of peasantry.
  • The oppression reached such a limit that the governor of Bengal, Verelst (1767-1769) had to appoint English supervisors for Diwani lands to check high hardness and venality of revenue collectors and zamindars after the oppression of peasantry become rampant.
    • But his successor John Cartier (1769-1772) found that the English supervisors only made confusion more confounded and corruption more acute.
• Downfall in the revenue collection: 
  • The downfall of agriculture under the Dual Government ultimately led to the downfall of Company’s income due to decrease of revenue collection.
    • During the 7 years for which the dual system was in operation, the Company was on the verge of bankruptcy and the Company had to ask to be excused from paying the sum of £400,000 p.a. demanded by Parliament while its servants were flourishing exceedingly.
    • The sad state of affairs at last roused the British Government to make an effort to introduce some order into the affairs of the Company in India.
• Abuse of private trade:
  • The poor administration in Bengal led to rapid increase of private trade. British were enjoying the duty-free trade.
    • The servants of the East India Company carried on trade and commerce privately without paying any tax. 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.
• Downfall of local industries:
  • 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.
• Oppression by the servants of the Nawabs:
  • 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.
• Partial justice:
  • 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.
• Thus, the Dual Government of Clive proved to Bengal a failure. It gave rise to several complications in the administration of Bengal. The absence of responsibility on the part of the company led to abuses of power and corruption.
• This dual system was proved to be unsuccessful and in 1772 it was ended by Lord Warren Hastings on the orders of the directors of the company.
• At the time of end of this system Mubaraq-ud-Daulla was the Nawab of Bengal.