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Company rule in India

For usage, see British rule in India

Company rule in India (sometimes, Company Raj, "raj," lit. "rule" in Hindi) refers to the rule or dominion of the British East India Company on the Indian subcontinent. This is variously taken to have commenced in 1757, after the Battle of Plassey, when the Nawab of Bengal surrendered his dominions to the Company, in 1765, when the Company was granted the diwani, or the right to collect revenue, in Bengal and Bihar, or in 1772, when the Company established a capital in Calcutta, appointed its first Governor-General, Warren Hastings, and became directly involved in governance. The rule lasted until 1858, when, consequent to the Government of India Act 1858, the British government assumed the task of directly administering India.

Expansion and territory

The English East India Company (hereafter, the Company) was founded in 1600, as The Company of Merchants of London Trading into the East Indies. It gained footing in India in 1612, after Mughal emperor Jahangir granted it the rights to establish a factory (a trading post) in Surat. In 1640, consequent to receiving similar permission from the local Vijayanagara ruler, a second factory was established in Madras. Soon, in 1668, the Company leased Bombay island, a former Portuguese outpost recently gifted to England as part of the dowry of Catherine of Braganza for her marriage to Charles II. Thereafter, in 1687, the company moved its headquarters from Surat to Bombay. Next, in 1690, a Company settlement was established in Calcutta, again after receiving such rights from of the Mughal emperor, and the Company now began its lengthy presence on the Indian subcontinent. During this time, other companies, established by the Portuguese, Dutch, French, and Danish, were similarly expanding in the region.

Although the British had earlier ruled in the factory areas, the beginning of British rule is often dated from the 1757 Battle of Plassey. Robert Clive's victory was consolidated in 1764 at the Battle of Buxar (in Bihar), where the emperor, Shah Alam II, was defeated. As a result, Shah Alam was coerced to appoint the company to be the diwan for the areas of Bengal, Bihar, and Orissa (this pretense of Mughal control was abandoned in 1827). The company thus became the supreme, but not the titular, power in much of the lower Gangetic plain. The Company also expanded from their bases at Bombay and Madras. The Anglo-Mysore Wars of 1766 to 1799 and the Anglo-Maratha Wars of 1772 to 1818 placed the Company dominant over much India south of the Sutlej River.

The company's dominance of India took two major forms. The first was the use of subsidiary alliances between the company and the local rulers, these agreements were essentially feudal in nature and under them the local rulers gave up much of their control on foreign affairs to the Company and in return had their independence guaranteed. This development created the Native States, or Princely States, of the Hindu maharaja and the Muslim nawabs. The second and less favoured method of control was the outright governance of areas; it is these parts of the subcontinent that are more properly called 'British India'.

At the turn of the 19th century, Governor-General Wellesley began what became two decades of accelerated expansion of Company territories. Prominent among the princely states were: Cochin (1791), Jaipur (1794), Travancore (1795), Hyderabad (1798), Mysore (1799), Cis-Sutlej Hill States (1815), Central India Agency (1819), Kutch and Gujarat Gaikwad territories (1819), Rajputana (1818), and Bahawalpur (1833). The annexed regions included the Northwest Provinces (comprising Rohilkhand, Gorakhpur, and the Doab) (1801), Delhi (1803), and Sindh (1843). Punjab, North-West Frontier Province, and Kashmir, were annexed after the Anglo-Sikh Wars in 1849; however, Kashmir was immediately sold under the Treaty of Amritsar (1850) to the Dogra Dynasty of Jammu, and thereby became a princely state. In 1854 Berar was annexed, and the state of Oudh two years later.

The East India Company also signed treaties with Afghan rulers and with Ranjit Singh to counterbalance Russian support of Persian plans in western Afghanistan. In 1839 the Company's actions brought about the First Afghan War (1839-42). However, as the British expanded their territory in India, so did Russia in Central Asia, with the taking of Bukhara and Samarkand in 1863 and 1868 respectively, thereby setting the stage for the Great Game of Central Asia.

The Governors-General

Governor-General Period of Tenure Events
Warren Hastings 20 October 17731 February 1785 Bengal famine of 1770 (1769–1773)
Rohilla War (1773–1774
First Anglo-Maratha War (1777–1783)
Second Anglo-Mysore War (1780–1784)
John MacPherson (locum tenens) 1 February 178512 September 1786
Charles Cornwallis 12 September 178628 October 1793 Permanent Settlement
Third Anglo-Mysore War (1789–1792)
John Shore 28 October 1793–March 1798
Alured Clarke (locum tenens) March 1798–18 May 1798
Richard Wellesley 18 May 179830 July 1805 Fourth Anglo-Mysore War (1798–1799)
Second Anglo-Maratha War (1803 - 1805)
Charles Cornwallis (second term) 30 July 18055 October 1805
George Hilario Barlow (locum tenens) 10 October 180531 July 1807 Vellore Mutiny (July 10, 1806)
Lord Minto 31 July 18074 October 1813 Invasion of Java
Occupation of Mauritius
Marquess of Hastings 4 October 18139 January 1823 Anglo-Nepal War of 1814
Annexation of Kumaon, Garhwal, and east Sikkim.
Third Anglo-Maratha War (1817–1818)
John Adam (locum tenens) 9 January 18231 August 1823
Lord Amherst 1 August 182313 March 1828 First Anglo–Burmese War (1823–1826)
Annexation of Assam, Manipur, Arakan, and Tenasserim from Burma
William Butterworth Bayley (locum tenens) 13 March 18284 July 1828
William Bentinck 4 July 182820 March 1835 Abolition of Sati
Suppression of Thuggee
Charles Metcalfe (locum tenens) 20 March 18354 March 1836
Lord Auckland 4 March 183628 February 1842 First Anglo-Afghan War (1839–1842)
Massacre of Elphinstone's army
Lord Ellenborough 28 February 1842–June 1844 First Anglo-Afghan War (1839–1842)
Conquest of Sindh
William Wilberforce Bird (locum tenens) June 1844–23 July 1844
Henry Hardinge 23 July 184412 January 1848 First Anglo-Sikh War (1845–1846)
Annexation of Jullundur Doab
Marquess of Dalhousie 12 January 184828 February 1856 Second Anglo-Sikh War (1848–1849)
Annexation of Punjab, NWFP, and Kashmir
Sale of Kashmir to Gulab Singh of Jammu
Second Anglo-Burmese War (1852–1853)
Annexation of Lower Burma
Annexation of Satara, Nagpur, and Jhansi under Doctrine of Lapse
Annexation of Berar and Awadh
Ganges Canal, Indian Railways, Telegraph in India
Charles Canning 28 February 18561 November 1858 Indian Rebellion of 1857
Liquidation of the English East India Company under Government of India Act 1858

Regulation of Company rule

Until Clive's victory at Plassey, the East India Company territories in India, which consisted largely of the presidency towns of Calcutta, Madras, and Bombay, were governed by the mostly autonomous and sporadically unmanageable town councils, composed of merchants; the councils barely had enough powers for the effective management of the local affairs, and the ensuing lack of oversight of the overall Company operations in India, led to some grave abuses by Company officers or their allies. Clive's victory, and the award of the diwani of the rich region of Bengal, brought India into the public spotlight in Britain. The Company's money management practices also came to be questioned, especially as it began to post net losses even as some Company servants, the "Nabobs," returned to Britain with large fortunes, which—according to rumors then current—were acquired unscrupulously. By 1772, the Company needed British government loans to stay afloat, and there was fear in London that the Company's corrupt practices could soon seep into British business and public life. The rights and duties of the British government with regards the Company's new territories also came to be examined. The British parliament then held several inquiries and in 1773, during the premiership of Lord North, enacted the Regulating Act, "for the better management of the affairs of the East India Company as well in India as in Europe."

Although Lord North himself wanted the Company's territories to be taken over by the British state, he faced determined political opposition from many quarters, including many in the City of London and the British parliament; the result was a compromise in which the Regulating Act—although implying the ultimate sovereignty of the British Crown over these new territories—asserted that the Company could act as a sovereign power on behalf of the Crown, while being concurrently subject to oversight and regulation by the British government and parliament. The Court of Directors of the Company were required under the Act to submit all communications regarding civil, military, and revenue matters in India for scrutiny by the British government. For the governance of the Indian territories, the act asserted the supremacy of the Presidency of Fort William (Bengal) over those of Fort St. George (Madras) and Bombay; it also nominated a Governor-General (Warren Hastings) and four councilors for administering the Bengal presidency (and for overseeing the Company's operations in India). "The subordinate Presidencies were forbidden to wage war or make treaties without the previous consent of the Governor-General of Bengal in Council, except in case of imminent necessity. The Governors of these Presidencies were directed in general terms to obey the orders of the Governor-General-in-Council, and to transmit to him intelligence of all important matters." However, the imprecise wording of the Act, left it open to be variously interpreted; consequently, the administration in India continued to be hobbled by disunity between the provincial governors, between members of the Council, and between the Governor-General and the Council. The Regulating Act also addressed the prevalent corruption in India: Company servants were henceforth forbidden to engage in private trade in India or to receive "presents" from Indian nationals.

William Pitt's India Act of 1784 established a Board of Control in England both to supervise the East India Company's affairs and to prevent the Company's shareholders from interfering in the governance of India. The Board of Control consisted of six members, which included one Secretary of State from the British cabinet, as well as the Chancellor of the Exchequer. Around this time, there was also extensive debate in the British parliament on the issue of landed rights in Bengal, with a consensus developing in support of the view advocated by Philip Francis, a member of the Bengal council and political adversary of Warren Hastings, that all lands in Bengal should be considered the "estate and inheritance of native land-holders and families ..." Mindful of the reports of abuse and corruption in Bengal by Company servants, the India Act itself noted numerous complaints that "'divers Rajahs, Zemindars, Polygars, Talookdars, and landholders"' had been unjustly deprived of 'their lands, jurisdictions, rights, and privileges'." At the same time the Company's directors, were now leaning towards, Francis's view that the land-tax in Bengal should be made fixed and permanent, setting the stage for the Permanent Settlement (see section Revenue settlements under the Company below). The India Act also created in each of the three presidencies a number of administrative and military posts, which included: a Governor and three Councilors, one of which was the Commander in Chief of the Presidency army. Although the supervisory powers of the Governor-General-in-Council in Bengal (over Madras and Bombay) were extended—as they were again in the Charter Act of 1793—the subordinate presidencies continued to exercise some autonomy until both the extension of British possessions into becoming contiguous and the advent of faster communications in the next century. Still, the new Governor-General appointed in 1786, Lord Cornwallis, not only had more power than Hastings, but also had the support of a powerful British cabinet minister, Henry Dundas, who, as Secretary of state for the Home Office, was in charge of the overall India policy. From 1784 onwards, the British government had the final word on all major appointments in India; a candidate's suitability for a senior position was often decided by the strength of his political connections rather than that of his administrative ability. Although this practice resulted in many Governor-General nominees being chosen from Britain's conservative landed gentry, there were some liberals as well, such as Lord William Bentinck and Lord Dalhousie.

British political opinion was also shaped by the attempted impeachment of Warren Hastings; the trial, whose proceedings began in 1788, ended, with Hastings' acquittal, in 1795. Although the effort was chiefly coordinated by Edmund Burke, it also drew support from within the British government. Burke, accused Hastings not only of corruption, but—appealing to universal standards of justice—also of acting solely upon his own discretion and without concern for law and of willfully causing distress to others in India; in response, Hastings' defenders asserted that his actions were in concert with Indian customs and traditions. Although Burke's speeches at the trial drew applause and focused attention on India, Hastings was eventually acquitted, due, in part, to the revival of nationalism in Britain in the wake of the French Revolution; nonetheless, Burke's effort had the effect of creating a sense of responsibility in British public life for the Company's dominion in India.

Soon rumblings began to appear among merchants in London that the monopoly granted to the East India Company in 1600 to facilitate it to better organize against Dutch and French competition in a distant region, was no longer needed. In response, in the Charter Act of 1813, the British parliament renewed the Company's charter but terminated its monopoly except with regard to tea and trade with China, opening India both to private investment and missionaries. With increased British power in India supervision of Indian affairs by the British Crown and parliament increased as well; by the 1820s British nationals could transact business or engage in missionary work under the protection of the Crown in the three presidencies. Finally, in Charter Act of 1833, the British parliament revoked the Company's trade license altogether, making the Company a part of British governance, although the administration of British India remained the province of Company officers. The Charter Act of 1833 also charged the Governor-General-in-Council (to whose title was now added "of India") with the supervision of civil and military administration of the totality of India, as well the exclusive power of legislation. Since the British territories in north India had now extended up to Delhi, the Act also sanctioned the creation of a Presidency of Agra, later constituted, in 1936, as the Lieutenant-Governorship of the North-Western Provinces (current-day western Uttar Pradesh). With the annexation of Oudh in 1856, this territory was extended, and eventually became the United Provinces of Agra and Oudh. In addition, in 1854, a Lieutenant-Governor was appointed for the region of Bengal, Bihar and Orissa, leaving the Governor-General to concentrate on the governance of India.

Revenue settlements under the Company

In the remnant of the Mughal revenue system existing in pre-1765 Bengal, zamindars, or "land holders," collected revenue on behalf of the Mughal emperor, whose representative, or diwan supervised their activities. In this system, the assortment of rights associated with land were not possessed by a "land owner," but rather shared by the several parties with stake in the land, including the peasant cultivator, the zamindar, and the state. The zamindar served as an intermediary who procured economic rent from the cultivator, and after withholding a percentage for his own expenses, made available the rest, as revenue to the state. Under the Mughal system, the land itself belonged to the state and not to the zamindar, who could transfer only his right to collect rent. On being awarded the diwani or overlordship of Bengal following the Battle of Buxar in 1764, the East India Company found itself short of trained administrators, especially those familiar with local custom and law; tax collection was consequently farmed out. This uncertain foray into land taxation by the Company, may have gravely worsened the impact of a famine that struck Bengal in 1769-70 in which between seven and ten million people—or between a quarter and third of the presidency's population—may have died. However, the company provided little relief either through reduced taxation or by relief efforts, and the economic and cultural impact of the famine was felt decades later, even becoming, a century later, the subject of Bankim Chandra Chatterjee's novel Anandamath.

In 1772, under Warren Hastings, the East India Company took over revenue collection directly in the Bengal Presidency (then Bengal and Bihar), establishing a Board of Revenue with offices in Calcutta and Patna, and moving the pre-existing Mughal revenue records from Murshidabad to Calcutta. In 1773, after Oudh ceded the tributary state of Benaras, the revenue collection system was extended to the territory with a Company Resident in charge. The following year—with a view to preventing corruption—Company district collectors, who were then responsible for revenue collection for an entire district, were replaced with provincial councils at Patna, Murshidabad, and Calcutta, and with Indian collectors working within each district. The title, "collector," reflected "the centrality of land revenue collection to government in India: it was the government's primary function and it moulded the institutions and patterns of administration.

The Company inherited a revenue collection system from the Mughals in which the heaviest proportion of the tax burden fell on the cultivators, with one-third of the production reserved for imperial entitlement; this pre-colonial system became the Company revenue policy's baseline. However, there was vast variation across India in the methods by which the revenues were collected; with this complication in mind, a Committee of Circuit toured the districts of expanded Bengal presidency in order to make a five-year settlement, consisting of five-yearly inspections and temporary tax farming. In their overall approach to revenue policy, Company officials were guided by two goals: first, preserving as much as possible the balance of rights and obligations that were traditionally claimed by the farmers who cultivated the land and the various intermediaries who collected tax on the state's behalf and who reserved a cut for themselves; and second, identifying those sectors of the rural economy that would maximize both revenue and security. Although their first revenue settlement turned out to be essentially the same as the more informal pre-existing Mughal one, the Company had created a foundation for the growth of both information and bureaucracy.

In 1793, the new Governor-General, Lord Cornwallis, promulgated the permanent settlement of land revenues in the presidency, the first socio-economic regulation in colonial India. It was named permanent because it fixed the land tax in perpetuity in return for landed property rights for zamindars; it simultaneously defined the nature of land ownership in the presidency, and gave individuals and families separate property rights in occupied land. Since the revenue was fixed in perpetuity, it was fixed at a high level, which in Bengal amounted to £3 million at 1789-90 prices. According to one estimate, this was 20% higher than the revenue demand before 1757. Over the next century, partly as a result of land surveys, court rulings, and property sales, the change was given practical dimension. An influence on the development of this revenue policy were the economic theories then current, which regarded agriculture as the engine of economic development, and consequently stressed the fixing of revenue demands in order to encourage growth. The expectation behind the permanent settlement was that knowledge of a fixed government demand would encourage the zamindars to increase both their average outcrop and the land under cultivation, since they would be able to retain the profits from the increased output; in addition, it was envisaged that land itself would become a marketable form of property that could be purchased, sold, or mortgaged. A feature of this economic rationale was the additional expectation that the zamindars, recognizing their own best interest, would not make unreasonable demands on the peasantry.

However, these expectations were not realized in practice, and in many regions of Bengal, the peasants bore the brunt of the increased demand, there being little protection for their traditional rights in the new legislation. Forced labor of the peasants by the zamindars became more prevalent as cash crops were cultivated to meet the Company revenue demands. Although commercialized cultivation was not new to the region, it had now penetrated deeper into village society and made it more vulnerable to market forces. The zamindars themselves were often unable to meet the increased demands that the Company had placed on them; consequently, many defaulted, and by one estimate, up to one-third of their lands were auctioned during the first three decades following the permanent settlement. The new owners were often Brahmin and Kayastha employees of the Company who had a good grasp of the new system, and, in many cases, had prospered under it.

Since the zamindars were never able to undertake costly improvements to the land envisaged under the Permanent Settlement, some of which required the removal of the existing farmers, they soon became rentiers who lived off the rent from their tenant farmers. In many areas, especially northern Bengal, they had to increasingly share the revenue with intermediate tenure holders, called jotedars, who supervised farming in the villages. Consequently, unlike the contemporaneous Enclosure movement in Britain, agriculture in Bengal remained the province of the subsistence farming of innumerable small paddy fields.

The zamindari system was one of two principal revenue settlements undertaken by the Company in India. In southern India, Thomas Munro, who would later become Governor of Madras, promoted the ryotwari system, in which the government settled land-revenue directly with the peasant farmers, or ryots. This was, in part, a consequence of the turmoil of the Anglo-Mysore Wars, which had prevented the emergence of a class of large landowners; in addition, Munro and others felt that ryotwari was closer to traditional practice in the region and ideologically more progressive, allowing the benefits of Company rule to reach the lowest levels of rural society. At the heart of the ryotwari system was a particular theory of economic rent—and based on David Ricardo's Law of Rent—promoted by utilitarian James Mill who formulated the Indian revenue policy between 1819 and 1830. "He believed that the government was the ultimate lord of the soil and should not renounce its right to 'rent', i.e. the profit left over on richer soil when wages and other working expenses had been settled." Another keystone of the new system of temporary settlements was the classification of agricultural fields according to soil type and produce, with average rent rates fixed for the period of the settlement. According to Mill, taxation of land rent would promote efficient agriculture and simultaneously prevent the emergence of a "parasitic landlord class." Mill advocated ryotwari settlements which consisted of government measurement and assessment of each plot (valid for 20 or 30 years) and subsequent taxation which was dependent on the fertility of the soil. The taxed amount was nine-tenths of the "rent" in the early nineteenth century and gradually fell afterwards. However, in spite of the appeal of the ryotwari system's abstract principles, class hierarchies in southern Indian villages had not entirely disappeared—for example village headmen continued to hold sway—and peasant cultivators sometimes came to experience revenue demands they could not meet. In the 1850s, a scandal erupted when it was discovered that some Indian revenue agents of the Company were using torture to meet the Company's revenue demands.

Land revenue settlements constituted a major administrative activity of the various governments in India under Company rule. In all areas other than the Bengal Presidency, land settlement work involved a continually repetitive process of surveying and measuring plots, assessing their quality, and recording landed rights, and constituted a large proportion of the work of Indian Civil Service officers working for the government. After the Company lost its trading rights, it became the single most important source of government revenue, roughly half of overall revenue in the middle of the 19th century; even so, between the years 1814 and 1859, the government of India ran debts in 33 years. With expanded dominion, even during non-deficit years, there was just enough money to pay the salaries of a threadbare administration, a skeleton police force, and the army.

Political underpinnings of Company rule

Since the Company operated under financial constraints, it had to set up political underpinnings for its rule. The most important such support came from the subsidiary alliances with Indian princes during the first 75 years of Company rule. In the early 19th century, the territories of these princes accounted for one-third of India. When an Indian ruler, who was able to secure his territory, wanted to enter such an alliance, the Company welcomed it as an economical method of indirect rule, which did not involve the economic costs of direct administration or the political costs of gaining the support of alien subjects. In return, the Company undertook the "defense of these subordinate allies and treated them with traditional respect and marks of honor."

Army, Police, and Indian Civil Service

In 1772, when Warren Hastings was appointed the first Governor-General of the Presidency of Fort William with capital in Calcutta, one of his first undertakings was the rapid expansion of the Presidency's army. Since the available soldiers, or Sepoys, from Bengal—many of whom had fought against the British in the Battle of Plassey—were now suspect in British eyes, Hastings recruited farther west from the "major breeding ground of India's infantry in eastern Awadh and the lands around Benaras." The high caste rural Hindu Rajputs and Brahmins of this region (known as purabias (Hindi, lit. "easterners")) had been recruited by Mughal armies for two hundred years; the East India Company continued this practice for the next 75 years, with these soldiers comprising up to eighty per cent of the Bengal army. However, in order to avoid any friction within the ranks, the Company also took pains to adapt its military practices to their religious requirements. Consequently, these soldiers dined in separate facilities; in addition, overseas service, considered polluting to their caste, was not required of them, and the army soon came to recognize Hindu festivals officially. "This encouragement of high caste ritual status, however, left the government vulnerable to protest, even mutiny, whenever the sepoys detected infringement of their prerogatives."()
! bgcolor="#DDDDDD" colspan="4" | East India Company armies after the Reorganization of 1796
British troops Indian troops
Bengal Presidency Madras Presidency Bombay Presidency
24,000 24,000 9,000
13,000 Total Indian troops: 57,000
Grand total, British and Indian troops: 70,000
The Bengal army was used in military campaigns in other parts of India and abroad: to provide crucial support to a weak Madras army in the Third Anglo-Mysore War in 1791, and also in Java and Ceylon. In contrast to the soldiers in the armies of Indian rulers, the Bengal sepoys not only received high pay, but also received it reliably, thanks in great measure to the Company's access to the vast land-revenue reserves of Bengal. Soon, bolstered both by the new musket technology and naval support, the Bengal army came to be widely regarded. The well-disciplined sepoys attired in red-coats and their British officers began to arouse "a kind of awe in their adversaries. In Maharashtra and in Java, the sepoys were regarded as the embodiment of demonic forces, sometimes of antique warrior heroes. Indian rulers adopted red serge jackets for their own forces and retainers as if to capture their magical qualities."

In 1796, under pressure from the Company's Board of Directors in London, the Indian troops were reorganized and reduced during the tenure of John Shore as Governor-General. However, the closing years of the 18th century saw, with Wellesley's campaigns, a new increase in the army strength. Thus in 1806, at the time of the Vellore Mutiny, the combined strength of the three presidencies' armies stood at 154,500, making them one of the largest standing armies in the world.

! bgcolor="#DDDDDD" colspan="4" | East India Company armies on the eve of the Vellore Mutiny of 1806
Presidencies British troops Indian troops Total
Bengal 7,000 57,000 64,000
Madras 11,000 53,000 64,000
Bombay 6,500 20,000 26,500
Total 24,500 130,000 154,500

As the East India Company expanded its territories, it added irregular "local corps," which were not as well trained as the army. In 1846, after the Second Anglo-Sikh War, a frontier brigade was raised in the Cis-Sutlej Hill States mainly for police work; in addition, in 1849, the "Punjab Irregular Force" was added on the frontier. Two years later, this force consisted of "3 light field batteries, 5 regiments of cavalry, and 5 of infantry." The following year, "a garrison company was added, ... a sixth infantry regiment (formed from the Sind Camel Corps) in 1853, and one mountain battery in 1856." Similarly, a local force was raised after the annexation of Nagpur in 1854, and the "Oudh Irregular Force" was added after Oudh was annexed in 1856. Earlier, as a result of the treaty of 1800, the Nizam of Hyderabad had begun to maintain a contingent force of 9,000 horse and 6,000 foot which was commanded by Company officers; in 1853, after a new treaty was negotiated, this force was assigned to Berar and stopped being a part of the Nizam's army.

! bgcolor="#DDDDDD" colspan="10" | East India Company armies on the eve of the Indian rebellion of 1857
Presidencies British troops Indian troops
Cavalry Artillery Infantry Total Cavalry Artillery Sappers
Infantry Total
Bengal 1,366 3,063 17,003 21,432 19,288 4,734 1,497 112,052 137,571
Madras 639 2,128 5,941 8,708 3,202 2,407 1,270 42,373 49,252
Bombay 681 1,578 7,101 9,360 8,433 1,997 637 33,861 44,928
Local forces
6,796 2,118 23,640 32,554
" "
Military police 38,977
Total 2,686 6,769 30,045 39,500 37,719 11,256 3,404 211,926 311,038
Grand Total, British and Indian troops 350,538

In the Indian Rebellion of 1857 almost the entire Bengal army, both regular and irregular, revolted. It has been suggested that after the annexation of Oudh by the East India Company in 1856, many sepoys were disquieted both from losing their perquisites, as landed gentry, in the Oudh courts and from the anticipation of any increased land-revenue payments that the annexation might augur. With British victories in wars or with annexation, as the extent of British jurisdiction expanded, the soldiers were now not only expected to serve in less familiar regions (such as in Burma in the Anglo-Burmese Wars in 1856), but also make do without the "foreign service," remuneration that had previously been their due, and this caused resentment in the ranks. The Bombay and Madras armies, and the Hyderabad contingent, however, remained loyal. The Punjab Irregular Force not only didn't revolt, it played an active role in suppressing the mutiny. The rebellion led to a complete reorganization of the Indian army in 1858 in the new British Raj.

Trade: 1770-1860

After gaining the right to collect revenue in Bengal in 1765, the Company largely ceased importing gold and silver, which it had hitherto used to pay for goods shipped back to Britain. In addition, as under Mughal rule, land revenue collected in the Bengal Presidency helped finance the Company's wars in other part of India. Consequently, in the period 1760-1800, Bengal's money supply was greatly diminished; furthermore, the closing of some local mints and close supervision of the rest, the fixing of exchange rates, and the standardization of coinage, paradoxically, added to the economic downturn. During the period, 1780-1860, India changed from being an exporter of processed goods for which it received payment in bullion, to being an exporter of raw materials and a buyer of manufactured goods. More specifically, in the 1750s, mostly fine cotton and silk was exported from India to markets in Europe, Asia, and Africa; by the second quarter of the 19th century, raw materials, which chiefly consisted of raw cotton, opium, and indigo, accounted for most of India's exports. Also, from the late 18th century British cotton mill industry began to lobby the government to both tax Indian imports and allow them access to markets in India. Starting in the 1830s, British textiles began to appear in—and soon to inundate—the Indian markets, with the value of the textile imports growing from £5.2 million 1850 to £18.4 million in 1896. The American Civil War too would have a major impact on India's cotton economy: with the outbreak of the war, American cotton was no longer available to British manufacturers; consequently, demand for Indian cotton soared, and the prices soon quadrupled. This led many farmers in India to switch to cultivating cotton as a quick cash crop; however, with the end of the war in 1865, the demand plummeted again, creating another downturn in the agricultural economy.

At this time, the East India Company's trade with China began to grow as well. In the early 1800s demand for Chinese tea had greatly increased in Britain; since the money supply in India was restricted and the Company was indisposed to shipping bullion from Britain, it decided upon opium, which had a large underground market in China and which was grown in many parts of India, as the most profitable form of payment. However, since the Chinese authorities had banned the importation and consumption of opium, the Company engaged them in the First Opium War, and at its conclusion, under the Treaty of Nanjing, gained access to five Chinese ports, Guangzhou, Xiamen, Fuzhou, Shanghai, and Ningbo; in addition, Hong Kong was ceded to the British Crown. Towards the end of the second quarter of the 19th century, opium export constituted 40% of India's exports.

Another major, though erratic, export item was indigo dye, which was extracted from natural indigo, and which came to be grown in Bengal and northern Bihar. In late 17th and early 18th century Europe, blue apparel was favored as a fashion, and blue uniforms were common in the military; consequently, the demand for the dye was high. In 1788, the East India Company offered advances to ten British planters to grow indigo; however, since the new (landed) property rights defined in the Permanent Settlement, didn't allow them, as Europeans, to buy agricultural land, they had to in turn offer cash advances to local peasants, and sometimes coerce them, to grow the crop. The European demand for the dye, however, proved to be unstable, and both creditors and cultivators bore the risk of the market crashes in 1827 and 1847. The peasant discontent in Bengal eventually led to the Indigo rebellion in 1859-60 and to the end of indigo production there. In Bihar, however, indigo production continued well into the 20th century; the centre of indigo production there, Champaran district, became the staging ground, in 1917, for Mohandas Karamchand Gandhi's first experiment in non-violent resistance against the British Raj.


Beginning with the Mayor's Court, established in 1727 for civil litigation in Bombay, Calcutta, and Madras, justice in the interior came under the company's jurisdiction. In 1772 an elaborate judicial system, known as adalat, established civil and criminal jurisdictions along with a complex set of codes or rules of procedure and evidence. Both Hindu pandits and Muslim qazis (sharia court judges) were recruited to aid the presiding judges in interpreting their customary laws, but in other instances, British common and statutory laws became applicable. In extraordinary situations where none of these systems was applicable, the judges were enjoined to adjudicate on the basis of "justice, equity, and good conscience." The legal profession provided numerous opportunities for educated and talented Indians who were unable to secure positions in the company, and, as a result, Indian lawyers later dominated nationalist politics and reform movements.


Education for the most part was left to the charge of Indians or to private agents who imparted instruction in the vernaculars. But in 1813, the British became convinced of their "duty" to awaken the Indians from intellectual slumber by exposing them to British literary traditions, earmarking a paltry sum for the cause. Controversy between two groups of Europeans - the "Orientalists" and "Anglicists" - over how the money was to be spent prevented them from formulating any consistent policy until 1835 when William Cavendish Bentinck, the governor-general from 1828 to 1835, finally broke the impasse by resolving to introduce the English language as the medium of instruction. English replaced Persian in public administration and education.

Social Reform

The company's education policies in the 1830s tended to reinforce existing lines of socioeconomic division in society rather than bringing general liberation from ignorance and superstition. Whereas the Hindu English-educated minority spearheaded many social and religious reforms either in direct response to government policies or in reaction to them, Muslims as a group initially failed to do so, a position they endeavored to reverse. Western-educated Hindu elites sought to rid Hinduism of its much criticized social evils: the caste system, child marriage, and sati. Religious and social activist Ram Mohan Roy (1772-1833), who founded the Brahmo Samaj (Society of Brahma) in 1828, displayed a readiness to synthesize themes taken from Christianity, Deism, and Indian monism, while other individuals in Bombay and Madras initiated literary and debating societies that gave them a forum for open discourse. The exemplary educational attainments and skillful use of the press by these early reformers enhanced the possibility of effecting broad reforms without compromising societal values or religious practices.

Infrastructure Development

The 1850s witnessed the introduction of the three "engines of social improvement" that heightened the British illusion of permanence in India. They were the railroads, the telegraph, and the uniform postal service, inaugurated during the tenure of Dalhousie as governor-general. The first railroad lines were built in 1850 from Howrah (Haora, across the Hughli River from Calcutta) inland to the coalfields at Raniganj, Bihar, a distance of 240 kilometers. In 1851 the first electric telegraph line was laid in Bengal and soon linked Agra, Bombay, Calcutta, Lahore, Varanasi, and other cities. The three different presidency or regional postal systems merged in 1854 to facilitate uniform methods of communication at an all-India level. With uniform postal rates for letters and newspapers - one-half anna and one anna, respectively (sixteen annas equalled one rupee) - communication between the rural and the metropolitan areas became easier and faster. The increased ease of communication and the opening of highways and waterways accelerated the movement of troops, the transportation of raw materials and goods to and from the interior, and the exchange of commercial information.

The railroads did not break down the social or cultural distances between various groups but tended to create new categories in travel. Separate compartments in the trains were reserved exclusively for the ruling class, separating the educated and wealthy from ordinary people. Similarly, when the Sepoy Rebellion was quelled in 1858, a British official exclaimed that "the telegraph saved India." He envisaged, of course, that British interests in India would continue indefinitely.

Features of Company Rule

See also



Contemporary general histories

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                        Articles in journals or collections

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