Answer: In the period of dual government i.e., 1765-1772, the Indian officials under the overall control of the British governor and British officials had ‘responsibility but no power’ while the company officials had ‘power but no responsibility’. This presented problems of exploitation of powers & rampant corruption and also attracted the jealousy of other sections of British society, especially politicians and merchants who wanted to be a part of the huge profit being generated in India. The question of the nature of relations between the East India Company (EIC) and its possessions with the government in Britain was therefore subsequently settled through incremental acts & regulations, such as: Regulating Act, 1773:

• It recognised, for the first time, the political and administrative functions of the Company.
• It strengthened the control of the British Government over the Company by requiring the Court of Directors (governing body of the Company) to report on its revenue, civil, and military affairs in India.
• The Governor of Bengal was made the Governor-General of Bengal and the governors of Madras and Bombay were made subordinate to him.
• It prohibited the servants of the Company from engaging in any private trade or accepting presents or bribes from the natives.

Pitt’s India Act, 1784:

• It distinguished between the commercial and political functions of the Company and for the first time the company’s territories in India were identified as British possessions.
• It allowed the Court of Directors (EIC representative) to manage the commercial affairs but created a new body called Board of Control (represented by the British government) to manage the political affairs. Thus, it established a system of double government or Dual Control.
• It empowered the Board of Control to supervise and direct all operations of the civil and military government or revenues of the British possessions in India.

Charter Act, 1793:

• It was aimed at reviewing the Charter granted to EIC by the Regulating Act of 1773.
• It continued the trade monopoly of EIC for another 20 years, however, the Company was asked to pay 5 lakh pounds annually from the Indian revenues to the British government (after paying its necessary expenses).
• It separated revenue administration and judicial functions of the Company and hence led to the disappearance of Maal Adalats (revenue courts).
• Senior officials of the Company were debarred from leaving India without permission.
• It laid down that the members of the Board of Control and their staff were to be paid out of the Indian revenues. This practice continued till 1919 and was one of the major reasons behind the drain of wealth.

Charter Act, 1813: The company’s rule was extended to another 20 years. However, their trade monopoly was ended except for the trade in tea, opium, and with China. Charter Act, 1813:

• This Act was the final step towards centralization of India’s administration.
• It ended all commercial activities of the EIC including monopoly over trade with China and in tea.
• The post of the Governor-General of India was created and he was entrusted with legislative power over the entire British India. All revenues were raised under his authority and he had complete control over the expenditure too. Now, the power to superintend, control and direct all civil and military affairs of the Company was under him.

Thus, various acts of the Parliament completely subordinated the company and its Indian administration to the British Government. This allowed the British to create a new system of administration to serve their purposes.