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The Regulating Act Of 1773

The Regulating Act Of 1773


  • The regulating Act of 1773 was passed by the British Parliament to control the territories of the East India Company majorly in Bengal.
  • This act was passed due to the misgovernment by the British East India government that introduced a situation of bankruptcy and the government had to interfere with the affairs of the Company.

Significance Of The Act

This act was of great constitutional importance as:

  • it was the first step taken by the British Government to control and regulate the affairs of the East India Company in India;
  • it recognised, for the first time, the political and administrative functions of the Company; and
  • it laid the foundations of central administration in India.

Circumstances that led to Regulating Act 1773

  • The battle of Plassey (1757) and the Battle of Buxar (1764-65) led to firm establishment of territorial dominance of East India Company in India.
  • At that time, their territories in the country included parts of current states of Maharashtra, Gujarat, Goa, Karnataka, Tamil Nadu, Orissa, West Bengal, Bihar and Uttar Pradesh.
  • With these two important wars, the Nawab of Awadh became their ally while Mughal emperor Shah Alam became their pensioner.
  • Bengal and Bihar came under the dual system of administration of Clive whereby company got Diwani rights or the Fiscal administration rights while Nizamat (territorial) jurisdiction was with the puppet nawabs.

Issues with the system

However, this system had various problems which ultimately led to the Regulating Act 1773. These are as follows:

  • This system not only created confusion but also left the people hapless against oppression by both company and nawabs. The British parliament could not remain a mute spectator and thus regulation of the trading company was necessitated.                  The Regulating Act Of 1773
  • The servants of the company had become corrupt. Many of them retired and took away heaps of wealth to England and lived like Indian Nawabs, thus correctly nicknamed “English Nawabs” in England. In 1772, a secret parliamentary committee reported that the servants of the company including Clive had received large sums, Jagirs etc.
  • The corruption was so much prevalent that the servants of the company led it on the brink of financial bankruptcy in early 1770s. Further, the famine of 1770 also reduced the revenue. In August 1772, the East India Company applied for a loan of One Million Pounds to the British government.
  • This was enough for the parliament to grab the opportunity, cross examine the doings of the company and its officials and then enact a legislation to regulate its affairs.

Features of this Act

  • It designated the Governor of Bengal as the ‘Governor- General of Bengal’ and created an Executive Council of four members to assist him. The first such Governor General was Lord Warren Hastings.
  • It made the governors of Bombay and Madras presidencies subordinate to the governor-general of Bengal, unlike earlier, when the three presidencies were independent of one another.
  • It provided for the establishment of a Supreme Court at Calcutta (1774) comprising one chief justice and three other judges.              The Regulating Act Of 1773
  • It prohibited the servants of the Company from engaging in any private trade or accepting presents or bribes from the ‘natives’.
  • 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.

Defects of Regulating Act 1773

The major drawbacks of The Regulating Act of 1773 are stated below:

  • It did not address the concerns of the Indian population who were paying revenue to the company.
  • The Governor-General had no veto power.
  • The Supreme Court’s powers were not well-defined.                          The Regulating Act Of 1773
  • It did not stop corruption among the company officials.
  • The parliamentary control that was sought in the activities of the company proved to be ineffective as there was no mechanism to study the reports sent by the Governor-General in Council.


Indian Polity

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