Regulating Act, 1773 – Analysis – UPSC GS1

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Introduction
  • Act was passed by the British Parliament for the regulation of the British East India Company’s Indian territories, mainly in Bengal.
  • The Regulating Act of 1773 opened a new chapter in the constitutional history of the Company.
  • It was the first intervention by the British government in the company’s territorial affairs and marked the beginning of a takeover process that was completed in 1858.
Conditions which led to the Act
  • The Court of Directors were elected annually and practically managed the affairs of the Company. In India, each of the three presidencies was independent and responsible only to the Home Government. The government of the presidency was conducted by a Governor and a Council.
  • The English East India Company became a territorial power when it acquired a wide dominion in India and also the Diwani rights. Its early administration was not only corrupt but notorious. When the Company was in financial trouble, its servants were affluent.
  • The disastrous famine which broke out in Bengal in 1770 affected the agriculturists. As a result, the revenue collection was poor.
  • In short, the Company was on the brink of bankruptcy. In 1773, the Company approached the British government for an immediate loan.
  • It was under these circumstances that the Parliament of England resolved to regulate the affairs of the Company. Lord North, the Prime Minister of England, appointed a select committee to inquire into the affairs of the Company. The report submitted by the Committee paved the way for the enactment of the Regulating Act.
Provisions of the Act
The Regulating Act reformed the Company’s Government at Home and in India. The important provisions of the Act were:
  1. The term of office of the members of the Court of Directors was extended from one year to four years. One-fourth of them were to retire every year and the retiring Directors were not eligible for re-election.
  2. The Governor of Bengal was styled the Governor-General of Fort William whose tenure of office was for a period of five years.
  3. A council of four members was appointed to assist the Governor-General. The government was to be conducted in accordance with the decision of the majority. The Governor General had a casting vote in case of a tie.
  4. The Governor-General in Council was made supreme over the other Presidencies in matters of war and peace.
  5. Provision was made in the Act for the establishment of a Supreme Court at Calcutta consisting of a Chief Justice and three junior judges. It was to be independent of the Governor General in Council. In 1774, the Supreme Court was established by a Royal Charter.
  6. This Act prevented the servants of the Company including the Governor-General, members of his council and the judges of the Supreme Court from receiving directly or indirectly any gifts in kind or cash.
  7. In order to assert parliament’s control over the company, the directors were required to place regularly all their correspondence, regarding civil military affairs with the Indian authorities, before the secretary of the state in England.
  8. Act prohibited the servants of company from engaging in any private trade or accepting presents or bribes from the natives to curb corruption.
Merits of the Act
  1. It brought the affairs of the Company under the control of the Parliament.
  2. It proved that the Parliament of England was concerned about the welfare of Indians.
  3. It  put an end to the arbitrary rule of the Company and provided a framework for all future enactments relating to the governing of India.
Demerits of the Act
  1. The Governor-General was made powerless because the council which was given supreme power often created deadlocks by over-ruling his decision.
Assessment of the Act
  • There was nothing in the act which could address the people of India, who were paying revenue to the company but now were dying in starvation in Bengal, Bihar and Orissa.
  • The Regulating Act of 1773 is called the First step of Government Control in India. From 1773 onwards, the executive and judicial administration of the country was placed on a regular, though imperfect, footing by parliamentary act.
  • Provisions of the Act were also towards stopping corruption but it failed to do so.
  • Due to decision of council was to be by majority, many times decisions could not be taken as per Hasting as Governor General in Council was first among equal with no veto.
  • Another problem was regarding jurisdiction of Supreme Court. There were many confusions regarding its jurisdictions and also on whom its jurisdiction was applicable.
Many of the defects of Regulating Act, 1773 was rectified by the Pitt’s India Act of 1784.
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