Regulating Act 1773

Table of Contents

The Regulating Act 1773

The Regulating act of 1773 was an act passed by the British Parliament to regulate the activities of East India Company in the Bengal area of India. Chartered on 31st December 1600, the East India company whose original name was ‘United Company Of Merchants Of England Trading To The East Indies’, had created immense fortune for itself after the victory in the Battle Of Plassey in 1757. The Regulating Act of 1773 was enacted primarily for 2 reasons:

The monopoly in Indian trade and the riches gained were becoming a threat to the other businesses and the government in England. With strong financial clout, the company was influencing government policies.
The company faced a financial crisis after the loss of tea trade from the USA in 1768.

The Regulating Act is significant because it marked the beginning of the end of East India Company’s political affairs in India. The process was finally completed after the Revolt of 1857 and the passing of Government of India Act 1858.

Provisions of Charter Act of 1773

The Regulating Act of 1773 included the following provisions:

The Act established a system of dual government for the East India Company’s territories in India, with the appointment of a Governor-General and four Councillors to oversee the administration of the territories. Thus the Governor of Bengal Warren Hastings (who’s successor Charles Cornwallis initiated the Permanent Settlement system) was made Governor General of Bengal.
All decisions were to be taken by majority and the Governor general could vote only in case of a tie.
Bombay and Madras Presidencies were subsumed under Bengal. Thus the foundation of a centralized administration was created.
The Act provided for the establishment of a Supreme Court at Fort William at Calcutta to hear civil and criminal cases, and gave the Crown the power to appoint and remove the Governor-General and the Councillors. British judges were to be sent to India to administer justice based on the British legal system.
The Regulating Act 1773 gave the Governor-General and the Councillors the authority to make laws and regulations for the good government of the territories, subject to the approval of the Crown.
The Act required the East India Company to submit annual reports to the British government on the administration and financial affairs of its territories in India.

This Act granted the British government the power to appoint and remove the Directors of the East India Company, and required them to be responsible to the Crown for the administration of the Company’s territories in India.
The Act required the East India Company to pay an annual sum of £400,000 to the British government, and prohibited the Company from engaging in any trade or commerce other than in its territories in India.
The Act provided for the appointment of a committee of Privy Councillors to oversee the administration of the East India Company’s territories in India, and granted them the power to issue instructions to the Governor-General and the Councillors.
It also restricted the term of the Court of Directors to four years.
The Act also limited the company’s dividends to 6% until it pays back a loan of £ 1.5 million.
It permitted the company to keep its territorial possessions in India.
This act also prohibited the company officials from engaging in private trade and receiving any bribes or presents from the natives.

Defects

The Governor General was not given any veto powers resulting in delays in decision making.
Indian opinion and concerns were neglected.
The Act was unable to stop the rampant corruption among the company officials.
There were no well defined powers of the Supreme Court.
The Parliamentary control envisaged in the Act was not effective as there was no mechanism for studying and auditing the reports sent by the Governor General in Council.

Background of Regulating Act 1773

The Regulating Act of 1773 was passed in response to a series of financial and administrative scandals that had plagued the East India Company, a British trading company that was chartered in 1600 and held a monopoly on trade with the East Indies. The Company had been granted the right to self-govern its territories in India, and had largely been left to its own devices by the British government. After obtaining permission from the Mughal emperor Jahangir to trade in India, the company started growing. In doing so it also had to confront other European rivals like the French, Dutch and Portuguese.

However, a series of abuses and mismanagement by the Company, including the widespread corruption of its employees, had led to public outrage and calls for reform. The Company had also accumulated significant debts, and was in financial trouble. The loss of tea trade from America compounded the problem. In response to these issues, the British government passed the Regulating Act in an attempt to reform the administration of the Company’s territories in India and restore public confidence in the Company.

Regulating Act 1773 UPSC

The Regulating Act of 1773 is an important piece of legislation in the history of British India, and it is likely to be covered in the Indian Civil Services (IAS) exam, which is conducted by the Union Public Service Commission (UPSC). The topic has a potential of being asked in Prelims as well as Mains exam. The ICS exam, which is also known as the Civil Services Examination (CSE), is a highly competitive exam that is held annually in India to select candidates for various civil service positions in the Indian government.

An in-depth knowledge of this act will help candidates in understanding the evolution of the Constitution of India since it is the 1st act for constitutional development in India. In the CSE, candidates are required to demonstrate a broad range of knowledge on a variety of topics, including Indian history, politics, economics, and current affairs. As such, it is likely that the Regulating Act of 1773 will be covered in one or more of the exam’s papers, particularly in the history and/or the governance and public policy sections.

It is important for CSE candidates to have a good understanding of the Regulating Act of 1773, as well as its significance in the history of British India and its impact on the development of the British Raj in India. This will help candidates to better understand the broader context of India’s history and the evolution of its governance and political system, and to better analyse and evaluate contemporary issues and challenges facing the country.

Conclusion

The Regulating Act of 1773 was a legislation passed by the British Parliament in 1773 to reform the administration of the East India Company’s territories in India. It was the first in a series of acts that sought to overhaul the company’s governance in India and bring it under the control of the British Crown.

At the time, there was growing concern in Britain over the mismanagement and corruption in the company’s territories in India, which had resulted in a number of financial and administrative problems.

The act was intended to address these problems by establishing a new system of governance for the company’s territories in India, and by giving the British government greater oversight and control over the company’s operations. It was the first in a series of acts that sought to bring the company’s territories in India under the control of the British Crown, and to establish a more orderly and efficient system of administration in the region.

Overall, the act was seen as an important step in the process of bringing the East India Company’s territories in India under the control of the British Crown, and laying the foundation for the eventual establishment of British rule in India.

FAQs

Who introduced Regulating Act 1773?

The act was introduced by Frederick North on 18th May 1773 and got a royal accent on 10th June 1773. Its territorial extent included Bengal, Madras and Bombay Presidencies.

Why was the Regulating Act 1773 passed?

The Regulating Act of 1773 was passed by the British Parliament in an attempt to reform the administration of the East India Company’s territories in India.