Module 20. India under Company Rule – Administration, Judiciary, Economy, Society

The period of Company Rule in India, extending from 1773 to 1858, marked a transformative era in Indian history. This phase began with the assumption of administrative powers by the British East India Company following the Battle of Plassey (1757) and the Battle of Buxar (1764). The Company’s rule introduced significant changes in the country’s administration, judiciary, economy, and society, laying the foundation for British colonial governance.

Administrative Structure under the Company

The East India Company initially operated as a trading corporation but gradually evolved into a political authority. The administrative system underwent continuous reforms to consolidate British control and ensure efficient governance.
The Regulating Act of 1773 was the first major step taken by the British Parliament to bring the Company’s activities under supervision. It established the office of the Governor-General of Bengal, with Warren Hastings as the first incumbent, and created an executive council to assist him. Subsequently, Pitt’s India Act of 1784 introduced dual control, dividing authority between the British Government and the Company through the Board of Control in London.
By the Charter Acts (of 1813, 1833, and 1853), the administrative machinery became increasingly centralised. The Governor-General of Bengal became the Governor-General of India in 1833, symbolising the unification of administrative authority. The civil services were formalised with the introduction of merit-based recruitment, which was later opened to Indians only in theory but remained practically limited to Europeans.
The Company maintained a vast bureaucracy, headed by British officers and supported by Indian subordinates known as munshis, diwans, and clerks. The administrative system was primarily aimed at maintaining law and order, collecting revenue, and protecting British commercial interests.

Evolution of the Judicial System

The judicial structure under Company Rule underwent systematic development to establish British legal principles in India. The Regulating Act of 1773 created a Supreme Court of Judicature at Calcutta in 1774, which applied English law to British subjects and certain categories of Indians. This system often clashed with the traditional courts operating under indigenous legal systems.
To address this, Warren Hastings introduced the Adalat system, comprising Diwani Adalats (civil courts) and Faujdari Adalats (criminal courts). These courts applied Hindu and Muslim laws in civil matters, depending on the religion of the litigants, while criminal law was based on Islamic principles.
Lord Cornwallis’s Judicial Reforms of 1793 introduced significant changes, separating the judiciary from the executive and bringing greater uniformity to the system. The Cornwallis Code established a hierarchy of civil and criminal courts, presided over by European judges, thus marginalising Indian judicial officers. Over time, British laws gradually replaced indigenous systems, creating a uniform yet foreign legal framework.

Economic Impact and Transformation

The economic policies of the East India Company were primarily guided by mercantilist objectives, aimed at maximising profits and ensuring the economic dominance of Britain. The Company transformed India’s self-sufficient agrarian economy into a colonial economy serving British industrial interests.
The Permanent Settlement of 1793, introduced by Lord Cornwallis in Bengal, created a new class of zamindars as hereditary landowners responsible for revenue collection. This system benefited landlords but burdened peasants, leading to widespread rural distress. Other regions were subjected to the Ryotwari System (in Madras and Bombay Presidencies) and the Mahalwari System (in North-Western Provinces), each with varying degrees of state intervention.
India became a major supplier of raw materials such as cotton, indigo, jute, and opium, while British manufactured goods flooded the Indian market. The destruction of indigenous industries, particularly the textile sector, led to large-scale unemployment and deindustrialisation. The drain of wealth from India to Britain, famously termed the “Drain Theory” by Dadabhai Naoroji, became a defining feature of colonial economic exploitation.
The construction of railways, telegraphs, and canals during the later years of Company Rule was undertaken mainly to facilitate British trade and military movement rather than to promote Indian development.

Changes in Indian Society

The Company’s rule brought profound social and cultural transformations, though often with unintended consequences. Initially, the British maintained a policy of non-interference in social and religious matters. However, with the advent of Evangelical and Utilitarian influences in the early nineteenth century, reformist interventions began.
Social reforms such as the abolition of Sati (1829) by Lord William Bentinck, the suppression of Thuggee, and the legalisation of widow remarriage (1856) reflected both humanitarian motives and the growing confidence of British moral superiority. Western education was introduced under Macaulay’s Minute (1835) and the English Education Act, promoting English as the medium of instruction and producing a class of educated Indians to serve the colonial administration.
At the same time, the Indian social fabric underwent tension and change. Traditional caste hierarchies and religious customs were challenged by new ideas of rationalism and reform. The Brahmo Samaj, Prarthana Samaj, and Young Bengal Movement emerged as platforms for social and intellectual awakening.
The introduction of English education also contributed to the rise of a new Indian middle class, which later played a crucial role in the emergence of Indian nationalism.

Political Control and Military Organisation

The military served as the backbone of Company authority. The Company’s Army comprised both British and Indian soldiers, the latter known as sepoys. Indian troops formed the bulk of the army but were commanded by British officers. Racial discrimination, religious insensitivity, and the disregard for native traditions gradually created discontent among the sepoys, which ultimately culminated in the Revolt of 1857.
Politically, the Company adopted both military conquest and diplomatic manipulation to expand its territory. Policies such as the Subsidiary Alliance (1798) introduced by Lord Wellesley and the Doctrine of Lapse under Lord Dalhousie facilitated British annexation of Indian states.
By the mid-nineteenth century, the Company had brought most of the Indian subcontinent under its control. The political fragmentation of India, coupled with superior British military and administrative efficiency, ensured the success of colonial expansion.

Legacy of Company Rule

The East India Company’s rule ended after the Revolt of 1857, which exposed the weaknesses and injustices of Company administration. The Government of India Act of 1858 transferred authority from the Company to the British Crown, inaugurating the period of direct British rule under the British Raj.
The legacy of Company Rule was paradoxical. While it laid the foundations of modern administration, law, and education, it also impoverished the Indian economy and disrupted traditional society. The institutions established during this period—civil services, judiciary, and bureaucracy—continued to shape India’s governance in the subsequent colonial and post-colonial eras.