Company Rule

The British East India Company, established in 1600, came to India initially for trade but gradually became the political ruler of vast territories. Between the mid-18th and mid-19th centuries, India came under the direct control of the Company through wars, alliances, and annexations. This period is known as the Company Rule (1757–1858).

Establishment of Company’s Political Power

• Battle of Plassey (1757): Robert Clive defeated Siraj-ud-Daulah, Nawab of Bengal; British became political masters of Bengal.

• Battle of Buxar (1764): British defeated combined forces of Mir Qasim (Bengal), Shuja-ud-Daulah (Awadh), and Mughal emperor Shah Alam II.

  • Secured Diwani rights (revenue collection) of Bengal, Bihar, and Orissa.

• Gradual territorial expansion through wars with Mysore, Marathas, Sikhs, and use of the Subsidiary Alliance system (introduced by Lord Wellesley).

• Doctrine of Lapse (Lord Dalhousie): Annexed states without a male heir (e.g., Satara, Jhansi, Nagpur).

Administration under Company Rule

• The Company transformed from traders to rulers.

• Dual Government in Bengal (1765–1772): Company collected revenue but left administration to Nawabs, leading to chaos; ended by Warren Hastings.

• Governor-General and Governors: Centralized authority, with councils for advice.

• Judicial reforms under Warren Hastings, Cornwallis, and later Lord Bentinck created new courts.

• Introduction of British laws and codes weakened traditional judicial systems.

Economic Impact

• Revenue settlements:

  • Permanent Settlement (1793, Cornwallis) in Bengal — fixed revenue demanded from zamindars.

  • Ryotwari System (Madras, Bombay) — revenue collected directly from cultivators.

  • Mahalwari System (North-West provinces, Punjab) — revenue collected from village communities.

• Heavy taxation caused peasant distress, famines, and decline of agriculture.

• Traditional industries, especially textiles, collapsed due to British imports.

• India became a supplier of raw materials and a market for British goods.

Social and Cultural Policies

• Spread of Western education (Macaulay’s Minute, 1835).

• Introduction of English language as medium of higher education.

• Social reforms under British influence:

  • Abolition of Sati (1829) by Lord Bentinck (with support of Raja Ram Mohan Roy).

  • Widow Remarriage Act (1856).

  • Efforts to reduce child marriage and promote women’s education.

Resistance to Company Rule

• Numerous revolts: Sanyasi and Fakir revolts, Polygar rebellions, Vellore mutiny (1806), Santhal revolt (1855–56), tribal and peasant uprisings.

• The discontent culminated in the Revolt of 1857, the first major war of independence against Company rule.

End of Company Rule

• The Revolt of 1857 exposed the weaknesses and oppression of Company administration.

• By the Government of India Act, 1858, the British Crown took over direct administration of India.

• The title of Governor-General changed to Viceroy of India.

Key Takeaway

• The Company Rule (1757–1858) marked the transition of the East India Company from traders to rulers.

• Through wars, alliances, and annexations, the Company established political control but exploited India’s economy.

• Social changes and economic drain created resentment, leading to revolts and finally the end of Company Rule after 1857, beginning the direct rule of the British Crown.