In the 18th century, after securing victories in Bengal, Mysore, Carnatic, and against the Marathas, the East India Company established its dominion over large swathes of India. Their initial goal, during what's known as the "Commercial Phase," was simple: maximize revenue with minimal military entanglement. But this wasn't just about trade; it was about laying the groundwork for a vast colonial empire. Their administrative policies were designed for maximum revenue extraction with minimal governance responsibility. A pivotal move was the implementation of "Dual Government" in Bengal post-Treaty of Allahabad. This system left the Nawab as the titular head, but all real power and revenue collection shifted to the Company. This cunning facade allowed the British to extract wealth without appearing to directly challenge native rulers, cleverly averting early large-scale revolts from other Indian states.
However, this dual system had devastating consequences. With no real power, the Nawabs couldn't invest in public welfare like roads or canals, leading to agricultural decline and increased taxation. The result? The catastrophic Bengal Famine of 1770, which wiped out an estimated one-third of Bengal's population – a direct consequence of the Company's exploitative policies. Upon his arrival, Governor-General Warren Hastings recognized this disaster and abolished the Dual Government, centralizing administrative power. He also streamlined trade by reducing customs duties to major trading hubs like Kolkata and Patna, benefiting both farmers and the Company. For revenue collection, he introduced land auctions, giving land to the highest bidders who then collected taxes from farmers, initially with a lump sum payment to the Company. Hastings also implemented significant judicial reforms, establishing civil (Diwani) and criminal (Faujdari) courts, with laws based on Hindu and Muslim personal codes respectively, and codified existing laws, though not in a modern sense.
The arrival of Lord Cornwallis marked a new era of extensive reforms. Having commanded British forces during the American Revolution, he aimed to establish a stable colonial rule in India. His most impactful reform was the "Permanent Settlement" in agriculture, making zamindars (landlords) the owners of land and responsible for collecting a fixed revenue from farmers, 10/11ths of which went to the Company. This move created a loyal class of zamindars who supported the British but severely exploited farmers. The infamous "Sunset Law" mandated that if zamindars failed to pay revenue by sunset on a specified date, their land would be confiscated. Cornwallis also stripped zamindars of judicial and police powers, centralizing them under collectors and superintendents of police. In civil services, he strengthened the position of the Collector, fixing high salaries and commissions to combat corruption, earning him the title "Father of Civil Services in India." His judicial reforms further organized the court system, establishing a hierarchy from Munsif Courts to the Sadar Diwani Adalat, with the ultimate appeal lying with the King-in-Council in London. He also humanized the legal system by abolishing brutal corporal punishments, standardizing law, and theoretically making all equal before it – though in practice, justice remained expensive and inaccessible to the poor, with special privileges for the elite. The economic policy of this period was brutally simple: drain wealth from India to Britain through free trade, pensions for officials, and using Bengal's revenue to buy Indian goods for European markets. Indian handicrafts and industries withered under the onslaught of European industrial goods. Socially, the Company remained largely hands-off, avoiding reforms that would require investment or disrupt existing caste and religious structures. Culturally, however, there was a calculated shift. The British began intensely studying India's past, establishing institutions like the Asiatic Society of Bengal (1784) and Calcutta Madrasa (1781), translating ancient texts to understand and better control Indian society, a strategy known as Orientalism. This laid the groundwork for imposing European ideas, framing British rule as a civilizing mission.
The British Parliament, driven by industrialist pressures at home, began to assert more control over the Company. The Regulating Act of 1773 aimed to curb corruption among Company officials and brought its financial, military, and economic reports under parliamentary scrutiny. It established the Governor-General position (starting with Warren Hastings) and a Supreme Court in Calcutta. The Pitt's India Act of 1784 further tightened this grip, reducing the Governor-General's council members for easier decision-making and creating a Board of Control with six British parliamentary members to oversee Company affairs. By 1813, with industrialization in Europe booming, the Company's trade monopoly in India was largely abolished, save for tea and trade with China. This era also saw the beginning of allocated funds for Indian education (to create consumers for European goods) and the propagation of Christianity, marking a decisive shift towards direct imperial control. The Commercial Phase was a period where a trading entity became a ruler, transforming India not just through conquest, but through a calculated dismantling of its self-sufficiency and a strategic reorientation of its society, setting the stage for even more profound changes in the future.
