Regulating Act: Introducing Administrative Reforms in India

The Regulating Act of 1773 was introduced to establish a central administrative system in British India. The act was enacted to regulate the activities of the British East India company.

The act was an initiative of the British parliament to introduce an administrative reform in British India. The regulating act took over the British system of administration.

Under the regulating act, the British East India Company performed all its administrative functions under the British parliament’s supervision and submitted reports on revenue, civil, and military functions of the company to the court of directors.

Circumstances leading to Regulating Act 1773

The system of dual government introduced in 1765 by Robert Clive and in force till 1772 failed miserably and resulted in many problems and the establishment of a corrupt government.

The Battle of Plassey and the Battle of Buxar led to the establishment of the East India Company in India. The system of dual governance was introduced by Robert Clive after he became the governor-general of Bengal in May 1765.

  • Robert Clive made Awadh establishment a buffer state due to its crucial location between Maratha and British territories.
  • Robert Clive restored Shuja-Ud-Daulah as the Nawab of Awadh after the Battle of Buxar, placing a condition of paying 50 lakh rupees as an annual tax on the part of Nawab.
  • Robert Clive made a treaty with Shah Alam II, which would allow him to remain the emperor of Delhi.
  • As per the settlement with the Mughal emperor Shah Alam II, the Diwani rights of the territories of Bengal, Bihar, and Odisha, which were to the north of river Swarna Rekha, were conferred upon Britishers.
  • The company gained the right to collect revenue from all these three states.
  • The company was to pay 26 lakh rupees to the Mughal emperor in return for these Diwani rights.
  • Robert Clive placed Nizam-Ud-Daula, the son of Mir Jafar, as the new Nawab of Bengal to handle the administration of Bengal, but he had no actual powers.
  • If Britishers had taken unofficial control of Bengal, then it could result in diplomatic tensions. Clive handed used this method to put up a display that a local authority is in power
  • The Nawab of Bengal used to receive 53 lakh rupees annually from the British administration.

The revenue given to the nawab was not adequate to administer law and order. He also did not have any economic resources as the Company collected the revenue. According to the dual system government, the British had political and economic powers but did not have administrative responsibilities. They had absolute military power and the right to collect revenue in Bengal.

This dual nature of power caused many problems for the Nawab. He had to supervise the administration, the criminal justice system, and law and order maintenance without any real power. Corruption among officials increased as the revenue collected by officials was not managed or recorded correctly. The unreasonable tax structure by Britishers led to huge losses to peasants. Neither the Nawab nor the Company paid attention to the plight of peasants.

Trade became too costly for the merchants, and handloom businesses was destroyed. Subsequently, the administration and the dual system collapsed. This system was abolished and brought under the purview of a regulating body and laws for the administration’s regulation.

The Regulating Act of 1773 was of great importance in increasing control over a company.

Objectives of the Regulating Act

The previous administration system led to the representation of the East India Company as a sovereign political entity, and it was abolished by the British parliament.

The Regulating Act of 1773 abolished the administration system in India, the dual system of government, and the issues created by it. The act had the following objectives:

  • Addressing the problem of management of the company in India
  • Address the issue of the dual system of governance.
  • Regulate the company representing itself as a semi-sovereign political entity instead of being a business entity
  • Establishment of the Supreme Court at Calcutta
  • Introduce the office of governor-general of all British territories in India
  • Increased control over East India Company by the court of directors situated in England.
  • A prohibition from involving in any private trade
  • A prohibition from accepting bribes and gifts from local people
  • Provide the British Crown the power to control over the Indian affairs.

Importance of the Regulating Act

The Regulating Act of 1773 ensured a supreme body for both administration and adjudication machinery in India. The establishment of the Supreme Court at Calcutta resulted in proper management of judicial functions.

The establishment of an office of governor-general at fort Williams, Calcutta, enforced its supreme authority for managing the administerial functions of the British Crown in India. Only the governor-general of Bengal could issue directions related to either declaring war or negotiating a treaty.

The presidencies of Bombay and Madras were subordinate to the governor-general and his council at Calcutta.

The act gave the powers to the crown to regulate the arbitrary conduct of the East India Company. A system was introduced to prevent the government officials in India from being corrupt or from accepting bribes and gifts from local people.

Defects in the Regulating Act 1773

The act also had some disadvantages related to its operation and implementation:

  • The act rendered the Governor-General without any veto power. He was overruled most of the time by the majority decision of the members of his council. He was responsible for all his acts to the court of directors and answerable for the administrative decisions taken in India.
  • The governors of Bombay and Madras presidencies were subordinate and ultimate powers were laid in the governor’s hands. It led to debilitation of administration at subordinate levels and persistence of corruption.
  • The provisions regarding the powers and jurisdictional issue of the Supreme Court at fort Williams were vague and defective. It did not specify the division of powers of the governor-general and the supreme court. Company officials’ conduct was under the supreme court’s purview, resulting in tensions between the governor-general and the apex court
  • The act did not elaborate on the status or concern of people of India paying revenue to the East India Company.
  • The parliament was ineffective in scrutinizing reports sent by the governor-general.

How were the defects of the Regulating Act removed?

The settlement act of 1781 removed the jurisdictional issue and following issues:

  • The jurisdictional issues of the Supreme Court were addressed. The company’s officials were removed from the ambit of the Supreme Court, and its geographical jurisdiction was limited to Calcutta only.
  • The jurisdiction of revenue matters was kept in the hands of the governor-general and not in the court’s jurisdiction.
  • The appeals from provincial courts could be addressed by the governor-general and council instead of the supreme court, as was done previously.
  • This act asserted the use of particular religious laws in case of Hindu and Mohammedan cases.


These acts were of great importance in reforming the administration and judicial aspects in India. The regulating act brought the system of central administration and parliament control with the Supreme court acting as a supreme judicial body.

The regulating act depicted the status of the central government under the control of parliament for all its acts, and all central government decisions were taken by the majority. The act prevented the governor-general from taking any arbitrary decision by involving relevant parties in the decision-making process.


Who was the first governor-general of Bengal?

Warren Hasting was the first governor-general of Bengal and was appointed in 1773.

When was the dual system of government abolished?

The dual system of government was abolished in 1772.

Which act brought in significant amendments in the regulating act to resolve the jurisdictional issue between the Supreme Court and Governor-General?

The Settlement Act, 1781, resolved the jurisdictional issue.

The title of ‘governor of the presidency fort William’ was officially converted to ‘governor-general of India’ in which year?

The title was converted by passing an act in 1833.

What are the terms Nizamat rights and Diwani rights?

Nizamat rights are the judicial and policing rights, whereas Diwani rights are the rights to collect revenue.

Constitutional law