Regulating Act: Introducing Administrative Reforms in India

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

It was an initiative of the British parliament to bring an administrative reform in British India.

The regulating act took over the British system of administration which failed ultimately under the control of the British Government.

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

Circumstances that led to Regulating Act 1773

The system of dual government introduced in 1765 by Robert Clive failed miserably. The dual system of government persisting from 1765 to 1772 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.

After the British East India Company won the battle of Buxar in 1765, the establishment of the dual system of government was done 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.
  • Without any concern, Robert Clive restored Shuja-Ud-Daulah as the Nawab of Awadh after the Battle of Buxar, placing a condition of paying fifty lakh rupees as an annual tax on the part of Nawab.
  • Robert Clive also made a treaty with Shah Alam II, which would let him remain the emperor of Delhi.
  • The Diwani rights of the territories of Bengal, Bihar and Odisha, which were to the north of river Swarna Rekha, got conferred upon the Britishers as per the settlement with the Mughal emperor Shah Alam II.
  • Diwani right means that the company will have the right to collect revenue from all these three states.
  • The company will pay twenty-six 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.
  • It would get considered a breach of diplomatic etiquette by the Britishers if they had taken unofficial control of Bengal and could result in international repercussions. That’s why Clive handed this method to show that a local authority is in power
  • The Nawab of Bengal used to receive fifty-three 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 had no 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.

The corruption among the officials increased as the revenue collected by officials were not managed or recorded correctly.

The unreasonable tax structure by Britishers led to the suffering of huge losses by peasants. Neither Nawab nor the Company paid attention to the affected peasants.

Trade became too costly for the merchants, and handloom businesses got destroyed.

Hence, the administration and the dual system collapsed.

It brought the need for abolishing this system and bringing it 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 needs to be 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. It has some key objectives.

  • Addressing the problem of management of the company in India
  • Address the issue of the dual system of governance.
  • to regulate the company which represented itself as a semi-sovereign political entity instead of being a business entity
  • Establishment of Supreme court at Calcutta
  • Introducing 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 gifs from local people
  • Served the British Crown the power to address 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, will denote it as the supreme authority for managing the administerial functions of the British Crown in India. Only the governor-general of Bengal can issue directions related to either declaring war or negotiating a treaty.

The presidencies of Bombay and madras are subordinate to the governor-general and his council situated at Calcutta.

It gave the powers to the crown to regulate the arbitrary conduct of the East India Company.

A system got 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

Besides having advantages, this act also had some disadvantages related to its operation and implementation. These are:-

  • 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 was silent on the status or concern of people of India who were paying revenue to the East Indian Company.
  • The parliament was ineffective in scrutinizing the reports sent by the governor-general.

How were the defects of the Regulating Act removed?

The settlement act of 1781 removed the jurisdictional issue. It aimed at

  • The jurisdictional issue of the supreme court got addressed. The company’s officials got removed from the supreme court’s jurisdiction ambit, and its geographical jurisdiction is 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 can 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 bringing reform in the administration and judicial aspects in India. The regulating act brought the system of central administration and parliament control with the concept of a supreme court acting as a supreme judicial body.

Regulating act also depicted the status of the central government under the control of parliament for all its acts, and all central government decisions will be taken by the majority. The act prevents the governor-general from taking any arbitrary decision itself by providing everyone with a chance in the decision-making process.


Who was the first governor-general of Bengal?

Warren hasting was the first governor-general of Bengal appointed in the year 1773.

When did the dual system of government was abolished?

The dual system of government got abolished in 1772.

Which act brought significant amendments in the regulating act to resolve the jurisdictional issue b/w the supreme court and governor-general?

The settlement act, 1781

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


What are the terms Nizamat rights and Diwani rights?

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

Constitutional law