Regulating Act of 1773 History, Provision, Reason for Passing & Drawbacks

Regulating Act 1773

The British Parliament passed the Regulating Act 1773 to regulate the East India Company’s holdings, primarily Bengal. In 1772, the East India Company, which was experiencing a dire financial crisis, applied for a loan from the British government. Adam Smith’s free trade ideas were gradually influencing the British, who hated the Company’s monopolistic monopoly over commerce with India. Therefore, the Parliament decided that it was necessary to pass the Regulating Act 1773 when the Company’s finances were stretched as a result of Wellesley’s battles. The most impacted areas were those in the British-controlled territories. The Regulating Act of 1773 lays out the foundations of the Central Government of India.

The British Parliament and Governor General Warren Hastings created the Regulating Act 1773. The Act’s principal goal was to take control of the east India Company’s lands. It was the first consensus establishing the Company’s authority.

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Regulating Act 1773 Reasons

Bankruptcy results from a negative financial crisis. The Regulating Act of 1773 was passed by the British government; you can see the justifications mentioned here.

The company’s officials were accused of fostering a culture of corruption and nepotism. Robert Clive established a Dual method of administration that received a lot of flak. According to the Dual form, the Nawabs had Nizamat rights while the Company held Diwani rights. Each was given to the Company.

The company’s primary goal was to boost revenue, which resulted in an increase in the misery of farmers and ordinary people.

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Regulating Act 1773 Provisions

The Act limited the Board of Directors’ mandates to four years and the limited partnership’s earnings to six percent until it paid back a debt of £1.5 million. The first step in regulating and overseeing the corporation’s operations in India was taken by the British government. It made it unlawful for firm employees to conduct any form of personal business or accept gifts or bribes from “natives.”

The Act elevated Bengal’s Administrator, Warren Hastings, to the position of Governor of Bengal and gave Bengal control over Madras and Mumbai. It laid the foundation for India’s centralized administration. The Governor of Bengal has been elevated to the position of Lieutenant Governor of Bengal with the assistance of a four-person executive council. Simple majority voting will be used to make decisions, with the Governor General casting the lone vote in a tie.

The first Chief Judge of the newly constituted Calcutta Supreme Court is Sir Elijah Impey. The court is endowed with both civil and judicial authority. There is also original and appellate jurisdiction available. The corporation has been granted permission to maintain its control over Indian Territory. Given that the firm is not given complete power, it is referred to as a regulatory act. In conclusion, we can claim that this represented the first step toward governmental control over the enterprise.

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Regulating Act 1773 Drawbacks

Note the negative effects of the Regulating Act of 1773 that have been demonstrated here. To adequately study for the IAS exam, candidates must possess a thorough understanding of all the conditions set down in the 1773 Regulating Act. An Amendment Act was passed in 1781 in order to fix the problems with the Regulating Act of 1773. It provided evidence of the connection between the Supreme Court and the Governor General. The “Declaratory Act of 1771” was another name for it.

The Indian populace was paying taxes, but the Regulating Act of 1773 did not address their worries about how to prevent government corruption in the companies. The authority of the Supreme Court was not clearly established. Parliamentary control proved ineffectual because there was no system in place to examine the reports that the Governor-General in Council sent. The Governor-General lacked veto authority.

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Regulating Act of 1773 UPSC

The regions governed by the British were included in the Regulating Act. The British invasion of India officially began with the passage of this Act. Examine the key components of this Act.

• The East India Company was experiencing a severe financial crisis, and claims of corruption and nepotism against company employees were commonplace. The staff was thriving while the Company was on the verge of bankruptcy.
• The EIC obtained the Diwani Rights of Bengal, Bihar, and Orissa after the Battle of Buxar 1764, and over time, it began meddling in Indian affairs.
• The Regulating Act 1773 marked the beginning of British government efforts to oversee and manage the business of the East India Company in India.
• The Regulating Act of 1773 established India’s central government and recognised the Company’s political and executive responsibilities. Bengal had a horrible famine and widespread anarchy.
• The Governor of Bengal was given the title of “Governor-General of Bengal” and appointed a four-person Executive Council to work under him.
• As a result, the governor of Bengal gained authority over the governors of Bombay and the Madras Presidency.
• A Supreme Court with a chief justice and three other judges was created at Calcutta by the statute in 1774. The initial Chief Justice was Sir Elijah Impey.
• The British Government tightened its grip on the EIC by requiring the Court of Directors to report to them any information regarding Indian civil, military, and revenue problems.
• Additionally, the Regulating Act of 1773 forbade EIC employees from engaging in any private business or receiving gifts or bribes from Indians.

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Regulating Act of 1773 FAQs

Q) What were the main features of Regulating Act of 1773?

Ans. 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.

Q) Who introduced Regulating Act 1773?

Ans. On April 27, 1773, the British Parliament passes the Tea Act, a bill designed to save the faltering East India Company from bankruptcy by greatly lowering the tea tax it paid to the British government and, thus, granting it a de facto monopoly on the American tea trade.

Q) What was the act of parliament 1773?

Ans. Regulating Act, (1773), legislation passed by the British Parliament for the regulation of the British East India Company’s Indian territories, mainly in Bengal.

Q) What were the main aims of regulating?

Ans. On April 27, 1773, the British Parliament passes the Tea Act, a bill designed to save the faltering East India Company from bankruptcy by greatly lowering the tea tax it paid to the British government and, thus, granting it a de facto monopoly on the American tea trade.

Q) Who invented Regulating Act?

Ans. To eliminate the flaws in the corporate governing body was one of the two principal goals of the regulating act. It aims to address the reasons behind the company’s poor governance in India.

Q) What was the aim of the Regulating Act of 1773?

Ans. The East India Company Act 1772, also known as the Regulating Act of 1773, was an Act of the British Parliament designed to reorganize the East India Company’s administration of its rule in India. It represented the start of India’s move toward centralized government and parliamentary oversight of the Company.

Q) What were the restrictions imposed in Regulating Act?

Ans. The “Parliament of Great Britain” limited the Court of Directors’ mandates to four years and the business dividends to just 6% via the “regulating Act of 1773.” It forbade the company’s workers from engaging in personal trade or accepting gifts or bribes of any kind from the local populace.

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