The second instance of the British Parliament’s intervention in the company’s governance system in India was Pitt’s India Act 1784. The first introduced Regulating Act of 1773 had two steps: one was to amend the company’s central organization in England, and the second was related to Indian governance. However, neither step was properly followed.
An amending act was sent in 1781 to remedy the shortcomings of 1773, which is also called the ‘Act of Settlement’. An amending act of 1781 defined more precisely the jurisdiction of the Supreme Court but did not address the other anomalies. By the Pitt’s India Act 1784, there was an attempt to correct the anomalies in this act.
1784 Pitt’s India Act: Background
The Reform Act of 1773 did not eliminate constitutional anarchy or economic corruption in India. This situation reached its peak when the company appealed to the British Parliament for financial assistance. Along with this, the demand for reforming the company’s internal governance structure also became strong at that time.
Immediately, the opposition leaders in the British Parliament put forward one reform proposal after another. The famous British leader Charles James Fox presented a bill in 1783. The bill mentioned the establishment of a government institution in London for the proper conduct of governance in India. Although this proposal was presented in the House of Commons, it was rejected due to the opposition of the then King George III.
The following year, in 1784, Fox’s rival Pitt, become the Prime Minister and passed an act in Parliament on this matter. Basically, the 1773 Act had not been able to improve the governance system in India, and it was not possible to bring complete control over the company. Therefore, “Pitt’s India Act 1784” was introduced. This Act is also known as the “East India Company Act.” Through this, for the first time, the British government interfered in the company’s internal and India’s constitutional affairs.
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Pitt’s India Act 1784: Provisions
- The company’s commercial and political functions were separated.
- The ‘Court of Directors’ was given responsibility for commercial affairs, but a new committee called the ‘Board of Control’ was established. Its job was to oversee political affairs. As a result, it created a double government structure.
- It empowers the Board of Control to supervise and manage all activities of civil and military government or revenue of British possessions in India.
- Company territories were first called the “British possessions in India.”
- The British government has direct control over Indian administration and company’s affairs.
- Aggressive wars and treaties were strictly prohibited.
- The number of members in the Governor General’s council was reduced from 4 to 3 (including the commander-in-chief).
- Bombay and Madras presidencies were brought completely under the Governor General of Bengal.
- The Governor General could not exert authority over the council members here and could not ignore the council’s decisions.
Pitt’s India Act 1784: Limitations
- The Governor General was independent here and could run government work as he wished. So, he often tried to create conflict between the Court of Directors and Board of Control.
- Since he could not exert authority over the council, he himself often became ineffective.
- The governor’s right to use the military was curtailed.
- It is common to refer to the Pitt’s India Act of 1784 as the “Half-Loaf system,” as it created the Board of Control, whose members were elected from the British Cabinet and it acted as an intermediary between Parliament and company directors.
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The Amending Act of 1786
This amending act stated that in unusual circumstances, Governor General Cornwallis could exert authority even over his council. Later on, all Governor Generals were bound by this provision.
Cornwallis wanted to take up both the positions of Commander-in-Chief and Governor-General. Both this authority was granted under the new act. No changes were made to this system until 1858.
Conclusion
Finally, it is worth mentioning that the preamble to the 1784 Act declared that the expansion of empire in India was not the aim of the English. Moreover, it was not consistent with the policy and dignity of the English nation. Yet, the dominance of the English in this country was gradually increasing.
The law that Charles James Fox wanted would have required the British government to take direct control of the Company-acquired territories. Although there was talk of controlling the company’s misdeeds at that time, it was not possible to significantly impact the government’s interests while keeping an eye on establishing British rule. Therefore, this act remained in force until 1858 without several reforms – herein lies its importance.
