- First step taken by the British Government to control and regulate the affairs of the East India Company in India;
- it recognised, for the first time, the political and administrative functions of the Company; and
- It laid the foundation of centralisation, i.e. central administration in India.
- It designated the Governor of Bengal as the ‘Governor-General of Bengal’ and created an Executive Council of four members to assist him. The first such Governor-General was Lord Warren Hastings.
- It made the governors of Bombay and Madras presidencies subordinate to the governor general of Bengal, unlike earlier, when the three presidencies were independent of one another.
- It provided for the establishment of a Supreme Court at Calcutta (1774) comprising one chief justice and three other judges.
- It prohibited the servants of the Company from engaging in any private trade or accepting presents or bribes from the ‘natives’.
- It strengthened the control of the British Government over the Company by requiring the Court of Directors (governing body of the Company) to report on its revenue, civil, and military affairs in India.
From 1690, a governor represented the British East India Company in Bengal, which had been granted the right to establish a trading post by the Nawabs of Bengal. The break-up of the centralised Mughal empire by 1750, led to the creation of numerous semi-independent kingdoms (all provinces of the former Mughal empire). Nawab Siraj ud-Daulah was defeated by the British forces of Sir Robert Clive in the Battle of Plassey in 1757. Thereafter the Nawab of Bengal became a "puppet ruler" depending on military support from British East India company to secure their throne. Siraj-ud-Daulah was replaced by Mir Jaffer. He was personally led to the throne by Robert Clive, after triumph of the British in the battle.
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