Vol. 6 · pages 26–30

11ADMINISTRATION AND FINANCE OF THE EAST INDIA COMPANY The appointment of the Governor-General was made by the Court of Directors subject to the approval of the Crown. The Governor-General was aided by a Council known as the Supreme Council, originally composed of four members, three of whom necessarily had to be the servants of the Company in India of at least ten years’ standing. The fourth one must not have belonged to the Company’s Service. The Commander-in-Chief of forces in India was an ex-officio member of the Governor-General’s office. This Supreme Council of five members was expanded by adding to it in 1853, six Legislative members who were authorized only to sit and vote on the framing of Laws and Regulations. Four of these six Legislative members were required to be the Civil Servants of the Company of ten years’ standing in Bombay, Madras, Bengal and the North-Western Provinces. The two remaining places were filled up by the Chief Justice and one other Judge of the Supreme Court of Calcutta. The Governor-General was authorized to add two more members to this Council of eleven, under Section 22 of Statute 16 and 17 Victoria Chapter 95, but the power was not exercised at best up to the time of the mutiny. This Supreme Council of India, therefore, was composed of six members including the Governor-General and the Commander-in-Chief for the purposes of Executive Government and twelve members for the purposes of the Legislatures : seven members were deemed sufficient to form a quorum. The power of the Governor-General was so great that he was nearly an autocrat. He could not only veto all legislation in the Council but could initiate and carry out measures independently of the Council. All “political” appointments including those of the Residents to the native States and the Commissioners to the non-regulated provinces were made by him. He could appoint the Lieutenant-Governor of Bengal and of the North-West Provinces and the judges of the lower courts and controlled military patronage in Bengal and the North-West provinces.

12 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES All districts not included within the limits of any of the four Subordinate Governments were under the direct jurisdiction of the Governor-General in Council who also exercised such power over the native states as accrued to him through treaty obligation. The official staff of the Governor-General was divided into four departments, each one represented by a Secretary. These were : (1) The Foreign Department (foreign in relation to the native states). (2) The Home Department, handling the judicial and revenue correspondence. (3) The Financial Department. (4) The Military Department. Besides these the Political and Finance Secretaries had their respective Secret Departments which were entrusted with secret despatches. The Subordinate Governments of Madras and Bombay were administered thus : Each had its respective Governors and Councils consisting of three members (including the Commander-in Chief ). Both the Governors and the Councillors were appointed by the Court of directors. Bengal and the North-west Provinces were each governed by the LieutenantGovernors who were appointed by the Governor-General. The Subordinate Governments were denied the power of legislation or creating any new office, nor could they “grant any salary, gratuity, or allowance without the previous sanction of the Governor-General of India in Council.” This extreme strictness though required by law was not required by custom : in order not to overburden the Governor-General, minor matters were executed by the Governor who submitted a quarterly report of the same to the higher authorities who reviewed it and as a matter of fact sanctioned it. The Bombay and Madras Governments were privileged to hold direct correspondence with the Court of Directors and did send the abstracts of their proceedings to the Court and to the Government of India. The instruments of Indian Government were furnished by what was and is known as the Civil (covenanted and uncovenanted), the Military, the Naval and the Ecclesiastical Service. The collection of revenue and administration of justice were relegated to the Civil Service.

13ADMINISTRATION AND FINANCE OF THE EAST INDIA COMPANY For Civil and Military recruitment, the East India Company had maintained two colleges in England (1) the Haileburg College and (2) the Adiscombe Academy : Each student cost the Company about £ 96 a year during his period of training. All revenue was collected in the name of the Supreme Government of India and was transferred to and controlled by the Supreme Treasury. There was absolutely no local fiscal autonomy : the deficit in one province was made up by the surplus in another and the entire India revenue was held responsible for the debts borrowed for wars in one particular province : in short, both Finance and Administration were absolutely centralized as in France under the ancienne regime. So much for the pure system of Administration. The criticism of it we will postpone till we come to the next chapter. The last chapter must have made it clear how and why Western Europe was at a death grapple for the control of India. We followed the armies of the different leaders of different nations— fighting for a country the people of which had very little to choose in the final destiny—the Cama, the Albuquerques, the Busseys, the Lallys, the Clives, the Malcolms, the lakes and the shores as though enacting the train of ghosts of Banquo’s line all that terrified Shakespeare’s Macbeth out of his senses. II In this chapter we have more particularly to deal with the East India Company as a Political Sovereign and the Finances without dilating upon its development from a Commercial Concern into a Political Sovereign. There is nothing strange in the fact that the East India Company succeeded in establishing its suzerainty over India as might have been seen from our past discussion. Having gotten a foothold in the various provinces it extended its rule over the entire peninsula and established by law what is known as the British Government in India : in other words, it established the State and carried on the political and commercial functions jointly. As a result of this combined activity the fiscal administration of the Company in India was an entangled phenomenon. The commercial and

14 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES revenue returns were merged together without any attempt at distinction. Any student of finance, therefore, has to pass over the entire period ending in 1814 when by an Act of Parliament the Company was compelled to keep separate accounts of Finance and Commerce. With this caution we will now turn to the heads of Revenue. (1) The Land Revenue In spite of the early industrialization in parts of India, the country as a whole maybe classed as an agricultural country and land, today as in former times, furnished the state with a major part of its revenue. The British Government rightly or wrongly established the principle of state landlordship versus the principle of private property and regulated its land revenue system in keeping with that policy. There are different systems of land revenue in India : It may be well to describe them in the words of Parliamentary Blue-Books. (I) The Zemindary Settlement of Cornwallis The most obvious feature of advantage in this system is the facility of collection, as it is a much more simple thing to obtain the revenue of a large district from a certain moderate number of Zemindars or contributors, than it is to perform the collection in details by the officers of the government themselves, and another advantage undoubtedly is the greater degree of certainty in the result of 1831 C. 3339. This system of land tenure arose thus : When the East India Company came into possession of the revenues of the Dewanee of Bengal, Behar and Orissa, they found the land revenue collected through the mediation of officers (subhedars) under the Mohamedan government, who had charge of districts sometimes of more, sometimes of less extent, with various titles, such as Zemindars and Talookdars, and who paid the revenue into the treasury in one sum, for which they were found managing considerable districts whose obligations consisted in paying a certain annual amount to the Government. Many of them held their districts or estates under this condition hereditarily. [2. cf.

15ADMINISTRATION AND FINANCE OF THE EAST INDIA COMPANY 1831 C. 3114, 3115, 3215.] On the East India Company becoming possessed of the Bengal territory, great abuses were found to prevail, and to be practised by the different sorts of people employed in the collection of the revenue. The detail of the business was so great, that it frightened Lord Cornwallis and the Government of the day, and they conceived that no better method for the protection of the Ryots or small cultivators, could be invented, than to create a species of landlords, from whom they expected much benefit to arise : the ground upon which they principally went was this, that those zemindars, having a permanent interest in the land assigned to them, would have an interest in the prosperity of the Ryots, in the same manner as a landlord in England feels an interest in the prosperity of his tenants. This was expected to produce two good effects, to create a landed aristocracy in the country, and above all to afford protection to the Ryots or small cultivators, from the kind of paternal feeling that was expected to pervade the zemindars. [1. cf. 1831 C. 3136.] With a view to the protection of the whole mass of agricultural population, and with the best motives, the zemindars in 1793, whether cultivators or officers in actual charge of districts, hereditary or by special appointment, were created landholders of the country by which a property in the soil was vested in them, in nearly as full a sense as it is to the holder of a fee-simple in England. The sum which a zemindar had been in the habit of paying was ascertained by the observation of a few prior years, the assessment or tax was fixed forever, and an engagement was made that this amount of land revenue should never be raised on him. Such is the nature of the settlement known by the name of “the Zemindary or Permanent Settlement”. [2. cf. 1831. C. 3115, 3116, 3136, 3215; 1832. R.C. p. 21.] II. Village Land Revenue System The institution of village community was and is mainly to be found in northern India. The proprietary right of land is vested in the entire community residing in the village. The administration of the village is handed over to a headman elected by the villagers and is subject to their removal. Under this system the lands are let out to men sometimes in the same village, sometimes in the