Dual System of Government

The Dual System of Government in Bengal was the brainchild of Lord Clive. At Murshidabad, there was a puppet Nawab sitting paying the company an annual allowance of Rs. 6 Lakh. The British Emperor Shah Aalam II came under the “protection” of the British and he would now stay at Allahabad. The company was giving to him Rs. 26 Lakh every year in lieu of the Diwani rights or the Fiscal administration. But this was not able to satisfy the ambitions of Lord Clive. He left nothing for the Bengal than just a shadow authority and the real government came into the hands of the East India Company. The territorial administration of the Northern Circars was to keep the French and British at bay.

• The Diwani (Fiscal) was carried out by the company so Company was Diwan.
• The Nizamat (territorial) jurisdiction was carried out by these decrepit Indians so they were Nizam.

So, this system of separate Diwan and Nizam is called Dual Administration. However, the real authority was East India Company in the Nizamat also.

• The biggest fall out of this system was that the Indian Merchants were reduced to beggars. On the one side, British kept enjoying the duty free trade; the Indian merchants were to pay around 40% of the revenue.
• The peasants were now under the British revenue collection. The British left no stone unturned to extract each penny. There was zero activity in the name of development so Peasants started turning beggars.
• The new confusing administrative machinery which was not properly set up created chaos .
• The Officials of the British East India Company such as Lord Clive became extremely rich due to the clandestine private trade.

This was the beginning of the Economic loot from India, which made England the wealthiest country in the world in the 19^th and 20^th century. The consequence of this steady drain upon the production of the country soon began to be felt.